Our One Year Debt-iversary!

Debt free for one year

What’s a debt-iversary celebration without a good back story? So let’s take a look, it’s in a book, and read how we got into and out of debt at Our Debt Story. Sorry about the quasi-Reading Rainbow reference.

One year has come and gone since Johnny and I said farewell to debt. ‘Twas not the night before Christmas, but ‘twas a cold winter’s night in December when Johnny and I submitted that final payment toward our debt snowball.

And here we sit, another year older and a little bit wiser. So what have we done with the money that was paying off our debt? How have our lives changed since becoming debt free?

Well, without debt, we’ve found some other ways to utilize that extra money:

  • We’ve saved up three months’ worth of expenses in an emergency fund. What was a minimal fund the year before, we’ve grown into a larger cushion.
  • We’re now putting a larger percentage of our incomes into savings.
  • When we found out we were expecting a baby, we actually felt ready for her — financially, at least. Still working on feeling mentally ready…
  • We paid cash for a two-year-old car. When it became a necessity to buy a car this August, we were able to pay for it without adding any extra financial strain to our lives. Not that it was easy-peasy saying goodbye to tens of thousands of dollars, but it wasn’t a burden on use either.

There’s also a lot we haven’t  done with that extra debt money:

  • We haven’t paid more for housing. In fact, with the baby on the way, we’ve lowered our rent by $200 this year in the hopes of offsetting some baby costs.
  • We haven’t gone on a celebratory vacation. And it’s not that we haven’t wanted to, believe you me. We’re hoping to save up for this in 2013.
  • We haven’t raised our budgeted expenses. The only reason we’re able to save more now that our debt is paid off is by keeping our lifestyle the same. That’s not to say extra expenses haven’t come up. But our spending is still just as calculated now as it was when we had monthly debt payments to answer to. And that means on the limited occasions that Johnny doesn’t bring a sack lunch to work, he’s eating whatever the monthly $5 Subway footlong happens to be.
  • We haven’t gone into more debt. But temptation has come a’knockin’ on multiple occasions. When it came time to buy a car, our savings account was looking mighty fat and happy. And suddenly erasing a big chunk of it to pay cash for a car seemed tough. A small down payment instead would have kept our savings nice and plump. But it also would have meant becoming reacquainted with the Debt Monster… so we resisted. And continue to resist.

And there are a few things we hope to do in our second year of debt-free living:

  • Saving up for a mortgage
  • Putting more toward retirement
  • Having a more extensive emergency fund

I know, BORE. We’ll do fun stuff, too. Maybe get our very own financial advisor! Still bore? Well, maybe we’ll take a real splurge on a very long vacation. But for the most part, life and our freaking budget will continue as usual. But whatever we do, it’s up to us, not the Debt Monster. And that’s what makes it worth it.

What about you? What financial freedom have you found from paying off debt? Or how will your life change once your debt is paid in full?

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  • Reply Michelle December 21, 2012 at 8:17 am

    Congrats on 1 year! We are really working on my student loans. Hopefully only 3 more months of those 🙂

    • Reply Johnny December 21, 2012 at 12:38 pm

      Thanks, Michelle!

      Cursed student loans. Keep cranking and we’ll be celebrating your debt-iversary in a few months!

  • Reply Savvy Scot December 21, 2012 at 8:44 am

    Massive congrats on the milestone! I am also going to be working on overpayments on mortgage in 2013! Good Luck

    • Reply Johnny December 21, 2012 at 12:40 pm

      Thanks, Sir Scot! And may you slay that mortgage well in 2013!

  • Reply Grayson @ Debt Roundup December 21, 2012 at 9:36 am

    Nice job on hitting the 1 year mark. I am only a couple months in, but I have already increased my savings along with my retirement. I am trying to fill up my savings to cover 6 months worth of expenses, but with the baby coming, that will be a little higher than before. I am also saving for a down payment on a home.

    • Reply Johnny December 21, 2012 at 12:45 pm

      Thanks, Grayson! It’s nice when you can finally start paying yourself for a change. And we’re definitely in the same boat as far as baby expenses and saving for a down payment. More mouths to feed = more desire to own a home with more sq. ft. = that’s going to cost HOW much?!

      Look forward to reading your journey down our similar path.

