HOW WE PAID OFF OVER $100,000 IN DEBT
Last year, Tyler and I became debt-free. It was a long and difficult journey, but we did it! And it was definitely worth it. Together we had a combined total of $140,000 of student loan debt. We had plenty of discussions prior to getting married about the debt we were both bringing to the marriage and our plan for getting out of debt. We made the most progress between 2017 and 2019. During that time we paid off $92,283. Between 2012 and 2017, we paid off $47,717. We applied the same principles through the 7-year process, but there were a variety of things that really made a difference for us in the final 2-year stretch.
WE LIVED ON A BUDGET
For years we used excel to create our budget and we still do. We also keep track of everyday purchases with the Every Dollar app. Using and living on a budget allowed us to tell our money where to go. Because we knew where our money was going it was easy to make changes or make cuts in certain areas. Any money we had left went directly to paying off our loans. The more we could save the more we could pay off.
We created our budget using the 4 walls method. The 4 walls in your life are; shelter, food, transportation, and basic clothing. You need to be able to pay your rent/mortgage (this includes basic utilities,) you need to eat, you need to get to and from work, and you need basic clothing. Everything outside of these 4 walls is extra, and these extra things are luxuries.
When we created our first budget, right after getting married we definitely had more month at the end of the money. This was largely due to the fact that our student loan payments were more than our rent and at the time we were living in Burbank, CA… so rent was a lot.
Keep in mind that everyone’s budget will look different even when everyone is using the 4 walls method. Cost of living is different everywhere and based on region everyone’s salary will be different too. Focus on creating your budget around your 4 walls. Remember, everything else is extra and these extra things are a luxury. Once you have your 4 walls outlined on your budget, determine how much money you have leftover, this extra money can go to your loans.
WE LIVED WELL BELOW OUR MEANS
It took us years to get to this point, but it was a huge factor in helping us get out of debt. As you read above when we were first married we barely had any money, which is pretty common for married kids right of out college. But, about 4 years into being married we were making more money and we were able to live on less than 50% of our income, this meant that a majority of our income went to paying off our loans. This is what made such a difference for us between 2017 and 2019. Our debt pay off was a slow upward climb to start, but as we paid off more debt and as our salaries increased, we were really able to make greater strides.
Getting to a place where you can live below your means will look different for everyone, and I don’t want anyone thinking they have to get to the same place we did to make a difference for themselves. Remember it took us years to get to a place where we could live below our means and we were able to do that because we lived small and continued to create a budget around our 4 walls. We didn’t increase our lifestyle when we made more money, we saved that money instead.
WE SAID NO A LOT
We basically said no to anything that costs money, especially if it was kind of big or out of the ordinary. We said no to things like rock climbing, eating out a lot, going on day trips and things like that. This doesn’t mean we didn’t hang out with friends, it just means we found free stuff to do with friends. Something we did often was hiking, we hiked a lot. And we didn’t say no to all eating out invitations. We always went to invitations that were important.
I also want to point out that we didn’t say no to everything. When my brother got married in the Philippines, we made it a priority to go. And when my dad passed away, we made a trip to Portland. I do want to include that we were able to easily plan for these trips financially, because of how we were budgeting.
WE CUT EXPENSES
We were often called weird because of the choices we made to save money. I didn’t have a smartphone until 2017, at that point my business actually paid for it and Tyler didn’t have a smartphone until we were completely debt-free. We didn’t pay for any subscriptions, no Amazon Prime, no Hulu. We did have Netlfix for about 3 years, but we canceled that and still don’t’ have it now. We also lived very small. At one point we lived in a 325sqft tiny house and then upgraded to a one-bedroom apartment. We rarely ate out and had very small clothing budgets, which we got for our birthdays, haha! It was pretty extreme, but we had a plan.
*What NOT to do: There were plenty of times when we first started this process that we didn’t give our selves any fun money or personal money to spend. This lead to times where we would end up blowing money because we weren’t giving ourselves any wiggle room. Give yourself a little wiggle room and decide what’s important to you and what you want to prioritize. When we first allowed ourselves personal spending money we each got $25 a month. That’s not a lot, but it still allowed a little bit of spending money. It also meant that if we wanted we could save the $25 and save for something big.
WE USED THE SNOWBALL EFFECT
We followed the Ramsey Solution principles and used the snowball effect. This means that we paid off the smallest loan first and then worked our way up. This gave us momentum and helped us have a sense of achievement. We celebrated every loan we paid off and we felt like we were making progress with each win. We actually had a handful of different loans, all of different amounts. When we paid off one loan, we would take the money that we were paying to that loan and add it to the next one. By the time we got to our last loan, which was the largest, we were able to make significant headway because all the payments we were making to the smaller loans had all snowballed into one large sum that went to our final loan.
WE WORKED A LOT
As I mentioned above we made the most progress between 2017 and 2019. At this time Tyler and I were both working. Tyler’s job allowed him to work a lot of overtime and he was also working a second job. My jobs were always more sporadic then Tyler’s, but I had the most consistent work and made the most between 2017 and 2019.
RELATIONSHIP STUFF
TYLER WAS VERY PATIENT
When Tyler and I first got married, I understood his plan to get out of debt, but I wasn’t as passionate about it and I also didn’t have the same intensity as Tyler. It took me a few years to have the same passion as Tyler to get out of debt. Tyler was always patient with me as he waited for me to get on board with our plan and then he was understanding and patient, knowing that I was not going to move at the same pace or intensity has him. If Tyler could he would have had as many jobs as possible. I was not like that. I was always willing to work, but I understood the demand that Tyler’s jobs put on him, so it was important to me to have more time at home, to take care of our needs. Long story short, I didn’t work as much as Tyler, but that is what worked best for us.
HOW OUR LIVES CHANGED
What we are doing now and what we have planned in the next few months are a direct correlation of being debt-free. Right now we’re living in Vancouver and we would not have been able to make this move if we were still in debt. We also planned a trip to Maui this year, which we would have not been able to do if we were in debt. We said no to a lot for a long time so we could be free to create a different life for ourselves. While the big stuff has definitely changed, the little stuff is the same. We still live on a budget and we actually kept it the same, except now we have more fun money to spend. But we still stick to the same main principles, we live small, we live below our means, and we save. Getting out of debt meant we could continue to dream new dreams. Now we’re able to save money for things that are important to us, instead of having to give our money to someone else (being in debt is the worst, haha.) And I can’t finish this post without saying it was all because of Jesus. He provided the many different jobs we had, he gave us the disciple to stay with it, and he was with us when it was hard and we wanted to give up.
Oh man, these types of posts are so hard for me to write, but I hope our experience will encourage and inspire you to become debt-free! We read tons of different books during our debt-free journey, but if you are trying to get out of debt too, I recommend Total Money Makeover and Love Your Life, Not Theirs. Both of these books will give you a step by step plan to get out of debt and create a new relationship money. Let me know if you have any questions below! xo. Samantha
