Let’s Talk Money
This is my second “Hello, Adulthood” post where I talk about being an adult and doing adult things. Today I want to talk about money. Specifically debt (which is actually the opposite of money). Right? When Adam and I got married in 2009, we decided two things:
- We would stop using credit cards after we got back from our honeymoon
- We would pay off all our debt (using the snowball method)
The first decision (NO MORE CREDIT) was easy. If you literally cut up your credit card, you can’t use it. The second task, however, proved to be harder than it sounded. I’m excited to say that by the end of this year, Adam and I will be debt free. It will have taken over 3 years but this whole process has been totally and completely 100% worth it. I’m not going to go into super huge-number-type details but we started off with:
- 2 of Adam’s smaller student loans
- My VISA credit card (Not going to lie- I had built up quite the balance over 5 years and a wedding)
- Two car payments
- My large student loan
Believe me, we get lots of different reactions when we tell people our end goal. We get blank stares, speeches about why we need to stay in debt in order to buy a house (yeah, we’ve heard!), honest questions, and then a few that are actually interested in hearing how we are doing it. I promise this post is NOT my way of saying that our way is the only way. I’m just proud of how far we’ve come and to honestly say that I’m so stinking excited to not have a car payment anymore. So if you’re interested, below are my tips for those trying to do the same thing we are:
1. Figure out WHY you want to pay off debt. If you don’t have actually reasons to pay off debt, you won’t be motivated. Our reasons? We want a lot of cash flow, I want to own my own business without worrying about all our expensive monthly payments, and we truly want it to be a lifelong lifestyle.
2. Budget. Adam and I budget together two months out at a time. So when the beginning of January rolled around, we budgeted for January and February at the same time. It’s fun to see that your goals might be met in 4 weeks and it really motivates you. We also like to be prepared for any type of trips, events, or larger expenses ahead of time.
3. Set goals. We set goals for after we pay everything off. That’s another motivator. We want ‘X’ amount in our savings. We want to buy a house someday. We want to take a vacation after we’re debt-free.
4. Make big sacrifices. It will take a very, very long time if you only pay your minimum payments. You really have to make sacrifices. I work 60-70 hours a week. We haven’t taken a vacation (just the two of us) since our honeymoon. We aggressively paid off my Honda CR-V in 2010, sold it, and bought a really cheap Toyota. We went without cable/internet for two years. We have ridiculously cheap rent. We religiously shop at Marshall’s.
5. Know that you’re going to make mistakes/trip up THE WHOLE TIME. After all my “advice,” you need to know that it shouldn’t have taken us 3 years to pay all of this off. We slacked most of the time and made impulsive purchases (coughiPadcough). We overdrafted. We experienced annoying car problems. We moved way too many times resulting in extra fees and expenses.
At the end of the day, I feel good about being in control of my money. I like living within our means and I don’t stress like I once did. I wish that type of peace on anyone. If you’re interested in learning more, check out Dave Ramsey’s website (we follow his plan loosely) or feel free to ask me any questions or your own tips below! Sorry this post is so text heavy! I never do this. Tomorrow…pretty pictures. I promise.
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Comments (18)
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Thank you for your encouraging words, Marsha!! It’s always refreshing to have the support from others. And you’re right–we can’t wait to live like no one else. We feel very fortunate to have jobs and blessed with good health. November 2012 (or hopefully earlier!) can’t come soon enough :)
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I think that a lot of lifestyle and design bloggers shy away from these important topics. But I’ve met so many people who really have nowhere to start or no idea what others in similar situations are going through, and I think discussing these sorts of things is important. I’m so excited for you and Adam, and it’s definitely encouraging (especially since I’ve got a student loan looming over my head and accruing interest at the same rate as my payments!).
Can’t wait to see your pretty pictures tomorrow, though. :)
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I totally agree about the fact that a lot of bloggers stray away from real issues. I always want to communicate what’s really happening (good and bad) in my life…without spilling my soul haha. Thanks for the encouragement :) you’re the best.
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A few COOL things that aren’t mentioned here:
1. We’ve grown to fully enjoy the money that we budget to spend on vacations, eating out, shopping and whatnot. When you know that the little treats you buy yourself aren’t going to compromise what you’d like to do financially, you can TRULY enjoy them.
