Financial Freedom: How we paid off $266,329.01 of debt in 33 months.

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Financial Freedom was never on my radar. We lived a great life in an 1100 square foot condo, had just purchased two brand new cars, and put lots of things on our credit cards as a newly married couple. This all changed one day when my husband came home from work.

Financial Freedom

Getting on a Budget

“I think we should become debt free”, were the words that my husband spoke that changed our lives. He had just finished reading “Total Money Makeover” by Dave Ramsey, after speaking with a friend about their debt-free journey.

At this time, our total debt was $266,329.01 (yes that penny counts too!). Our debt included a credit card bill ($1,871.31), the balance on two brand new cars (31,211.10), and the balance of our condo mortgage ($233,346.60)

The first thing my husband wanted to do was go on a budget. My misconception was that being on a budget is restricting, and boring!

After some deliberating, I decided to give budgeting a try. I quickly learned that budgeting, is actually liberating. Having a budget as your financial roadmap to your goals, allows you to choose what you spend your money on. You are giving yourself permission to spend.

The Monthly Budget Meeting

My husband is the President of our monthly budget, and I’m the Vice President. I really need that title on a placard in our office 😉 At the end of every month, my husband and I have a meeting where we give every dollar made that month, a job to do for the following month. For example, if we made $6,000 that month, we put every single dollar into a budget category, whether it’s mortgage, utilities, groceries, clothing, car repairs, etc. We have a very detailed list of categories that I will work on having as a resource on this blog.

We have used the YNAB app to budget for the past 8 years, we pay annually and love the different features it offers. Some people also enjoy using Mint.

Debt Free Aspirations: Increase Income, Decrease Expenditures

The next thing we did: everything possible to increase how much money we were making and to cut back our expenses. I got a second job as an emergency room nurse, and as Dave Ramsey would say “We started working like no one else.” We sold stuff (craigslist and garage sales), we went through every single utility bill and tried to figure out how we could decrease it (by calling other providers or figuring out how we could change as consumers), we said no to lots of purchases.

I became the “yes” girl at work. “Yes I will work 16 hour shifts multiple times a week, “yes” I won’t get my usual amount of sleep so I can come back and make that early morning overtime, “Yes” I will sacrifice my plans so that I can pick up that shift because it will get me that much closer to our goal! Thankfully my husband had the opportunity to work extra at his job as well.

Financial Freedom

Paving the Way for Financial Freedom: Refinance the Mortgage

One of the first things we did when starting our debt-free journey was refinance. The interest rates were in our favor, and we ended up saving both time and money. We went from a 30-year mortgage to a 20-year mortgage and saved thousands of dollars on interest from this transaction alone. If you are looking into refinancing, you can check rates here.

Celebrate Small Victories and Make Smart Decisions

Vincent Van Gogh said “Great things are done by a series of small things brought together.” He is spot on. Celebrate ALL of the small things. My husband and I had little budget milestones every time we turned a page in our mortgage amortization schedule, every time we paid off another 5k, and every time we saved another $5k of interest on our mortgage, so it seems like we were constantly celebrating something, and this gave us momentum to keep moving forward, together. My husband created a visual aid where we used to keep track of our debt milestones.

Two major things I changed to save money: Meal planning and having a double check system for big purchases. I started meal planning weekly, and I would hardly ever go to the grocery store when I was hungry, or when I didn’t have a list. There’s more room for wasting money if there isn’t a specific meal plan in place.

If my husband and I spend more than $50, we usually run it by each other first (or you can chat with your budget buddy), and sleep on it. After a few days, if I still want the item, I buy it if it’s in the budget (preferably if it’s on sale). I’ve been using Ebates, and enjoy getting cash back for purchases that I was going to make anyway.

I realized that I don’t need as much stuff, in general, and that, as cheesy as it is, the best things in life are free: catching up with friends, spending time with family, exercising outside… all these things don’t cost anything and they mean the most.

Work Hard, and Don’t Burn Yourself Out

It wasn’t easy to get out of debt. I wanted to quit many times along the way. We did give ourselves money to spend each month in our “recreation” funds, and we still went on a few vacations during this time. It’s really hard saying “no” to yourself, and it makes you totally reevaluate the things that matter.

By far the hardest thing about consistently sticking to our goal was comparison. It’s true what Theodore Roosevelt said, “Comparison is the thief of joy.” While we were working 80-hour work weeks, hardly dining out, and hardly going on vacations, it was hard to not look around at those around you who were enjoying the things we weren’t. When I was feeling down, my husband would remind me to keep my eye on the prize. It’s so hard when you are in it, but like Dave Ramsey says, “Live like no one else, so that later you can live like no one else.”

I walked away from this whole experience realizing that time is ultimately the most valuable asset that I have. Because we paid off all of that debt, we now the option to have me work once a week as a nurse compared with working full-time. We have the option to have Kyle pick up overtime shifts versus depending on the overtime shifts.

This process makes you discern that the most important things in life aren’t things. They are your time, your values, your financial freedom, and the people you love.

Financial Freedom

33 months after we started, we did it. We were totally debt free. We paid off $266,329.01 of debt. A year later, we purchased our fixer-upper dream home, and paid over half of the mortgage for the down payment. Three years after that, we completely renovated our home without ever going into debt. While we do now have a mortgage, it is reasonable, and we are otherwise debt-free. Never, in my wildest dreams, did I think that we could achieve such a huge goal. I share our story because we were inspired by somebody else’s story, and never would have done all of this had we not heard that story. If you are thinking of becoming debt-free, or going on a budget, I would encourage you to do it, and start now.

Financial Freedom

What You can do to Achieve Financial Freedom

  1. Be passionate about changing your financial trajectory. This is probably the single most important thing about becoming debt free. Without the willingness to work hard to change what’s currently not working, nothing will change. In nursing school, one of the biggest lessons we learned is that people will not change if you will them to, or if you try to coerce them; they will only change if THEY want to change. The same principle applies to becoming debt free. 
  2. Figure out your monthly income and expenses. You can start by writing down all of your different categories of expenditures: utilities, housing, groceries, cars, etc. Then you can start keeping track of how much you are spending in these categories every month. What’s most important is that the monthly expenses are less than your monthly income; if not, something has to immediately change. 
  3. Establish your emergency fund. This is important because the rainy day will come; it’s just a matter of whether or not you are prepared for it. Starting with $1,000 is a great start, and then you can work your way up to saving 3-6 months of your monthly income, as Ramsey suggests. 
  4. Make an actionable plan, start a budget, get a budget accountability partner. Your financial roadmap to becoming debt free is in your budget. Set goals, sell stuff, pick up an extra job, and decrease your monthly expenses. Make sure that your budget buddy holds you accountable to what you agreed on. Also, if it’s in your budget, I would highly encourage being generous with the budget that you have because it’s good for the soul — whether it’s baking someone cookies, paying for someone’s gas behind you, or giving to a non-profit organization or church that you love. Also, know that it takes 3-6 months to really get a handle on a budget. Don’t be deterred, give yourself grace and work through it.
  5. Celebrate the small victories, and pay off your debt! Whether you are keeping track of how much interest you are saving along the way, or turning another page on your amortization schedule, or paying down another $500 of debt, celebrate the small stuff because that will give you fuel to keep going to achieve financial freedom. 

Thanks for stopping by! You can do this!

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