  • Reply Renee S December 21, 2012 at 9:57 am

    Congratulations! It looks like you have got it all under control. I love the plan that you have for the future 🙂

    • Reply Johnny December 21, 2012 at 12:58 pm

      Thanks, Renee!

      I’ve probably knocked on every wood object in our house for the moments I think we’ve got things under control. Because there’s always a curveball waiting around the corner. Hopefully now we’ll be better prepared for it, though.

  • Reply Rob December 21, 2012 at 10:09 am

    We became debt free years ago, as well as fully paid off our mortgage. We were fortunate in many ways – both of us continuously employed, our 2 kids went through university on scholarships (so no big student debts). Like yourselves, however, we both have always been savers. When first married and renting (before kids), we lived off my wife’s salary and saved mine towards eventually making a down payment on our first house. Later, after buying our house and starting our family, we then started to slowly pay down our mortgage (thru prepayments, whenever possible), along with putting a few $$$ towards our retirement funds (which held conservative investments). It was a long drawn out process over the years but we tracked it pretty closely so that we could always see the finish line in sight. Not rocket science, just hard dedicated discipline, all the while making sure to occasionally still treat ourselves and thus “still have a life” with balance. That last point is so important!

    • Reply Joanna December 21, 2012 at 1:15 pm

      Rob, I really hope Johnny and I can say years down the road that we lived as smartly as you have!

      And I love the idea of putting one salary toward a down payment. Getting a mortgage kind of intimidates me, but if we can have a big enough down payment, I think I’d feel much better!

      • Reply Rob December 21, 2012 at 5:51 pm

        Joanna, the reasons that we decided to put one salary toward a down payment while living off the other’s salary were 2-fold:
        1 – it was a way to significantly save as well as control our lifestyle expenses (ie., living within our limited means), but more importantly:
        2 – it was a way to cope, if in the unfortunate circumstance, that one of us should ever have the misfortune to become unemployed. Living on just one salary was our strategy. It’s not always feasible for everyone but we found that we could manage it while make some sacrifices.

        As far as getting a mortgage, well yes buying our first house was pretty intimidating but we decided to go for it before starting our family. And you know what – it was the best financial decision that we ever made !!! Our home equity increased dramatically over the years. So yes, we were lucky in how things turned out – no regrets. Good luck guys.

        • Reply Joanna December 21, 2012 at 8:12 pm

          Thanks! Those are some solid reasons. You’ve got great advice!

  • Reply DC @ Young Adult Money December 21, 2012 at 10:21 am

    I don’t anticipate our student debt to be paid off for more than a decade, so I try not to imagine what my life is that far down the road haha. My main goal for 2013 is to make $1k/month through “side” income to offset our student loans. Next goal is to offset the mortgage, and so forth.

    • Reply Joanna December 21, 2012 at 1:10 pm

      Those are awesome goals. We got married while in college, so Pell Grants ended up covering a good portion of what would have been even more school debt. But, either way, Johnny and I wouldn’t have given up our degrees for anything! That $1k/month is some impressive pay-down… you can do it!

      • Reply DC @ Young Adult Money December 22, 2012 at 11:49 am

        $1k month is the minimum we pay, so don’t be too impressed 😉 We pay off a little more on one with a slightly higher rate but most are so low that I’m not that concerned about paying them off.

  • Reply John S @ Frugal Rules December 21, 2012 at 11:26 am

    Congrats on being 1 year free! It’s a great feeling, isn’t it?

    • Reply Joanna December 21, 2012 at 1:04 pm

      Thanks, John!

      And, yes, it’s a great feeling. It’s tempting to go and celebrate by spending money on something, but I guess that’d kind of defeat the purpose, haha 😉

  • Reply Budget and the Beach December 21, 2012 at 11:31 am

    Congratulations! And congrats on the baby on the way…sounds like you are a lot more prepared now that last year. Such a cute couple!

    • Reply Joanna December 21, 2012 at 1:00 pm

      Thanks, Tonya! We are very excited. Even with being more financially ready, I’m still a bit of a (read: very, very) crazy pregnant lady… I can’t imagine if we’d had a baby this time last year!!

  • Reply jrm December 21, 2012 at 12:28 pm

    Congrats! Sounds like a solid plan while still being realistic.

