Today Miranda (of Miranda Writes) shares her journey of paying off debt with her husband — $80,000 in total, and what finally got them to slay the Debt Monster once and for all. I don’t think I’ve ever enjoyed myself so entirely while also reading a ton of great advice and insight on budgeting. So let’s get right to it! Here’s Miranda:
Tell us a little bit about your debt story.
Our story is an all-too-common one. My husband and I were young and uninformed about money. We were trying our best, but ultimately, we racked up $80,000 in consumer and student loan debt. Not all of that was on the books at once. We would take out a few loans, then pay them off sporadically, always going back into debt each time. We were stuck in a cycle that never felt good, but we had no real plan or emergency fund.
It all came to a head around 2011. We had previously paid off some of the debt, but there was still a BIG chunk left. It felt like a guillotine looming over our heads and I (more so than my husband) was sick of it. I had heard about Dave Ramsey and read The Total Money Makeover. At the time, I was a little, um… obsessed. I liked the simple, old school approach. It felt doable in a way that nothing else had before. I told my husband all about it and said I wanted to pay off every cent we owed in full. This is the part where my husband would tell you that I drank the Dave Kool-Aid (true). He eventually agreed to my plan, and we got to work. There were certainly mistakes along the way, and it took about 2 years from the time we got serious before we saw that glorious $0 balance.
$80k! Congrats, you guys! So what specific things were most important in making that possible?
From the beginning, we got really honest with ourselves about credit cards. We know that for some people they’re a great tool. They use them strategically, pay off their balances every month, and have the airline miles to prove it. We are not those people. There are many things we can resist in life: taking every puppy home at an adoption drive, buying Apple products the day they come out, a third slice of pizza (sometimes), but credit cards are not on that list for us. I salute anyone who can use them wisely, but in our case, being responsible adults meant saying goodbye.
We also knew cutting back on expenses was going to be part of the deal, so we got creative. Aside from reducing our monthly bills, we found ways to go without that didn’t feel like a massive sacrifice. Some of the small things we did to save money were actually kind of fun. I taught myself to cut our hair (no tears and everyone has all their fingers). We discovered how much we prefer buying some things secondhand, as well as keeping a smaller wardrobe. Many of these things are still a part of our financial game plan. We did, however, start going back to professional hairstylists. Shampoo chairs=heaven.
The real game-changer was that we lived on half our income. Our decision to pay off debt coincided with a big promotion for my husband, but we did not use that as an excuse to spend more. We treated that additional money like it didn’t exist for any purpose other than reducing our debt. This was probably the single hardest aspect for both of us. Seeing a certain dollar amount on a paycheck and still feeling super broke was not fun. This is where it’s a good idea to remind yourself that it’s all temporary. Cookies help, too.
You mentioned that some mistakes were made along the way. Do tell.
We didn’t think (or talk) about money until money was a problem. We never discussed what we expected our money to do for us. It was just this thing in our lives, and we had no real intentions for it. When emergencies came up, we scrambled. This made for some unpleasant, last-minute decisions.
We did not start off on the same page when it came to our attitudes about debt. I had been approaching our discussions about it with a lot of anxiety and a ‘we-need-to-fix-this-now’ type of mentality. My husband is very ‘go-with-the-flow’ and he never responded to that. When our conversations shifted from thinking about debt as a massive problem to thinking about what we could do if we weren’t tied down to payments (dream vacations, retiring with lots of zeros in the bank, and being able to give generously) things became less strained. We changed it from a negative goal to a positive one. It took a lot more than one discussion, but eventually we got on the same team.
Once we finally made a budget, we (I) got way too obsessive about cutting every ounce of fat and things were a little too strict. This was fine when we were paying off those smaller balances, but over the long haul it was a bad idea. It’s extremely difficult to sustain a ‘no extra purchases’ policy for months at a time, and it usually back fired. If we had it to do over again, we would have made a point to put more spending money in the budget. Will power is a limited resource, and I’d be lying if I said we aren’t fans of shopping and eating out. It would have been smarter to have left some breathing room and not felt guilty about it. It was a hard lesson to learn because we just wanted to get it over with, but budgets really do need a cheat day.
What budgeting tools (apps, spreadsheets, strategies, etc.) are you using?
I wish I had a cool answer to this question, but I don’t. We are SO boring when it comes to our budget. For bills we use a Google Doc and our calendar. The only money app we’ve consistently used is mobile banking. Every two weeks when money hits the bank, the bills get paid, savings are transferred, and what’s left over is how much we have to spend. When it’s gone, it’s gone. Being debit card users means that our bank account is almost always up-to-date in real time.
We’ve learned that an itemized budget for anything other than bills is torturous for us to keep up with long-term. It worked great when we were actively paying off debt, but now we’ve changed that approach. We also found we like having more than one savings account. The larger one is for major stuff like a job loss or health emergency (that we hope we never need), and the other is a place to funnel money for those non-recurring expenses.
It might not be the most sophisticated answer, but a good, old-fashioned conversation is really our best budgeting tool. We make it a point to carve out time for money chats. Because we work completely different schedules, we cannot always have a face-to-face conversation when something comes up, so preemptively making decisions is vital to keeping us on track. These money talks coincide with the new budget at the beginning of the month. Because a lot of our expenditures roll over, they’re usually brief. It’s just a quick check in, but it’s key for us.
Any final words?
Here’s the thing about paying off debt: it is so unremarkable and very, very boring. There are no Rocky-style money montages (complete with theme music and sweatbands). No one high-fives you for staying the heck away from Target when you really want new throw pillows. If you run a marathon, your friends and family come to cheer you on, and when you lose weight, people tell you how great you look. Paying off debt is a huge accomplishment, but it isn’t as public a celebration as something like graduating from college or landing a great new job. There is not a ‘Congrats on paying your crap off’ section at the Hallmark store. When you pay off big debts, it’s sort of a quiet moment. You’ve gotta high-five yourself. Make it as fun as you possibly can. Celebrate your own little moments of victory. Most of all, even when you screw up, you have to keep going because (major cheese alert) it really is worth it. We had spent our entire adult lives in consumer debt and the feeling of clicking that last ‘submit payment’ button felt more liberating than I can fully express. *Sniff. Sniff.
Thanks for sharing your story, Miranda! What can I say? We agree 100% with everything she said. I don’t think anyone has ever described so perfectly the paradox of paying down debt — such a huge, important accomplishment, yet accompanied with zero fanfare (or Hallmark cards, ugh). And we loved how Miranda emphasized communicating with her husband. Being on the same page financially with your spouse is top priority. It’s a few years late, but big congrats on paying off all that debt, Miranda!
If you have any thoughts or high-fives for Miranda, feel free to leave them in the comments below.