2. Because we’ve gotten ahead of our finances, we’re able to GIVE when people ask. For me, the most rewarding part of the whole thing is being able to send a friend a couple hundred bucks when they’re going on a mission trip or supporting a non-profit that we believe in. This is something that we weren’t able to do before because we never planned for it.
3. Keeps us from the “keeping-up-with-the-Jones” disease. Lots of my coworkers drive great cars & make other expenditures that I would be tempted to make. Then – once they’re a bit more honest – I learn how they’re still enslaved to debts on those cars and student loans and credit cards. How tight they’re finances actually are. I choose freedom over a BMW… for now…. :)
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Benji
Congrats you guys! That’s awesome. Also, I’d drive my paid off 2002 Chevy Prizm over a brand new BMW any day. I drove one and wasn’t that impressed.
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This is a great plan. Ya I have been struggling to get my debt paid off and finished school with about 40k. Then I worked for a non-profit and was left with 300 bucks in my pocket then was slammed with 1200 auto repair bill. This was the first time I felt I had no choice but to use a credit card and this was the first time I had never paid off the credit card balance within the month. So I have been jumping that debt through the hoops of about 3 different cards doing the balance transfer fee of 3% so I could get zero APR for 12 or 15 months. Debt isn’t a fun thing. My next goal is to get my mom released from co-signed loans of 9,000 and try to consolidate them. Right now I am saving up for my honeymoon which doesn’t leave much for paying all this down, but I’m working on it. Its a process. I was able to pick up some web freelancing for $150/hr so that should help.
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Brad- ugh I’m so sorry all of that has happened. It’s so frustrating when things like cars or health trip you up.
Good luck with it all — and good to hear from you :)
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Danielle E
The second I saw mention of fiscal responsibility on Twitter I thought, “Oh man, Dave Ramsey strikes again.” He’s so right.
I can’t tell you (and thankfully you’ve proved I’m not alone) how many times people have met my husband and I with hostility over not having credit cards. It’s amazing how enraged [and proud] people become of their debt.
We’ve just paid off the first of our school loans, and we’re stoked. There’s a lot left, but we’re hoping to knock out the two highest interest ones this year. I really think we can do it.
I’m glad we’re not alone in this battle to be debt free. :) Good luck, you two.
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Way to go on paying off yours!! I agree, it’s so exciting to meet other couples that are doing the same thing. It’s CRAZY how defensive and angry people get about it. I don’t understand it!
Ps we should meet soon!!
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Andrew
Allie,
That’s awesome! Go out and have a fun celebration. You guys have earned it the honest way, which is rare these days.
Hope you two are dominating OHIO.
-Neel
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That’s interesting about needing to have debt in order to purchase a house. I never heard that before but we do all the opposite stuff when it comes to buying a house anyway (like you don’t need to have a 10% down payment. Or any down payment at all. ). We have our car and both our student loans paid off at this point so I’m curious to see if that will impact our next house buying experience.
We do the opposite and we actually pay for everything with credit cards because that’s how we keep track of things. We’re able to track spending through our statements and see where our money goes. But the flip side of that is our statements are paid off in full each month, we don’t ever keep a balance on the cards. That’s where I think people can get into trouble, when they start keeping and maintaining a balance.
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Andrea- I will be interested to see how our house-buying experience goes as well. I have a feeling it won’t be too bad since we’ll have recently paid off debt and I technically still have 16 credit cards open from my college days (with zero balance). Ridiculous.
But I know a lot of people who use credit cards and just pay off the balance immediately. My aunt and uncle do that and it definitely works for them. I, however, can not do that. I need to use cash or a debit card. But that’s just from learning about my personality and what works for me financially over the years.
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Marsha
I’m so proud of you and your husband! It’s great to actually know there are young couples out there that do want to cut up credit cards and do the debt free thing! I’m very familiar with the Dave Ramsey plan and when you started your blog, right away I wondered if you were living it. Yes, it does take sacrifices and a lot of hard work to get there. Once you are there, you will be feeling like a load has been lifted off your shoulders. God is so good! …and soon “you’ll be living like no one else.” God bless you both as you keep on keeping on!