    • Reply Joanna December 21, 2012 at 12:52 pm

      Thanks! Now if I could just convince Johnny that we should exchange gifts each debt-iversary! 😉

  • Reply Holly@ClubThrifty December 21, 2012 at 12:34 pm

    Sounds awesome! Congrats on the baby again. When are you due?

    • Reply Joanna December 21, 2012 at 12:51 pm

      Thanks! I’m due on January 5th. Or rather, “we’re” due! I got in trouble in our baby care class for saying “I.” Haha, ridiculous… I’m the one doing all the hard work! 😉

      • Reply Holly@ClubThrifty December 21, 2012 at 1:02 pm

        My birthday is Jan. 6th! Did I read somewhere that you’re having a girl? I take it this is your first child? We have two kids, both girls. I know what you mean about doing all the work. I’ve been there…and I am so glad to not have to go there again!

        But, it is sooooooo worth it. Get ready to fall in love and feel joy, pride, and happiness like you could never imagine. There is a lot of kid-hating in the personal finance blogosphere and I personally do not get it. You CAN have kids and still have an awesome, financially free, jampacked, exciting and awesome loving life.

        I’m so happy for you!

        • Reply Joanna December 21, 2012 at 1:19 pm

          Well, there’s a good chance our girl could share your birthday!! And thanks, Holly, for the positive reinforcement! Having a first baby is kind of a scary time because of all the unknowns. So hearing all the great aspects of parenthood is just what I need right now!!

        • Reply Holly@ClubThrifty December 21, 2012 at 1:51 pm

          Don’t worry. Nobody knows what they’re doing anyway, even if they seem like they do. We are all just making it up as we go along!

  • Reply Kyle | Rather-Be-Shopping.com December 21, 2012 at 2:47 pm

    Congrats, what a great accomplishment and I remember what a great feeling of freedom it is! Enjoy, have a great weekend.

    • Reply Joanna December 21, 2012 at 8:15 pm

      Thanks! At the time we were paying it off, it wasn’t very fun at times, but it was so worth it!

  • Reply Shannon-ReadyForZero December 21, 2012 at 5:36 pm

    Congratulations guys, being debt-free must be the most incredible feeling! It’s funny how people don’t often talk about the difficulty that comes after becoming debt-free – actually staying that way. I’m sure it’s harder than one would think. Great for you for not going back into debt or falling victim to lifestyle inflation. A great example for many others to see!

    • Reply Joanna December 21, 2012 at 8:21 pm

      Thanks, Shannon!

      Our goal is to only go into debt again when we get a mortgage… and even then, it will be a tough pill to swallow!

  • Reply Catherine December 21, 2012 at 7:43 pm

    Congrats guys! I cannot wait to be debt free, though it is MANY years away for us. I agree with Holly- girls are loads of fun. I have a 6month old and she is so fun! I know being a first time momma is scary, and you feel like you know nothing but here’s the thing, everything you thought your parents knew and were experts on- you will quickly learn was a total farce. They were TOTALLY winging it and you will too 🙂

    • Reply Joanna December 21, 2012 at 8:23 pm

      Thanks, Catherine!

      I’m super excited to have a baby girl! Although, in the last few days I’ve had two complete strangers look at my belly and say, “It’s a boy, isn’t it?” Haha, so maybe we’ll be surprised on delivery day! 😉

      • Reply Catherine December 21, 2012 at 8:50 pm

        You joke but that just happened to a friend of my 3 weeks ago. She was told she was having a girl- went out and bought everything girly after having a boy as her first- didn’t have the sex determined until 23 weeks…and found out it was a boy at delivery…it happens. I’d be crushed. As you know, when you know the sex you become so attached to her/him. Not that you’re not stoked that you just delivered a healthy baby but it’s almost like you lost a child too.

  • Reply K.K. @ Living Debt Free Rocks! December 21, 2012 at 7:57 pm

    Congrats on your 1st anniversary! Today actually marks my Debt Freedom Day so I’m celebrating right along with you 🙂 Here’s to many more years to come staying debt free!

    • Reply Joanna December 21, 2012 at 8:28 pm

      Woohoo!! Congrats to you! What exciting news.

