Today’s interview is with Laura P., who, with her husband, paid down over $80k in debt in a little over a year! Did it take hard work? Yup. Sacrifice? You betcha. But they did what it took and continue to do it. Here’s their incredible story:
Tell us your story.
Long story short . . . I came out of college with money in the bank. I was one of those kids who received so many scholarships that I was paid to go to school. Yes, feel free to hate me now. Then I met my husband. He was fresh out of a divorce and loaded down with a U-Haul full of financial baggage. Together, we had a lot of fun getting ourselves into even more debt. By the time it was said and done, we had over $80K sitting in the negative column of our credit life. We decided it was time to buckle down and make some changes.
We have been debt free since 2011 with the exception of our mortgage. Now my husband counsels other people from our church and from his work on personal finances. It’s a calling for him; he doesn’t do it for money.
$80k in a little over a year?! Explain yourself. How did you make it happen?
Lots of Ramen and cold tootsies! We buckled down hard core. We were determined to get out of debt ASAP, so that’s what we did.
We both took new jobs with pay increases during this time, too. That helped. We sold the only vehicle we had a payment on, and my husband was gifted a company car. We downsized our phone plans. We cancelled our cable. We made the typical changes to get out of debt.
However, my favorite story from this era was when we didn’t turn the heat on in our apartment for as long as we could stand it one winter. We would come home from work, and it’d be 48° inside the apartment. And we would cuddle up under a blanket in gloves and hats. Between us was a space heater that was under the blanket to really warm us up. Occasionally, the heater would overheat and shut off. We would have to wait for it to cool down to turn it back on. At night, we would close our bedroom door and use the space heater to heat the room. In the mornings, we’d do the same thing in the bathroom. It was hilarious then. The most important thing we did was keep our sense of humor.
Also, we saw a financial analyst who was investing some money from previous 401(k)s for us. He put together a debt elimination plan. We took that and Dave Ramsey’s plan and made our own plan. It was just a snowball-effect plan, but we found what we thought was the fastest way to the finish line. We even named it with our initials and started having regular meetings to discuss our status on the debt elimination. We still have those meetings to discuss the state of the union of our household. We are determined to never finance anything again (with the exception of our house).
We’re sending all the best, most positive baby vibes your way for your next IVF cycle. What financial sacrifices (if any) have you had to make to pay for those cycles?
Thanks! I’ve been sprinkling myself with baby dust lately, so hopefully that will help.
I’m kind of in need of a new car. My 2001 Honda has over 270,000 miles on it! Plus we have an office and nursery upstairs that need to be finished. Those two items have been on the budget since we started our infertility journey in 2010. Each time we have a failed IVF cycle, they get pushed to a much later month. Also, we haven’t been able to save as much for retirement as we would like. We are maxing out our 401Ks, but we aren’t maxing out our Roths. That is something we really have on our wish lists! Saving for IVF has been the priority since we found out that was our new route.
What got you hooked on budgeting?
An obsession with having no debt. I’m serious. When we made the last debt payment, 7 tons of weight was lifted from our feeble, very cold (from the “winter without a heater”) shoulders. At that moment, we knew we would never finance anything again as long as we could help it.
What advice would you give to those who are struggling with debt or keeping a budget?
WORK AS A TEAM!!! I think this is one of the hardest lessons. You both need to find ways to agree on each thing. My husband is the gas and I am the brakes on spending. I have to find ways to let him have some fun with our money, and he has to respect my need to save more than spend at times. It’s a fine balance. We make adjustments to the budget regularly. We do it together, though. Our state of the union meetings really keep us in sync.
Also, be flexible. For example, we used to do our weekly spending budget from Sunday to Saturday. Then we realized we were getting to the weekend and not having enough left to have some fun. We changed it to budget Friday through Thursday, which works much better! Now if we have too much fun on the weekend, we don’t eat for the next 4 days. Kidding. We just find somewhere to cut back until the budget resets.
Getting out of debt is a sacrifice. My husband’s favorite line is, “It was a lot of fun getting into that debt. It’s not going to be as much fun getting out of it.” Obviously, he only uses this in our circumstance and with others that have shopped themselves into a frizzy. He doesn’t tell this to people who are in debt because of medical bills or lawyer fees or other *not fun* expenditures.
What budgeting tools (apps, spreadsheets, strategies, etc.) are you using?
We have our budget in an Excel spreadsheet. (Our friends even tease us about my love for spreadsheets and budgets.) I have budgeted every penny we will make from here until the end of 2016. We set weekly spending limits, which is just one of the bazillion line items on the budget. I update the budget every day at work to make sure I stay on top of things. I send my husband text updates on each of those work days about where we stand on weekly spending. Then I send him a more comprehensive update on Mondays via email. He loves my updates and will send me back occasional questions or comments, especially when we stay under budget on something. It’s our way of staying on the same page between our meetings.
Any final words?
I know that budgeting is hard. I also know that having a mound of debt is harder. Once you find a system that works for you, you’re going to be so happy you did it. If you try one system and it doesn’t work, try something else. There is a way to budget and get out of debt for everyone. You just need to be resilient enough to stick with it until you find it. Happy budgeting!!
Thank you for sharing your story, Laura! I love hearing couples emphasize teamwork and communication. If you’re married or in a committed relationship, the road to financial independence is a joint one. Laura told it like it is: getting out of debt takes sacrifice. But how much better off they are now that they’re on the other side of it.
If you have any thoughts or fist bumps for Laura, feel free to leave them in the comments below!