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Paying off Debt-Our Story

Updated on August 6, 2013
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Our Story

Eight years ago and fresh out of school, my husband and I took advantage of our new income, which was a huge increase in what we were used to! We couldn’t wait to get our hands on bigger and better things! All that mattered to us was how much the monthly payment was going to be. Within two years we purchased two large gas hog vehicles, a boat and a piece of property. Most of these were used prices but still way more than we ever should have spent!!! We were living the dream….so we thought! At the end of the second year we found out we were expecting our first child. I have always known that I wanted to be home with our kiddos but we weren’t going to be able to swing it financially with all those “toys.” So, we sold my husband’s truck since he drove a company vehicle and it sat in the driveway for the majority of the time anyways. This freed up a ton of money and so our financial journey began.

My husband and I started off at opposite ends of the spectrum. He came from a family that sees something that they want and they buy it! I came from a family that lived pretty modestly. My parents spent more money on experiences for us than they did material objects. It has taken six years but we have met in the middle and live a pretty balanced financial life. We are now on the same page with our financial goals. Our main goal being to pay off our final debt- our mortgage!!!

After our oldest son was born, household manager became my new work-at-home job. I was and still am constantly researching ways to save & make extra money. Just like everything else, figure out your financial goals and break them down into acheiveable chunks. Like I said, it has taken us six years to get where we are at and I have set some new money-saving/money-making goals for the 2013 year to improve our finances. Here are helpful tips that we are using as guidelines in helping us pay off debt:

Build up your savings

Although this step isn't actually chipping away at your debt, it is very important to have a safety net in place. Many experts suggest tucking away $1000 for those unexpected costs, such as; car repairs, household repair, etc. In addition to the emergency fund, you should save at least 3-6 months of living expenses. This came in very handy at the beginning of the year when my husband was laid off for four months.

Look at all of your debts and determine which one you are going to tackle first

It is recommended to first pay off credit cards since they generally have the highest interest rate. After that, start with the loan with the highest interest rate. Save your mortgage for last since it can help you at tax time. For us the first thing we paid off was our boat. When we sold the boat, we were then able to pay off my car!

Budget

This is where my focus is going to be for 2013! I have always struggled with making and keeping a budget. In my mind we don't spend that much money and we don't necassarily need one. However, by breaking our spending into categories and setting limits, I'm sure we can squeeze more money from our income to put towards paying off our debt. What I have heard and read repeatedly, is that budgets are important because you tell your money exactly where to go!

Make Extra Income

Any extra income you make should be thrown at your debt in order to pay it off faster. Are there items around your house that you don't want or need anymore? Use Craigslist or Ebay to sell them for extra money. Do you have a unique hobby? Use your talents and ambitions to start a small business that you can work in the evenings or on the weekends.

Think About Short-term and Long-term Goals

Once we became serious about paying off our debt, we talked about our goals. We discussed:

- why it is important for us to be debt-free

- how we are going to accomplish this task

- when do we want to have the debt paid off

We try to discuss our finances and goals at least once a month. Goals keep you focused so you are not just spinning your wheels!

I started my journey to become financially free before the recession hit and before there was such a vast amount of information on the internet about paying off your debt. I didn’t follow any particular order of steps. I was the money manager so I experimented with different ways to make our money work best for us.

I share this with you in the hopes that if you haven’t already, you start taking the steps to get out of debt. While it takes a lot of hard work and dedication, it is worth the feeling of freedom from not being tied to so many payments!

How are you doing in your war on debt?

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    • stephanieb27 profile image
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      stephanieb27 4 years ago from United States

      Thanks so much, LongTimeMother! :)

    • LongTimeMother profile image

      LongTimeMother 4 years ago from Australia

      Great hub stephanieb27. I know that feeling of struggling to get out of debt. Happy to report it is achievable. You are certainly on the right track! :)

    • stephanieb27 profile image
      Author

      stephanieb27 4 years ago from United States

      ItsJustBusiness, I LOVE being weird too!!!! :)

    • ItsJustBusiness profile image

      Shelley (Williams) Edington 4 years ago

      As Uncle Dave says stephanie.."Debt is Normal, Be WEIRD!"

      I LOVE IT!

      The weirder the better ;-)

    • stephanieb27 profile image
      Author

      stephanieb27 4 years ago from United States

      Thanks for the reading suggestion, Radcliff! I agree about not getting caught in that rut again, it is freeing to not be tied to so many financial institutions! :)

    • Radcliff profile image

      Liz Davis 4 years ago from Hudson, FL

      I just started reading this Kindle book the other day called "How to Manage Your Money When You Don't Have Any". How could I resist with a title like that? Anyway, it's changed my way of thinking about a lot of things. The writer follows most of what Dave Ramsey teaches. I recently sold my car and got a cheaper one, put some money into savings and paid off those stinkin' credit cards. Not getting caught in that rut again! It feels great. Thanks for sharing your story.

