A lot of people have asked us about being debt-free and what steps we've taken to get (and stay) out of debt. I post with a bit of hesitancy because this is not a finance blog by any means, and I do not have any expertise in how to manage money. So let's say: what I might lack in savvy, I make up for in scrappy. The biggest thing I know about money is how to NOT spend it. We started to pay off debt in May of 2013, and by June of 2018 we were debt free, having paid off a total of $76,783. This isn't a giant number, I understand; I know many people have much more. But comparative to our income, which is not large, that number was significant. It was a combination of undergraduate and grad school loans, car loans, a personal credit card, a Home Depot credit card, and a Guitar Center credit card. We had always listened to a lot of Dave Ramsey, but it was kind of always just for entertainment value and dreaming about "someday" when we paid off our debt. We weren't actually following it for a long time. Primarily, we went out to a LOT of restaurants and bars; I remember tallying it and there were weekends we'd spend $300, easily. It feels ridiculous now, but it's no joke. Food and drinks are a delicious and super fun way to make money disappear. That was our first step, eliminating all restaurants and bars, and we pretty much did only that step for a couple years. We had a loose "budget" but it was more just a detailed chart of what we realistically paid for each category (utilities, groceries, gas, etc.), compared to every drop of income we had coming in. It set in stone what "extra" we actually had, which wasn't tons, granted. Whatever we did have, we threw towards the debt - smallest to largest, just like Dave Ramsey advises. By two years in, we had paid off just a little over $39,000. We cruised along pretty solidly until we had kids, which didn't totally derail us, but definitely slowed us down a bit, since I was working much less (we couldn't justify the cost of full-time daycare for two kids against my income.) We would occasionally go to breweries (most of those were "research" that we could write off since Dave was doing a lot of freelance beer writing) and sometimes out for pizza, but for the most part, we were not in restaurants. We weren't exactly roughing it though, we did a lot of dinners out like this: We established "personal accounts" that were to spend on anything we wanted, and we each got $50 every two weeks. If it wasn't an absolute family necessity, it had to come out of our personal account. We're pretty hardcore about that, still - if I want a new throw pillow, that's a personal account purchase. If Dave wants a new pair of jeans but doesn't necessarily NEED them, that comes out of his personal account. This continues to be one of the best things we've done, since we don't have to argue about money at all. If you want it, but we don't need it, save up in your personal account then do whatever you want with it. By the beginning of 2017, we were down to about $22k, a number that finally felt surmountable. Every extra gig we booked (we're musicians), every extra freelance writing project we got, any tax refund check, any little bit we could we sent towards debt. Huge bonus excitement when Dave sold his first novel, which was just the push we needed to knock it all out. We made this very sophisticated graph to help us track each thousand we sent to debt: So once we were out of debt, we were psyched - but it was sort of anticlimactic, since we then shifted all our efforts into building up a strong emergency fund so that we would never have to go into debt again. So, needless to say, we still don't splurge on much, since we basically just redirected our efforts towards savings. But the beauty of that has been that we've been able to not enter back into debt for anything - we paid cash when our steps got replaced, cash for both of our cars, cash for any trip we take. If we can't pay cash for it, we don't do it. Believe me, there are a WHOLE lot of things I'd like to do that we can't, but it's become more important to me to have total freedom, because that's what it feels like, honestly. I don't feel like we have to have giant salaries or work crazy hours because we've realized we don't actually need that much to maintain our lifestyle. We're now working on the house, and baring any major catastrophes, we should be done well before the kids graduate high school. So after that....who knows! Maybe we'll let restaurants cook all our meals.
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1/29/2025 11:20:24 pm
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