The best things in life are free.
“The rich rule over the poor, and the borrower is slave to the lender.” Proverbs 22:7
“I did then what I knew how to do. Now that I know better, I do better.” – Maya Angelo
“Live like no one else so that later you can live like no one else.” – Dave Ramsey
In order to “do what you love” and be successful, you must get rid of what’s holding you back whether it’s a job you hate, negative people in your life, or getting your finances in order. For us, it was primarily getting rid of our debt. Early on, before we learned about how to manage our finances, Kenny and I made a lot of financial mistakes which put us in a place where we had to fight to get any room to breathe. We are still in the process, but are hopeful that we will be debt-free in one year and free to do what we love.
(Note: full disclosure might make some people uncomfortable, but I think finances should be talked about! We all could learn from each other’s mistakes so that we are not put in a position where we feel stuck in a life we don’t want and unable to dig our way out.)
Our Debt
Beginning debt: $162,000
Beginning debt payments: $1,995/month
Debt we have paid off:
- $2,000 – John George student loan
- $900 – Overdraft credit card
- $900 – Dentist bill
- $7,500 – Bank of America credit card
- $3,100 – ACS student loan
- $10,800 – Nissan Altima lease
- $9,000 – Jeep Liberty loan
- $10,000 – Sallie Mae student loan #1
- $7,000 – AES student loan
- $22,000 – Sallie Mae student loan #2
- Plus parts of our last 3 loans
So far, we have paid off: $114,350 (71% done!)
Debt we have left:
- $4,600 – Sallie Mae student loan #3 (began at $28,000)
- $18,000 – Direct student loan #1 (began at $22,000)
- $25,050 – Direct student loan #2 (began at $39,000)
Current Debt: $47,650 (29% to go)
Current payments: $793/month
*Last updated: April 3, 2013
How do we do it?
We budget hard, and we pay off as much as we can on one debt at a time (while paying the minimum payments on the others). We paid off credit cards first, then student loans, and we bought used cars with cash so we wouldn’t have any car payments. We recently just moved close enough to work so that we only would need one car, so we sold our other car – this significantly reduces expenses (gas, car insurance, repairs, maintenance, license renewal, etc.). We have been paying off our debt since January 2010, and we anticipate that it will be paid off by January 2014 if all goes as planned.
If you desperately want to get rid of your debt, I would highly recommend checking out these blogs: manvsdebt.com and zenhabits.net as well as reading The Total Money Makeover by Dave Ramsey or taking his Financial Peace class.
If we can do this through all of our moves (5!), job changes, while having only one income for a year, and while paying for Kenny’s prerequisite classes for a year when he went back to college as well as other ups and downs, you can, too! If it’s important to you, you can make the changes that need to be made. It’s extremely hard at first, but it gets easier and easier. If you have any specific questions, don’t hesitate to ask. I would love to help you get started!
What is holding you back from doing what you love and feeling financially independent?
Jamie,
First, let me say that this blog is a breath of fresh air and I’ll be a frequent visitor! Mostly, though I wanted to thank you and commend you for sharing all of this. I think, and have thought, you two are a model for us in terms of the discipline you’ve shown over the past two years.
Since this post inspired me I’ll share that Alecia and I have sort of quietly been on a similar journey over the last two years. I don’t have the specifics top of mind but we were weighed down with credit card debt, car repairs, my master’s program expenses, the high cost of living in Chicago and were living with the mistakes we made when we were a little younger and a lot more financially illiterate. I don’t remember when, but at some point it became clear to us that making a plan and taking control of our own financial situation was a must. We, like you, created a budget (Alecia updates it constantly), made new lifestyle choices and began to make becoming debt free and financially independent a real priority in our lives. We have made gains over the past two years and even with my drop in salary after enrolling in (more!) school last fall we have made huge progress using some of the same techniques you’ve outlined. The two words that can sum it up in my opinion are discipline and determination.
The day you decide to tackle your debt and put your plan together is a monumental day but if you are realizing for the first time just how long you have to go it can also be incredibly deflating. I will admit that there were several times Alecia had to talk me down from the ‘we’re never going to pull this off’ pity party.
All that said we have made some significant strides this winter and we have recently realized that if everything goes right (God, I hope I’m not jinxing us here) we should be completely, 100% debt free by late spring of this year. This will free us up to save for a home, buy a new car (which we desperately need), to travel more, enjoy a nice dinner if we choose and live a life free of the worry of owing our hard-earned money to someone else.
Even though I’m not necessarily always much of a sharer I felt inspired by your honesty and wanted to let you know that you two are absolutely going to make it out of the woods. Thanks for the reminder of how important this is and please keep going with this site; it’s incredible!