    • stephanieb27 profile image
      Author

      stephanieb27 4 years ago from United States

      ItsJustBusiness, that's great to hear!!! I hope more people jump on the debt-free bandwagon! :)

    • ItsJustBusiness profile image

      Shelley (Williams) Edington 4 years ago

      Oooh yeah....love Uncle Dave! I am working towards paying off divorce debt and have a great fiance' who is on board with my financial decison to become debt free and steer clear of the credit sharks! We are both going through FPU and are attending Dave's Build A Legacy seminar in May, along with his EntreLeadership seminar...can't wait for it! Dave's pan has made me feel so in control. It is a great feeling to control my money and tell it where it will go instead of it controlling me. My teenagers aren't as hot on Dave's plan but we are working on it.

    • stephanieb27 profile image
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      stephanieb27 4 years ago from United States

      Kasman, I agree! I plan to keep budgeting even when we are 100% debt-free to make sure I know exactly where our money is going and is being spent wisely! :)

    • Kasman profile image

      Kas 4 years ago from Bartlett, Tennessee

      Can relate to your story. totally feel you on the budgeting part. Some people think that once you get free, stop budgeying. Nope! Still essential. Well written and voting up!

    • stephanieb27 profile image
      Author

      stephanieb27 4 years ago from United States

      Thank you, Mr-Veg! So far so good for me sticking to the budget (but we are just only 3 days into the new year :) )

    • mr-veg profile image

      mr-veg 4 years ago from Colorado United States

      Nice tips to get out of the debt cycle :) ... The budget part is one which is hard to abide by but if we keep giving it a shot, it might get in shape one day !

    • stephanieb27 profile image
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      stephanieb27 4 years ago from United States

      Audrey, thank you so much!!! :)

    • AudreyHowitt profile image

      Audrey Howitt 4 years ago from California

      Congrats!! Congrats!!! Hard work, but you are doing it!

    • stephanieb27 profile image
      Author

      stephanieb27 4 years ago from United States

      CrisSp, thank you for reading and the kind comments! I'm not good at budgeting either, hoping to stick to it this year!! :)

    • CrisSp profile image

      CrisSp 4 years ago from Sky Is The Limit Adventure

      Not everyone is good in budgeting and I'm one of them. That's why I'm sticking with my money mantra: "Buy what you need not what you want."

      Great read, good advice and I like the way you worded the budget matter: "budgets are important because you tell your money exactly where to go!"

      Way to go! Thanks for sharing your inspirational and motivational journey with us.

      Voted up, useful and passing along.

    • stephanieb27 profile image
      Author

      stephanieb27 4 years ago from United States

      Mylindaelliot, thank you!!! I'm hoping to offer more tips as we look for ways to save & make extra money as we work to pay off our final and largest debt! :)

    • mylindaelliott profile image

      mylindaelliott 4 years ago from Louisiana

      Wow, this is lots of good advice and tips I can use to become debt-free.

    • stephanieb27 profile image
      Author

      stephanieb27 4 years ago from United States

      Tipstoretireearly, thank you!! I'm definitely looking for more ways to save money! :)

      Mpropp, thank you!!! :)

    • mpropp profile image

      Melissa Propp 4 years ago from Minnesota

      It sounds like you are doing a fantastic job on your debt-free journey. Congrats! You have some great advice for getting your budget back in-line. Thumbs up!

    • tipstoretireearly profile image

      tipstoretireearly 4 years ago from New York

      Congratulations on your journey! And good for you for embracing the job of household manager. There are always opportunities to save more, especially with all the information available online. And saving money is usually more beneficial to a household's bottom line than making that same amount more. Vote up!

    • stephanieb27 profile image
      Author

      stephanieb27 4 years ago from United States

      Gypsy48, thank you! I agree that money saved is way more important, I wish we would have realized that when we had two full time incomes. :)

    • Gypsy48 profile image

      Gypsy48 4 years ago

      Great information especially for people just starting out. Having some money saved is way more important than wasting money on things you really don't need. Voted up.

    • stephanieb27 profile image
      Author

      stephanieb27 4 years ago from United States

      Billybuc, thank you!! I agree. I just want to shout it from the rooftops!! :)

    • billybuc profile image

      Bill Holland 4 years ago from Olympia, WA

      Excellent information and suggestions, Stephanie! I have the feeling there are a great many people out there who need this. We only have our mortgage and it feels great.