      So, it might not feel any different yet, but I have a feeling you’re really gonna love 2013 without any debt to worry about! 🙂

  • Reply Cait December 21, 2012 at 8:05 pm

    What a great post, you two! Congrats on all of your hard work, especially when it comes to staying debt-free. I have $6,750 to go still, but already think about what life might be like without debt. What you’ve written here shows great examples of how to stick to a simple budget/lifestyle, in order to maintain your financial freedom. I do hope you save for a vacation this year, though. Even a weekend away would be nice, I’m sure. 🙂

    • Reply Joanna December 21, 2012 at 8:35 pm

      Thanks, Cait!

      You’re so close… you’ll be celebrating a debt-free life in just a few months! That’s awesome.

      I think it’s been harder to say no to debt now that we’re debt-free because we don’t have those monthly payments reminding us of how terrible it is. Here’s to another year of resisting!

  • Reply Ty December 22, 2012 at 2:24 am

    Awesome! New kid on the way without the stress of overwhelming debt in the middle of it all? Doubly awesome.

    As for myself, I have a car that I intend to pay off a little early in a few months, assuming nothing comes along to mess up my plans. Such as the car breaking down and needing expensive repairs. So either way the money’s likely going toward the darn thing.

    That will clear up $300 a month for my budget. I think that will be just the boost I need to fully attack my household’s other debts head on. I can totally see my family being free and clear within the next two years as long as I stay focused. Fortunately none of it is credit card or student loan related, just random things that shouldn’t have become (big) problems in the first place.

    No more monthly car payments! Woo! To think that a simple $300 could be potentially life changing in the long run. It helps that I’m learning from past mistakes in the process.

    • Reply Joanna December 22, 2012 at 1:18 pm

      That’s awesome, Ty!

      It was hard for us to stay focused at times because unexpected hiccups popped up along the way. It sounds like you’ve got a a great plan! Keep it up!

  • Reply Daisy @ Add Vodka December 22, 2012 at 11:35 am

    Congrats on getting out of debt once and for all! Boring usually means that you’re doing things right, financially anyway 🙂

    • Reply Joanna December 22, 2012 at 1:28 pm

      Thanks, Daisy!

      We never thought there’d be an area of our lives where we’d actually want to be boring, haha! But in the case of finances, boring = happiness!

  • Reply Carrie Smith December 22, 2012 at 3:18 pm

    Ahhh I’m so jealous! You guys are rocking the staying out of debt and celebrating your first full year. What an awesome accomplishment! I will be celebrating a full year of being out of debt on May 29, 2013 and I can’t wait – need to think of something special to do.

    I totally know what you mean about being tempted by the Debt Monster. When I first got out of debt, it was so hard to resist (I even wrote a post about my frustration with Life After Debt) but now it’s getting a little easier. I’m saving up money to pay cash for a new car in a few years when the one I have now gives out. I guess we will see how tempted I am then – but I have high hopes!

    Congrats you two! You guys are rock stars!

    • Reply Joanna December 22, 2012 at 9:18 pm

      Thanks, and kudos to you for being debt-free as well!

      That’s awesome you have a specific goal you are saving toward! I think that’s key in staying on track. I’m excited to see how you decide to celebrate your debt-iversary in May!

  • Reply Lisa @ Thriftability December 22, 2012 at 6:24 pm

    Thanks for sharing how far you’ve come – this is a great anniversary point for you two. Great blog – I keep sharing it whenever I can. 😉

    • Reply Joanna December 22, 2012 at 9:24 pm

      Thanks, Lisa!

      And thanks for your words of support! We hope you and yours have a happy holiday!

  • Reply Khaleef @ KNS Financial December 26, 2012 at 8:12 pm

    It sounds like you guys have made great strides. Not having debt is so freeing! We have a long way to go, but we can’t wait to get into the same position as you!

    Congratulations on having such a productive debt-free year!

    • Reply Joanna December 26, 2012 at 10:45 pm

      Thanks! Here’s to a new year and setting new financial goals!

  • Reply The Happy Homeowner January 4, 2013 at 3:14 pm

    Congrats! What an exciting anniversary 🙂 Keep up the great work!

    • Reply Joanna January 4, 2013 at 6:03 pm

      Thanks! We’re hoping we’ll have more success to share at the end of year two!

