When Josh and I got married last summer we had a lot of debt hanging over our heads. I am excited to say that as of next week we will only have one debt left to pay off. Woohoo! We still have a way to go, but it is exciting to look back and see what we’ve accomplished. We have paid off approximately $18,000 in debt this past year! It is amazing, and I know that God has helped us a ton along the way. Since we have been doing so well with our debt, I thought I would share more of our story and some of the tools we have used to work towards financial freedom.
Initially we were not trying to pay off our debts. We were pretty much content to make minimum payments for as long as it took. The only debts we really worked at paying off at first were our credit cards. Josh was still paying for my wedding ring, so we made sure we took care of that with money from our wedding. So, we were credit card debt free, but we still had lots of loans we were paying. Again, neither one of us thought this was a problem…at first. Around the end of October/beginning of November my attitude started to change. I was starting to feel a little overwhelmed with all the expenses that come with being married and living on your own, not to mention those pesky loans we had to pay off. At that point we were using our credit cards and paying them off each month, but we had a car loan and 2 student loans that we were also paying. I didn’t really realize it at first, but we were barely getting by with the way were living. Not that we’re big spenders or splurged, but we just didn’t think about how much money we needed to live. As I began to feel overwhelmed by our financial situation, something happened through God’s divine intervention.
I was talking to Josh’s mom one day, and she mentioned how his sister had been working on paying off debt by taking a Dave Ramsey class at her church. I had no idea who that was, so she explained that he has written several books about getting out of debt and has a class on debt that is at many churches across the U.S. I didn’t really think much of the conversation until I was at work later that week. I walked into the teacher’s lounge, and there was a copy of Total Money Makeover by Dave Ramsey with a post-it note that said “Free.” I snatched it up and read it that week. It completely changed my life.
After reading the book I was hooked on Dave’s “Baby Steps” to getting out of debt. It took some convincing to get Josh on board, but now he is almost as intense about it as I am. The first step was saving $1,000 for a mini-emergency fund. We had this done right away and were on to step 2: the Debt Snowball. This means paying off your debts, smallest to biggest (not including a house payment). We stopped using the credit cards and switched to using debit. The only things that go on our credit cards are 2 auto-payments which total about $75- nothing else goes on credit. Then we started our snowball by working on my car loan. We got my car paid off about 3 months ahead of time. Then came the first student loan, which was about $10,000. We will be doing the final payment on that next week, and then we will only have one student loan left. In order to follow Dave’s steps and pay our debts off faster, we have worked hard to cut our spending. I started using coupons in January, and this has saved us a ton of money. I also plan all of our meals for the week, which helps us to save money on eating out.
That’s our story so far. If you have a lot of debt (or even a little) I really encourage you to check out Dave Ramsey’s website or Life as Mom’s Frugal Fridays. They will all give you great tips on saving money. If you have any other money-saving tips or a financial success story please share!