It’s time to get personal. Nothing inspires like a real-life example. My husband, Chris, and I got married when we were 22 years old. I had finished college the year before and was working a full-time job that did not require my 4 year degree. Meanwhile, Chris was working a summer job and long hours on the weekends as he finished his last semester of college. At the time of our marriage, we had about $16,000 in school debt. I know that this number seems low, but we were also paying cash for his final semester to avoid further debt and our income was around $9-10/hour during this time. Most of our college funding was provided by family (bless you all!) and scholarships, but this number seemed astronomically high for us at that time.
The summer before we were married, our church offered Dave Ramsey’s Financial Peace University and my father paid the $75 fee and suggested (it was less of a suggestion, really) that we take the class. This was a FINANCIAL MIRACLE for us! After completing this class, we knew that we wanted to avoid debt like the plague and we were like-minded on how to attack it. If you don’t know Dave, it’s time for you to become acquainted (see link to the right). Disclaimer: occasionally his name may become a four letter word when you hear his voice inside your head telling you that it is not a good idea to stop for a latte again this week, but listening to your “Inner Dave” voice as my husband calls it, is absolutely worth it. Take a short break and go meet Dave. Then come back because we’re just getting started.
We paid off this debt in under a year and here’s how we did it:
- Work HARD. I had my full-time job working as a Medical Assistant in preparation for PA school as well as a side job working for a family-run Ebay store. I found my side job on Craigslist (there are legitimate jobs on Craigslist, but BE CAREFUL!) and I was paid per item listed. My typing skills prior to that were not bad thanks to my teenage years in the era of instant messaging, but being paid per listing encouraged me to really step it up. I listed like a fiend every time they gave me new items. Chris worked for a canoeing/tubing business on the river. He logged long weekend hours hauling canoes up on top of a school bus and driving patrons up the river while entertaining them with conversation and his over-all charm. Note: if you have a job where tips matter at all, you need to develop the life skill of being charming and delightful because real, relational conversation is recognized, appreciated, and rewarded. He came home after work filthy and exhausted.
- Put every extra dollar towards your debt after establishing a small emergency fund (refer to Dave). Every dollar that we received for wedding gifts went straight toward this debt. We received a generous gift from family, so all together, this knocked off about $5,000. Hear me when I say we would have much rather purchased other things with that money- new furnishings, new clothes, new car, and the list goes on.
- Live as cheaply as possible. We were absolute hermits. We lived in a basement apartment that was $350/month including electric and water. While the house was heated, the basement was quite chilly and I vividly remember one winter afternoon when Chris and I were sitting on our futon watching television while wearing hats and gloves with an electric blanket in our laps because we were too cheap to turn on the gas heat for which we were financially responsible. That’s the day we had to give in and start turning it on periodically because it was only December and we still had lots of winter coming our way. I suggest you cut out your gym membership (you can exercise at home or on the treadmill that you found at the dump- true story), cable, magazine/other subscriptions, manicures/beauty treatments, lawn service, and even haircuts. Cut anything that you can live without, do yourself, or replace with something less expensive. Our entertainment budget was almost non-existent at that time. We bought no new clothing or shoes unless they were necessary for work. There were many days where we spent no money at all. If your debt is going to take more than a short-ish season to pay, I suggest you budget a small, set amount of spending money to keep from feeling completely deprived, but otherwise, power on. You can do this.
- Tithe. This one seems so counter-intuitive and I completely understand that. I will admit that there were times when I was not a cheerful giver. However, you can never out-give God and I believe tithing is crucial. It’s a step of faith and it reminds you that you’re really just a steward of your money anyway.
- Keep your grocery budget under control. Our weekly budget was about $40. I couponed (couponing is most definitely a verb: more information on that coming soon) and shopped very carefully. We ate at home and packed lunches. I took our grocery budget so seriously that I cried when my sweet new husband burned our Steamfresh dinner on the stovetop while listening to me have a meltdown about something I can’t even remember now. In my mind, our budget was blown when we had to go to McDonald’s and get Dollar Menu items for dinner. This did nothing to assuage my current meltdown and I may have over-reacted to the situation, but that’s par for the course when you are newly married. Avoid the urge to eat out. Avoid overpriced, pre-packaged foods with very little nutritional value (chips, cookies, crackers). These items may be delicious and convenient, but they are not not cheap or necessary and your money will be better spent on proteins, grains, and produce. Build up a repertoire of inexpensive recipes and keep your staples on hand to avoid last-minute full price spending (more on this later as well). Incidentally, this is also an effective dieting plan although that was not our goal.
- Take advantage of all freebies. Whenever anyone invited us to anything free, our answer was “yes,” especially if it included food. We were total, unashamed moochers. Our parents may argue that we are still this way, but old habits die hard and they are our parents after all. We went to every pizza party, cookout, covered dish, movie night, game night, church activity, and family gathering because our entertainment budget was zilch and we have some pretty fun friends and family who, apparently, like to eat.
- Celebrate victories. When you are attacking debt with this kind of all-consuming effort, it is easy to get frustrated and burned out. Find ways to keep yourself motivated. Make a paper chain and rip a link off each time you save a certain amount of money. Hang that loan statement up on your wall and look at that stupid “interest accrued” column every now and then and use that hatred to fuel you onward. Draw a giant goal thermometer on a poster and color that red line up a little higher every time you make a payment. Make an inspiration board to remind yourself why you are doing this.
I cannot tell you how awesome it feels to make that final payment. You will be dancing in your kitchen. The relief feels like a literal weight being lifted. Suddenly, you realize your new freedom. Now that every single dollar is not being put towards debt, you have a whole world full of possibilities for your family. You can save for college, a house, a vacation, retirement, a newer vehicle, ANYTHING YOU WANT! That’s where I want you to be. Questions or comments? Feel free to leave a note below.