Greetings, financially succeeding friends!! Today we’ve got yet another story from someone who’s achieved debt freedom. Our friend Rob, who blogs over at www.mustardseedmoney.com, shares his powerful story of how he became totally debt free. Enjoy!
How much debt did you start out with and what kind of debt was it?
I was fortunate that the only debt that I carried was from my mortgage. The mortgage debt was $400,000 on a 15-year loan. In order to afford the mortgage, I had to get three other roommates. Even then, it still took over half of my paycheck in order to pay the mortgage bill each month.
What was the “eureka” moment when you knew things had to change?
Initially, I was super excited to own a home. I was 23 and thought I knew everything. In hindsight, I was really fortunate to buy when I did. It was just before the housing market peaked. So even when the housing market cratered, the house was never underwater. I can’t say that was the case with everyone else in my neighborhood as some took bloodbaths.
After about a year, the new home smell wore off. Watching half my paycheck go out the door became a miserable feeling. It was then when I became obsessed with paying off my mortgage. Every bonus that I got and every extra dollar that I had laying around in my bank account started going right towards the mortgage.
I built excel amortization tables to see how adding the extra money towards the mortgage principle would impact the final mortgage due date. There was something so satisfying watching the date creep up each month when I applied new principle. I was running at this new goal with ultimate determination.
Recommended Reading: The Difference: How Anyone Can Prosper in Even The Toughest Times
How long did it take you to pay off the debt?
I moved into my house in June of 2004, and I paid off the mortgage in December of 2012. So it took about 7.5 years to pay off my 15-year mortgage loan.
What are the top five things you did to get the debt paid off and how did those five things help you to make permanent changes and stick with your plan?
I learned the power of delayed gratification. While my friends were spending lots of money on items and experiences on a regular basis, I learned to just say “No” if it wasn’t something that I truly valued. For instance, they loved to go camping in the winter. But that camping required a lot of snow gear including a heavy-duty sleeping bag and snowshoes. First, I don’t love camping that much, and second, buying gear that I’d probably only use a handful of times in my life seemed like a waste. So I learned that saying “No” to certain things was okay. Looking back, I really didn’t miss out on much. I just had different priorities at the time, and I don’t regret them.
I was consistent in that I always applied extra principle to my mortgage each month. While it wasn’t always enjoyable, I knew that paying off my mortgage would lead to more freedom down the road. Any bonus I’d receive or any other surprise cash would go directly into the mortgage. I figured since I wasn’t expecting that money, I probably wouldn’t miss using it for other things.
I always bought used cars. Admittedly, when my roommates were driving brand-new BMWs, Lexuses and Jeeps, I was a little embarrassed of my old Honda. Now that I’m out of debt, I have no desire to drive those types of cars. Amazing how your perspective changes over time.
I have only ever bought one new piece of furniture. All the rest of the furniture that I used to furnish the house came from Craigslist. This substantially cut down on my expenses and allowed me to apply the savings towards my mortgage. This habit has carried on today as my wife and I have used Craigslist almost exclusively to find baby-related items in addition to furniture.
How is life different now that you’re debt free compared to when you were drowning in debt, both from an emotional standpoint and a financial standpoint?
Life is completely different. I feel like a weight has been lifted from my shoulders, and I don’t worry about money at all anymore. I have automated all of my expenses, so I hardly ever check my finances since I have a cushion in my savings and checking accounts. Before I constantly checked my Personal Capital account, but now I log in maybe once every week or two.
On top of not worrying about money, I now take on projects at work that I think are interesting as opposed to trying to climb the corporate ladder to make more money. Funny enough, since I became mortgage-free, I have actually received two promotions at work. I attribute this to pursuing my passions at work and not focusing on the money as much.
What are some of the pivotal things you’ve been able to do now without debt that you could have never done while in debt?
Being debt-free has allowed me to travel the world with my wife and not feel guilty. Before I paid of my debt, I had no desire to travel the world. But, once I went with my wife to Europe, I got bit by the travel bug. It’s probably for the best that I didn’t get bit while paying off my mortgage. We’re hoping to go to Iceland in August.
What message or words of encouragement do you have for those still struggling with debt who are overwhelmed/in denial regarding their situation?
I always tell people to really think about how they want to live. If debt is wearing you down, you can do something to change that. Even the smallest of actions can have a lasting effect. I knew that I didn’t want to be shackled by debt any longer. So, I got on the track of paying off my debt as quick as possible. While it had its tough moments, my determination and diligence has paid off.
The first step is recognizing where you are and then determining where you want to be. Those are the two hardest steps, but once they are complete, the next part is the best part. This is where you get to build the financial bridge to get to your dreams. It may take some time, but if you stay diligent, you will get there.
My hope is that MSM’s story encouraged and motivated you to create your own path to debt freedom. If you have any questions at all, or if you have your own debt freedom story to share, feel free to contact us.