Love,
Matt
Matt,
Thank you so much for such a nice comment! And thank you for sharing your own financial situation. I think, the more we share with each other, the more we will stay motivated, get through it, and get to a place we want to be! That’s so exciting that you and Alecia are almost done paying off your debt. Your comment about what you will do once you are 100% debt free made me realize something else I want to add to this page – I want to add “why” we are paying off our debt; We want to save for a house, a dog, and kids as well as have the freedom to work less in order to take care of them. Then, after that, we want the freedom to travel and save for retirement. It’s a step-by-step process and we’re about halfway done with Step 1, but we’re getting there! Thanks again for your thoughtful message – it means so much to me!
See you in February!
Jamie
Hi Jamie and “Bub”!
Linda just told me about your site and it is truly wonderful! Right after finishing my chemo for breast cancer…and refusing to take the drug “Arimidex”, Istarted studying “Everything natural, Everything peaceful and Everything healthy! It can certainly be an overwhelming experience but so very rewarding!! A company that I have found to be very helpful is Melaleuca. I am studying there products and have purchased…slowly (smile) all their products for cleaning! It is so rewarding to know that what I use in my home is not hurting me. The food can be a subject for later and the Peace…I have learned to watch carefully what I put into my mind as well as my body! God Bless both of you!!! I am going soooo enjoy following heallovebe!!
Love, Aunt Jan
Thanks so much! I’m so glad you like the info on this blog
And I agree with all you’ve said – consciously paying attention to what we put in our body, on our body, in our home, and in our mind is soo important for our health and wellness!
Your authenticity and commitment to learning is inspirational. Thank you for sharing your journey.
Thank you Thomas!
I’m curious to ask, and please forgive me if this is too personal, then you do not have to answer, but I wanted to know how all this had affected your credit scores?
There’s not much that’s too personal of a question for me, so no worries! My credit score has always been great since I’ve always paid my student loans and car lease on time, and I pay my credit card off monthly. When we first started dating, my husband’s credit score was not so good because he didn’t pay as much attention to paying everything off on time. Since we’ve been together, he’s gotten his credit score as high as mine, and we both have great credit scores now. (can’t remember the exact numbers but somewhere in the high 700s).
I’m glad to hear that, you both have worked so hard and sound like such nice people it would have been a shame to hear the financials had temporarily tarnished the credit. I think its also positive to hear for other readers out there who may be in a similar situation to know that not all hope is lost and there is a silver lining to the cloud. =)
Thank you! And I agree, that’s why I wrote this…I want to help others out there in a similar situation. Thanks for the nice comment. Jamie
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Great post, and the updates are so inspiring!
Thank you!!!
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Awesome job getting your debt down! Being debt-free is also very important to me as it frees us up emotionally and financially to focus on more important matters such as our health and spirituality. I’m a single mom and am currently helping my daughter to prepare for college this fall. We will sacrifice with a tight budget so we can pay it all in cash (& hopefully some scholarships) with no student loans. I want her to have the opportunity to graduate without the stress of student debt. We can do it! Keep up the great work!
That is awesome! We hope to do the same for our future kids someday
The best two financial decisions I ever made upon the repeated advice of financial counselors on CNN were:
1) Start a credit counseling program. At 27 my credit card debt was skyrocketing towards $20k. I had always considered myself frugal, but I was the primary bread winner in my relationship while my partner was in school, and at first we used my credit card to fill in the gaps, and then moved onto retail therapy when I grew depressed over my growing debt (see how the cycle begins?). During credit counseling your can’t use or apply for credit cards. It was torturous. We scraped by every month, shopping deals on store brand products and at Grocery Outlet. Some months I didn’t think we’d make it, but I persevered, fueled by the gratification of seeing my debt lessen and my credit score climb. slowly but surely. I can’t explain the peace of mind when you don’t have to dodge creditors. In 3 years I was DEBT FREE felt like I had a new lease on life! Now, to build my savings.
2) Direct-deposit money from your paycheck (start small and increase later) into a separate savings account you can’t easily touch. I had to get rid of my 17 year old junker and bought a new (for me) car that brought a $300/month payment. I set up automatic payments by direct-depositing $150 per bi-weekly paycheck into a savings account inked to my auto loan, through a small credit union on the other side of town that didn’t have any nearby ATMs. I held all my regular banking accounts at Chase. In three years my auto loan was paid off, but I kept the direct deposit in place and just let the money accrue without touching it, or even looking at it much. Set it and forget it! I wasn’t accustomed to having that extra $300 so I didn’t notice it missing, and increased it by $50/paycheck every time I got a raise. Today I am still debt free and have $20k saved in the bank! I have come full circle!
Congratulations on your hard work and dedication. To those in a bind it seems impossible, but it really does work! Mindfully saving today makes me more happy than the mindlessly shopping of yesterday did, and I’m here to share the good news.