WE ARE DEBT FREE!!!!!

Matt and I are happy to shout from every rooftop that we are DEBT FREE!!!!!!  

This is our "We are so excited!!!!" face

No, we did not pay off our home (yet), but we did pay off $111,108.29 worth of student loans and car loans.  We also paid it all off in 4 years, 7 months, and 20 days! Oh and I feel that I should mention that we don't make a ton of money.  We are both teachers so our combined salary isn't equivalent to that of a doctor.  Basically what I'm saying is YOU CAN DO THIS TOO!

Our Story

Matt and I got married in July 2011.  We became pregnant very quickly (surprise!) and it forced us to face our looming debt.  We realized that we needed to make a change for our growing family.  We wanted to kick these student loans and car loans to the curb as soon as possible.  After reading The Total Money Makeover by Dave Ramsey, we were eager to start our debt free journey.  Our start date was January 1, 2012.  What better way to start a new year, right?

When I sat down to think about HOW we conquered this massive one hundred thousand (plus some) monster, I realized that it all came down to five main things:

1. We stopped trying to 'Keep up with the Joneses.' 

To be completely transparent, Matt and I did not give up restaurants completely.  We did not skip new clothes and we did go on a couple of trips.  Even though we did not sacrifice 100%, we stopped trying to keep up with everyone else's standard of living (it's all about moderation people!). We do not own the fanciest cars and we don't have a house full of beautiful decor (but I wish we did!).  We budgeted a modest amount for restaurants each month and cooked dinner 90% of the time.  The only trips we took were my beloved girls trips (once a year to local destinations or each others' homes), and 1 big family trip last summer.  If we wanted new clothes we waited for sales and budgeted a smaller amount.  One thing we were really good about was scheduling a date night once a month!  Overall we have learned that living with less is very fulfilling.  We don't feel crowded in our home and we don't miss all the extra stuff!

To track our progress (and help keep me motivated) I made a debt thermometer that I would color in as we paid off chunks of debt.

2. We budgeted every month.

Repeat after me: "Budgeting is fun.  I can do this."  In all seriousness I'm a total dork and actually like the thrill (yes, I said "thrill") of budgeting. #mathteacher  Basically what we did was list out our expenses each month (including minimum payments on bills).  Some of our expenses changed based on that month.  For example, if there were 4 weekends before the next time we got paid, I based my grocery budget off of 4 trips to the grocery store.  Sometimes there were 5 weekends until the next time we got paid so my grocery budget would be larger that month. (By the way, we both get paid once a month on the same day - LOVE THIS).  We also budgeted for birthday gifts, haircuts, gas, etc.  If we were driving to see the grandparents then our gas budget would increase by about $50.  After adding up all our expenses we would take anything leftover and put it towards the smallest debt.  When we first started we had so many monthly payments that there would sometimes only be $100 or $200 leftover.  Over time we paid off more debts and that monthly payment would get rolled in to the leftover amount and go to the next largest debt (this is called the snowball method).  Eventually we were left with one beast of a student loan and we were making anywhere between $1,000 to $2,500 monthly payments on that bad boy.  We learned that when you budget, you find extra money that was going out the door to places such as restaurants, clothes, Target (can I get an Amen?), and random places.  

A copy of our family budget

3. Envelope System

So the envelope system isn't for everyone, and it took us a few months (maybe 4?) to get completely comfortable with it, but it helped us be more mindful of our spending.  We basically have several envelopes where we keep cash to pay for expenses.  We have a grocery envelope, restaurant envelope, clothing envelope, Christmas envelope, and Repairs/Tires envelope.  Each month we budgeted what money goes into the envelope and when it's gone, it's gone.  Now we are not perfect and yes, there are times that we go over our budget and just use our debit card, but the purpose of the envelope system is to become more mindful of how you spend your money.  If Matt is running to pick up donuts on Saturday morning (our family tradition!) then he grabs some cash from the restaurants envelope.  No big deal.  We also save $50 each month for Christmas (and more when it gets closer) so that it doesn't break the bank when it's time to purchase all the gifts.  This way we have a minimum of $600 to spend on Christmas.  We put $100 each month into our Repairs/Tires fund so that when we have a car repair we have some money stashed away to take the edge off the price (it's an anxiety saver for someone like me!).

4. We changed our mindset.

I'm not going to lie.  The day we sat down and totaled up our debt to be a whopping $111,108.29 I wanted to puke.  And then faint.  And then puke again (but the second time might have been from the morning sickness).  I honestly thought that it was never going to happen.  It looked like Everest and we were standing at sea level.  What we learned over a very LONG 4 years & 7 months is that if we changed our mindset then we could slowly take over our lives again and not be ruled by Sallie Mae.  Here are some examples:

Fixed Mindset: This is not possible.  We will never be able to accomplish this goal.

Growth Mindset: We can change our situation with hard work and sacrifice.

Fixed Mindset:  Everyone else is going on summer vacations. I want to do it too.  Let's go even though we can't afford it.

Growth Mindset: Yes, other people are going on summer vacations. This time of sacrifice is just a season in our lives.  Our years of vacations are ahead of us and even better, we will pay for them in cash!

Fixed Mindset: I need (insert item/experience here) to be happy!

Growth Mindset:  My happiness does not stem from possessions or experiences.  

FREE trip to the lake for a family outing.

5. We did it together.

Matt and I were a team during this time.  We sat down each month and looked over the budget together.  We ran purchases past each other because communication is key.  We also wanted the same things for our family: to live a life where we can give generously and provide for our children and our children's children.  There were times when I wanted to give up and didn't care anymore.  Those happened to be the times that Matt was intense and on fire about paying off these debts.  The opposite is true as well.  I don't doubt that God had his hand in this situation and provided us with the right attitude at the perfect time.  

I was initially hesitant to publish this blog post (mostly out of insecurity) but then I remembered a night when I was sitting up in bed thinking "How on earth will we ever succeed in paying off so much money" and I started reading success stories.  I would read story after story.  I would soak up all of their words because they did it.  They beat the odds.  They took back control of their lives.  The stories fueled my fire and provided me with energy and a renewed sense of commitment.  I guess part of me hopes that my story is the same for someone else.  I hope that someone feels inspired to get started, stay on track, or finish the course.  

Our excitement for our future is summed up in the photo above!