Today’s interview is great! It’s a perfect representation of real people paying down debt. Kate explains the changes they had to make in their life to make it happen, and we loved reading every word of it. We think you will, too, so we’ll let Kate take it from here!
Tell us your story.
When we started to focus on paying off our debt we had $11K in my student loans, $19K on my husband’s student loan, and a $17K auto loan for our sweet, brand new minivan (which we took out just months before we started paying off debt, oops). Our reality each month was looking bleak: receive the paychecks, and then use them to pay off the expenses for the month before. It really felt like we were stuck on repeat and couldn’t get anywhere. This was especially frustrating because we already had two kids (we started at 25). We felt we couldn’t properly provide for them by starting to save for their college or even affording life insurance. Needless to say, we knew something had to change, so we signed up for the Financial Peace University class through our church. So, like you, Dave Ramsey was the start to our financial freedom. It taught us to work together, and for the first time it gave us the vocabulary to talk about our finances and plan for the future. You should have seen our “money” talks before — yikes!
Shoot, $57k in two years is phenomenal! What can you attribute to being able to slash and slay the Debt Monster so quickly?
To get serious about paying off our debt we did a few practical things:
- We started a budget we’d both discussed. I know this seems like common sense, but it was THE big change for us. Now we are on the same page, and I feel a new freedom spending the money we have agreed upon.
- My husband made this tricked out Excel worksheet for us. We also use Mint.com to track our transactions and export them into our way-too-nerdy spreadsheet, which helps organize our spending. We could use Mint.com for the same thing, but it’s much easier to adjust the Excel once you get it going.
- We cut back. A lot. We don’t have cable, we buy our clothes at Once Upon a Child and Goodwill, and we rarely go out to eat. Our kids are only enrolled in preschool and the occasional gymnastics class at our local rec center, and our monthly entertainment budget was $0 while we paid down our debt. When my kids complain about eating peanut butter and jelly again, I just use cookie cutters to make fun shapes and eat their leftovers.
- We put anything extra we could find towards the debt. This included bonuses from work, the ENTIRE tax return, and I even tried to sell some things on Bookoo. Let’s just say I’m not a shrewd businesswoman because the one thing I did sell, the lady returned to me.
- I had a part-time job, which we used to make the van payment. We opened a separate checking account just for the income and expenses related to my part-time position. It was encouraging for me to see the time spent away from my girls was going towards something positive, and it also helped me curb my spending, knowing that our money could be put to better use.
You mentioned a bunch of hurdles and surprises during the process. How did you approach those hiccups and stay the course?
Bumps along the way? Yes! Especially at the beginning it seemed like we had a ton of big expenses come up. We needed a new dishwasher, a new dryer, new tires for our trusty old hatchback, and repairs for our air conditioning. We also spent about $1,000 to get the brakes fixed on our newly paid off car after we tried to do it ourselves (thanks Honey, you tried real hard). Oops! I’m so glad we didn’t listen to Dave about having only $1,000 in savings. If we had done this, we would have gone further into debt when all those unexpected expenses came up.
But the biggest bump was a baby bump named Amelia, our third baby girl born last September! She is such a blessing, but paying for three under four in daycare was no longer worth my part-time job. We had to adjust and were not sure how much extra we could put towards our debt. But then my husband was promoted and the increase made up for my loss in wages.
It was so discouraging when something didn’t go according to plan, but we never gave up our focus. We worked as a team and we continue to be motivated by our three little girls. We would do anything to provide the best future possible for them.
We love how this interview shows that paying down debt requires sacrifices and that it’s not easy. And yet, it’s totally worth it! And, of course, we love how Kate emphasized budgeting and working as a team with her husband. Big, big congrats on slaying the Debt Monster, Kate! If you have any thoughts or fist bumps for Kate, feel free to leave them in the comments below.