Our Debt Free Story!

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I remember the first budget Colin and I sat down to write,  I was still in college and we were engaged to be married that summer. He had been out for 2 years already but neither of us had a “real” job yet, and we were excited about how much money we were going to make {ha!} once we were, you know, college graduates and married and all. We wrote down how much money we thought we were going to bring in and what we were going to be able to afford…like cable TV, shopping money, a spacious apartment, a new car…the list went on. Oh and throw in a little credit card debt {more like a lot of credit card debt, try $28k spread out over 5 cards, yikes!} and student loans. We financed that new car, settled into a comfortable 2 bedroom apartment and spent every penny we made. Colin and I both had decent jobs, though his was a temporary position…but he’d find something when it ended. We had no plan, but I mean things just always work out, right? His job ended in November of 2008 and that was it. He couldn’t find another one. Remember, this was right as the “Great Recession” hit, so things were not looking so great. Our budget was maxed out and we slowly started accruing more credit card debt. In January of 2009 our church did a sermon series on Financial Peace…talk about perfect timing! They also started offering Dave Ramsey’s Financial Peace class. At the time we didn’t enroll in the class but we decided to buy his book, The Total Money Makeover. We read it in a day. It was exactly what we needed to hear. We had to figure out a plan and pay off our debt and never look back! We started to realize that there was no reason for us to be living so far outside of our means and we needed to be prepared for emergencies, because they WILL happen. We started working our way through Dave’s first 2 baby steps {Click here for all 7 Baby Steps}:

  1. Get a $1000 Emergency Fund
  2. Pay off all debt using the debt snowball

Our first step was to start selling absolutely EVERYTHING we could think of. Colin was unemployed so he ran a Craigslist business out of our apartment. People will buy anything, just post it and they will come. We sold the most random things, a coffee maker, college anatomy flashcards, designer jeans, rock climbing gear, camping gear, pretty much anything and everything. Our biggest ticket item was a sectional couch that we sold for $800. That was pretty awesome, it got us our $1000 emergency fund and enabled us to pay off our first credit card {a Best Buy card for a flat screen TV…sheesh}.

Then we took a look at our expenses to figure out where we could start saving money. We shut off the cable, researched cheaper internet plans, allotted amounts for all discretionary expenses {gas, groceries, entertainment, etc.}, we stopped eating out, I stopped buying expensive {or really, any} clothes, and we had to say “no” to a lot of things our friends invited us to do. Seems crazy to say this now, but we had NEVER done this, we pretty much just spent whatever we wanted. If we wanted to go out to eat, we did. If we wanted to see a movie we did, even if it meant we would be living paycheck to paycheck or put it on a credit card. The biggest decision we made was to break the lease at our apartment and move into a tiny 500 square foot apartment that would almost cut our rent in half. Our friends thought we were crazy, our parent’s were worried about us, but you know what? It was the best decision we ever made. I look back on that tiny apartment fondly. It was cozy and reminded us everyday that we were on a plan.

We also added in a couple things to our budget, we started faithfully tithing 10% of our income to our church, we sponsored a child in Uganda and even looked for opportunities where we could bless others with little amounts of money here and there. Our mindset was changing…drastically. We weren’t looking at the money we made as our own anymore. It was God’s. Everything is His, we are just the stewards of it. He can choose to give us a lot, or choose to take it all away and we should be prepared for that. We weren’t “in love” with our money anymore and we weren’t craving more for our own selfish desires.

“For the love of money is the root of all kinds of evil. And some people, craving money, have wandered from the true faith and pierced themselves with many sorrows” 1 Timothy 6:10

After figuring out our budget we just started throwing any and all extra money we could scrounge up towards our debt. We used the debt snowball method that Dave Ramsey recommends…listing all your debts from smallest to largest and attacking them! We didn’t have a lot of extra money at that time but anytime we got a little something extra it went towards the debt. We received a rather large tax return {due to a failed business of Colin’s which we also have to thank for a large part of the credit card debt}, I received a small settlement check from a car accident I had been in the year before, and I got an unexpected bonus at work. It was like now that we had gotten on a plan God was entrusting us with these extra amounts of money. Starting to see the progress in paying things off really kept us motivated. Colin got another seasonal job that summer. By the end of the year {2009} we had paid off all of our credit card debt! The math on that didn’t even make sense, we had paid off almost $30,000 in one year and we barely even made that. Crazy. Six months after that we had our $13,000 car loan paid off.

Then we were down to the bulk of our debt, two large student loans. It took us 3.5 LONG years to finally get these suckers paid off. The momentum and motivation we had from the success of our first year and half wore off at times, we went over our budget here and there, got caught up in the “keeping up with the Jones’s” of life and became completely frustrated at times. But we just kept plugging away.