  • Reply Thirty somthing :) February 17, 2013 at 4:34 am

    Congrats on being and staying debt free! Kudos to you two for getting your act together so early in your marriage. My husband and I are just now wrapping our head around our money and we just hit our thirties *gulp.* I shudder at all the time we wasted. Congrats again and thanks for some the motivation.

    • Reply Johnny February 17, 2013 at 7:34 pm

      Thanks for your comment! Thirty-something-smirty-something, you guys are plenty young to knock that debt out of the park. Look forward to hearing your progress!

  • Reply Chasity March 19, 2013 at 12:20 pm

    Wow, your story sounds eerily similar to mine! I’m getting married in one month and my fiance is bringing $0 in debt to the marriage and I’m bringing $75,000 in student loan debt. Luckily I discovered Dave Ramsey a couple of years ago and have since paid off my $3,000 in credit card debt and the $13,000 I owed for the new car I had purchased just months before. I know Dave would have wanted me to just sell that new car and buy a used one as soon as I realized what a bad decision it was to buy new in the first place, but I couldn’t bring myself to do it! Instead I paid it off in two and a half years, which was two and a half years ahead of schedule! Now I’m going to drive it until it croaks.

    Once we’re married we’re going to be putting $2,500 a month towards the debt and are hoping to have it paid off in about two and a half years! I’m really hoping that my future hubby and I will gain some additional inspiration from your blog to pull our purse strings a little tighter, get even more serious with our freaking budget, and get it done sooner!

    Congrats on being debt free AND for not going crazy with all of the extra money you have each month!

    • Reply Joanna March 19, 2013 at 11:08 pm

      Thanks, Chasity!

      Your debt payoff plan sounds great! Based on your success with paying off your car, I think you and your fiancee will have a debt-free life in just a few short years. Awesomeness.

      We love us some Dave Ramsey… he really helped us get our financial priorities lined up!

  • Reply melissa@the bix blog July 1, 2013 at 12:31 pm

    im a new reader and impressed.com at your awesomeness! i felt the same way when i paid off my car last year and instead of a fun card popping up on my screen, i hit a cat on the way to work the next morning (true story). and when i paid off my first car- a week later i totaled it. but, i digress! who needs dave ramsey when i have you guys now? im going to be following and hoping it will make a difference in my freaking budget 🙂
    awesome blog!

    • Reply Johnny August 6, 2013 at 12:32 am

      Nooo!!! Awful luck on the cat and car. Hopefully your debt days are gone so that no more mishaps strike. At least it’s good motivation, right?

      Thanks for stopping by, Melissa!

  • Reply Chandra November 5, 2013 at 5:38 pm

    I just stumbled onto your blog after clicking on a story on Dailyfinance.com and I love it! We are DR fans too and trying to pay down a mountain of debt. We got married young 20 years ago and made all of the dumb money mistakes we could. We’ve been debt free twice, yet somehow found a way to invite the “Debt Monster” (perfect name BTW) back into our lives. He has a bedroom out back. LOL. No it’s my mother that has the bedroom. But I digress. Now, we are trying to dig ourselves out again after a major blow to our finances when my husband was transferred and we had to sell the house, at exactly the wrong time in 2008. We lost $20,000 and had to live on credit for a while. Who knew the market would crash just months later and then be laid off myself working in the mortgage industry at exactly the wrong time too? I wish we had learned how to manage money all those years ago, but we have taught our 18 year old son what we know now and he is living life debt free so far. Fingers crossed! Although he is eyeing the fast car for sale down the street, I hope he stays away from it!

    Your blog is awesome! Keep it up and share your story with as many people as you can. Living debt free is possible, debt is not the American Way. And sincere congratulations on your debt-iversary! You two have inspired me to keep fighting and strive for that glorious debt free day!

    • Reply Johnny November 8, 2013 at 5:07 am

      Thanks so much for your comment, Chandra! And thanks for sharing your own debt and debt-free experiences. We love doing this blog because we get to hear from so many other people who are or who have been in similar boats and it’s hard not to be constantly inspired to keep at smart money management.

      Congrats on passing down your learned wisdom to your son. That’s really the goal in life anyway, right? Making sure your kids end up better off than you did. That’s definitely our main motivation.

      Best of luck, and thanks again for stopping by and sharing your story!

  • Reply Melanie December 23, 2013 at 7:18 am

    Congratulations! That’s a big accomplishment. And you are so good on sticking to your goals.

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