We’re Debt Free! 3


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If you’d told me four years ago that Steve and I would be 100% debt free today, I would’ve laughed in your face. Turns out, it’s true. Exactly four years ago today, Steve came across a Dave Ramsey (DR) podcast by complete chance—serendipitous, if I do say so myself—and it has completely changed our lives.

All credit goes to Steve for discovering DR and for believing in the possibly of getting out of debt. When Steve told me about the DR plan, I was on-board from the start. Had I not been or had he not been, we’d still be in heaps of debt today. It’s a good thing we’re a heck of a team! :)

We're Debt Free! | Dave Ramsey | Love.Bake.Read

We had no idea in the moment just how HARD getting out of debt was going to be. Let me say straight from the start that there are no gimmicks here. No get-out-of-debt-quick schemes. None of those shenanigans. Plain and simple, it was a lot of hard work, A LOT of sacrifice. A lot of belly-growling from a strict $40 a week grocery budget. A lot of staying at home reading books and watching movies…all free from the library.

We spent our money on nothing but rent, utilities, food, and other retail necessities. Nothing else. With the exception of a $1000 emergency fund that remained in our bank account (Baby Step 1), all of our “leftover” money went straight to our debt at the end of every month using the DR debt snowball (Baby Step 2). You can read more about DR’s Baby Steps here.

Our first payment toward our debt went out in the mail on May 15, 2011, and our LAST payment was paid on February 17, 2015. That’s 3 years and 9 months of super intense focus on one single goal and you know what? It was SO worth it.

When I say we’re completely debt free, I mean it. We sold one car, paid off the other, and then paid off all our of student loan debt. That’s right—almost ALL of our debt was from students loans. Isn’t that tragic? Gosh, how dumb we were to have gone into so.much.debt. When we signed for our student loans, we had zero clue what a straight burden they’d be once we graduated from undergraduate and graduate school. Hundreds of thousands of dollars in the hole. Ugh. Now don’t get the wrong message here, I’m all for going to college and getting an education, but I’m not at all in favor of going into debt to do it. I don’t have all the answers, but there has to be a better way.

I’m not so sure the reality of being out of debt has really sunk in yet for us. The DR plan has been a complete lifestyle change for us, not just a temporary solution. So, we still live like hermits—we’re definitely homebodies and were still on a budget. We don’t spend our money frivolously. We still do our meal plans, and we still track every last penny we spend. The only thing that’s changed is that we’ve been able to eat out—we’ve been to Panera, Chipotle, and to a Salvadorian restaurant (with some of the best hot cocoa!). This evening we’re going to try an Indian restaurant. Eating out happens only on Fridays and not even every Friday because that’s just too expensive. We also don’t spend any money without consulting one another. We’re a team through and through, so by no means do we intend to work against each other.

We're Debt Free! | Dave Ramsey | Love.Bake.Read

The lessons we’ve learned over the past four years are now just deeply ingrained in us. We work hard for our money, so we need to make our money work hard for us. Really, it’s just about respecting your money.

So what are our next steps you ask? Well, we’ve already saved 6 months of expenses (Baby Step 3). Next up, we will increase our retirement savings in both of our retirement accounts through work + open IRAs for the both of us (Baby Step 4). For now, we will skip Baby Step 5, which is to start a college fund for children, because we don’t yet have any children. After we increase our retirement savings, we’ll start to save money for a house, which we’re VERY excited about. We’re so tired of apartment living.

Are you still with me? Yay for you! :)

So a few lessons we’ve learned along the way:

  • Paying off debt is hard
  • Self-discipline is harder (Saying “no” even when you realllllly want to say “yes”.)
  • You have to sacrifice A LOT
  • Know your monthly income
  • Set a budget and stick to it (This is harder than it sounds.)
  • Track EVERY penny you spend. Yes, every penny! (We even tracked pennies we found!)
  • Don’t blow your money frivolously
  • We’re a lot less stressed
  • It’s okay to be weird (Our families & friends thought we were strange, for sure.)
  • We don’t ever want to eat another packet of oatmeal (It was our cheap dinner for years. Meh.)
  • It feels really, really good to be DEBT FREE

Finally, we get to watch our bank account increase and know it’s all OURS. That’s powerful, and I hope it’s encouraging to you. Look, we didn’t think we’d ever get out of debt simply because we were sooooo far in the hole that we couldn’t see even a twinkle of light at the end of the tunnel. But, we kept on and it paid off. We just kept building momentum and actually ended up paying off our debt a few months earlier than expected. Talk about being thrilled to the max. That’ll do it.

So what do I look forward to most now that we’re out of debt? Saving for a house is super important to us and hopefully we’ll get to focus on that very soon. I love food (obviously!), so I really look forward to continuing to try out new restaurants. Now combined food + travel and I’m good to go!

I’m curious to know: Are you living with heaps of debt? Are you working on paying off your debt? What’s your take on debt and how to handle it? I’d love to hear from you all. :) 

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