In January of 2012 we found out we were pregnant! At this point we stopped paying extra on our debt and started stock piling money. We wanted to have enough money for any medical bills and baby stuff that we might need. Then right before Claire was born Colin’s car decided to die on us {we were surprised it had lasted that long}, we had saved up quite a bit of money and figured it would be OK to dip into the baby fund for it. So we paid $3800 cash for a used car. It’s amazing how something that at one time could have seemed like such a huge emergency was no big deal since we had our money in order. Obviously we had to adjust our budget to account for a baby and then we started plugging away at the loans again.

In the fall of 2013 we were really getting antsy to be done. So we looked at our budget again and declared a “crunch time.” We took Entertainment, Clothes, and Blow Money out of the budget for a short period of time. We even decided not to “do” Christmas this year {to the dismay of our families…but there will be plenty more Christmases to come}. Colin did some calculations and figured out that if we sold my car and bought a cheaper one we could blow out a big chunk of the loans and it would only leave us with a few months to go. So we did it. We bought a Jeep for $1700 and sold my Hyundai for $7000. We had played around with the idea of selling my car over the years, but it was so hard to part with until it got to the point where selling it would get us completely out of debt. And really, it’s just a car! I actually really like my cheap Jeep. I call it Goose, because it makes a honking goose noise when you lock and unlock the doors. Cheap cars have more character 😉

And now a few months after selling our car we made our debt payment for the month but still had $770 left to pay off. We were so close! We were thinking we’d have to wait until the next paycheck or possibly next month because of trips and things we have coming up…but our tax return for $814 showed up in our account Wednesday morning {we had totally forgot about it…who forgets that over $800 is coming your way??}, and BOOM we were done. You better believe there was some major happy dancing going on.

The debt is done, but it doesn’t end there. Paying off debt is only Step 2 of 7 of the Dave Ramsey Baby Steps. We’re still going to live on our current budget so we can save up a fully funded emergency fund (Step 3), then start saving up to buy a house, and we’ll just keep on working our way down the Baby Steps!

It’s a major lifestyle change to get out of debt and decide to live debt-free, and I think a lot of people aren’t willing to make the changes it takes. But I cannot emphasize enough how important it is. We’ve sacrificed for a small amount of time to set ourselves up to get ahead and leave a legacy for our family!

The numbers:

Starting Debt: $88,000
Actual amount paid toward debt {with interest}: $125,000
Time: 5 years
Average paid per month: $2080

Words for anyone thinking of starting…DO IT! And if you’re already in process, just keep going!

Ok, this is officially my longest post ever! I love talking about this stuff. I have many victims that have had to listen to my rants on saving money and strategizing how to get it all paid off {you all know who you are} 🙂 Feel free to comment or email me with questions!

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15 thoughts on “Our Debt Free Story!

  1. Kara

    Awesome! Good for you guys! We read Total Money Makeover as well and are plugging away at the baby steps. It feels so good to be debt free! Once you’re on mission, it’s amazing how much you can save in such a short amount of time!

    Reply
  2. MaryBeth

    I love this story!! We do pretty good with our budget, but also think we could up our gazelle intensity and be done quicker. We’ve made a big dent but the big stuff is still ahead. Thankful that the snowball method works!

    Reply
  3. Shannon nicks

    That is so exciting, I’m so proud of you guys. We really do have you to thank for giving us Dave Ramsey’s book which sparked an interest in the financial peace university class offered at our church. We are working our way through and hope to be debt free very soon as well. It’s so difficult to “live like no one now so you can live like no one later”. You guys are an inspiration and living proof that this system really works if you want it to.

    Reply
  4. Holly Nguyen

    Thank you so much for sharing this, Emily! Finances can be really personal and I’m so glad you and Collin openly shared about this! This is what I really needed and it’s really inspired me to take on this challenge! It is really a blessing to see this post!!

    Reply
    1. Emily Post author

      Thanks, Holly!! That was my hope in being open and honest about our finances, that we can help and inspire others! Good luck taking on this challenge, if we can do it so can you! 🙂

      Reply
  5. Erynn

    So nice that you shared this! I’ve been stressing about all the debt and feel pretty hopeless about it at times, but your post definitely gives me hope. Now to do something about it! 🙂

    Reply
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  7. Sylvia Groce

    Emily – congrats to you and Colin! That is amazing! Such determination! I love listening to Dave Ramsey! Way to go! Awesome!!!!!!!!!!!!!!!!!! Sylvia : )

    I know another couple who also did this plan and paid off $75,000 in 3 years! They just had their 1st baby and feel so relieved and are SO happy!

    Reply
  8. Natalie

    I finally got around to reading your longest post ever. I am so proud of you and Colin. If it wasn’t for you I probably would have never started tithing when I did. And entrusting God with “my money” was the best thing that ever happened to me. Thanks sis for being the words of wisdom I needed that day! Love you! Hooray for debt freedom!

    Reply
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