Meet Jackie. She and Her Husband Paid off $147,000 in Debt | Debt Free Stories

Welcome to Debt Free Stories. Today, I’m pleased to introduce you to Jackie. She and her husband paid off $147,000 in debt–including their home. After paying off the debt, she was able to quit her job to pursue her passion. She blogs at The Debt Myth.

1. Tell us about you and your family. Where are you from? What do you and your spouse do for a living? What are your hobbies? Include anything that you’d like to add to give the reader an idea about your personality.

We live in metro Phoenix, in a 70s tract house that we’ve been gradually re-doing. (That’s one of my hobbies.) I also love, love, LOVE to travel. We both like to read, play Ingress, and do various other geeky things. My husband is a software QA engineer and until last week I was a web content administrator. I quit my job to focus on my own stuff (blogging, painting, rental property, my iPhone app, writing Kindle books, etc.)

Quitting my job is one of the things being debt free has enabled us to do. It’s awesome to (FINALLY!) have barely any bills and be able to live off passive income. If you want to become debt free, I’m here to tell you it is TOTALLY worth all the time, effort, and frustration.

2. How much debt did you pay off? What kind of debt was it? How long did it take you?

We paid off over $147,000 in debt (actually way over that amount, if you want to count a $210,000 rental property that I sold at a slight loss.) About $52,000 of that $147K was consumer debt (credit cards, a student loan, a car loan, a home improvement loan, etc.) The rest was our house. From start to finish it took us a very long time — I would guess 10 years. But it wasn’t a decade of nothing but paying off debt.

When we first started we couldn’t have even conceived of becoming completely debt free. I mean, we didn’t even think of it! We just wanted to pay off our credit cards, which seemed like a huge task since we’d struggled with it for years. After we got a taste of life without credit card debt, I wanted to pay off my student loan. Then my husband decided to pay off his car. Basically, we took it one debt at a time until I thought hey, maybe we can pay off the house, too. And so we started plugging away on that.

The funny thing about paying off debt is that the more you do it, the faster it goes. For example, it took us about 3 years to pay off a combined $17,000 in credit card debt, but later we managed to pay off twice as much in 3 years on about the same income. Part of that is because when you have less debt, you have more money. Your money stays yours, so you can make it work for you. And part of it is that you get even more enthusiastic about getting it done as you see progress. When it came to paying off the house, we paid off the last $49,500 of it in less than a year. If you graphed our debt payoff progress, it would look like a hockey stick.

During those 10 or so years, our incomes were all over the place. They ranged from a low of about $2,300/yr (no zeros missing there!) to a high of maybe $80,000/year. We hit everywhere in between. We also went through multiple job losses, surgeries, huge car repairs, etc. We paid for braces, college tuition for my son, and did fun stuff like traveling while we were paying off debt. Basically, we had a normal life 🙂

3. What inspired you to get debt free? Was there a particular event?

We both were sick of money issues and the stress that goes with that. We’d each been married previously and had experienced plenty of money problems, and never ever wanted to be in that place again.

For me, my reason quickly became freedom. I wanted to be able to do the things that matter to me without having to stress out about money. Travel, buy fun stuff, give gifts, help others, work if I feel like it and not if I don’t, etc. I do remember thinking shortly after my ex and I got divorced that no one was ever going to do this for me. I needed to count on myself and support my son, and that meant getting my financial life in order, starting with building an emergency fund for the first time.

4. Did you follow a particular debt freedom plan or book, such as Dave Ramsey or Debt-Proof Living?

No, although we inadvertently used the debt snowball method without having heard of it. While I was paying off my student loan I kept hearing about this Dave Ramsey guy, so read up on that method. (We didn’t do his plan though — we increased retirement contributions, for one thing.)

Then the iPhone came out, and I figure other people might like to obsessively check their progress as much as I did, so I created Pay Off Debt, an app to help people keep track of their debt snowball and stay motivated. I want people to be inspired every time they checked their phone, so that’s why the icon for it says PAID!

We used my app to track our progress while we were paying off our house, and of course I ran a zillion different scenarios. (How much faster will we pay it off if we can send $50 more a month from now on? When’s our debt free date now that I sent in that $1000 from that extra work? etc.)

5. What are the top 3 – 5 ways you found money to put towards debt?

Oh, we did all kinds of things. We asked for raises, did work on the side, got better jobs, I started a business, etc. I had already cut expenses to the bone early on, since experiencing a multi-year stretch of unemployment, so there wasn’t much to be done there, although I think my husband cancelled his gym membership. Of course, as we paid off debts that gave us more money to put toward the remaining ones, so that made a huge difference as time went on.

6. What are your top 3 – 5 tips for saving money/pinching pennies to put towards paying off your debt?

I don’t think it’s really so much about pinching pennies as it is being willing to stop the excuses. Stuff will happen that’s not your fault, and stuff will happen that is. It’s what you do that matters.

For stuff that’s not your fault (like a natural disaster or getting laid off at work) the trick is to figure out what you could do differently to minimize the impact and ideally prevent it from happening again, and to continue forward with your debt repayment as best you can regardless. You have to be willing to do what it takes, and that means not borrowing money. Borrowing is not a solution, it’s a problem. So where there’s a will there’s a way.

In practice, that could mean living somewhere you can walk to work if your car breaks down until you can save up the the money to repair it, telling your kid they have to pay for their own cell phone if they want to keep it (this is not a bad thing you know!), asking for discounts every time you buy something, etc. It’s all about living with the choices you make, and changing what isn’t working vs. telling yourself “oh well, but I can’t do that because _____.” You can do a lot of things if they’re super important to you. Get creative. Ask for help. Be persistent. Building an emergency fund also helps enormously.

7. Who initiated the debt free goal? Were there arguments during the time you were working on your debt? How did you resolve the tension and arguments?

We’d both been working on paying off our credit cards even before we got together, so we were on the same page with that from the beginning. We didn’t have any arguments about it; probably because we both saw getting out of debt as a solution to past problems.

By the time I suggested paying off our house, my husband was on board but didn’t see how we could possibly do it. Neither did I for that matter, but that’s never stopped me before. So we just started, and kept sending random amounts of extra money to it multiple times a month until it was gone. It’s the old “How do you eat an elephant? One bite at a time.” I was impatient and wanted to go faster and get all extreme, but I somehow restrained myself until the very end because my husband would not have been into that.

8. Who handles the day-to-day finances in your home or do you work on it equally? How often do you and your spouse discuss your finances/budget/spending?

We do his/hers/and ours finances, with each of us sending the same amount to the joint account and then doing whatever we want with the rest of our money. So we both handle the money. We actually talk about money and our short- and long-term financial goals a lot, but not so much about spending. Of course I know how much he spent on the cool car he saved up for after we were out of debt, and he knows the crazy amount I spent to go to Antarctica. But it really doesn’t matter since we only spend money that we already have, and save up if we want something.

9. How did you celebrate when you became debt free?

We went out to eat with our families, and I went around saying “WE PAID OFF OUR HOUSE!” to everyone that day. I think I even announced it during a meeting at work. Basically we didn’t shut up about it.

I also bought a doorknob. (Our first big debt free purchase, woohoo!)

But it was a symbolic doorknob. For the last few months while we were paying off our house, I refused to buy anything we could possibly do without. I wanted that mortgage GONE, and I could really taste it. During that time, the doorknob to the door we used most often to enter our house broke. So we had to walk around the house to get in through a different door. I know it was only $30 bucks or something, but “only $x” makes a difference. (Especially if you’re in the habit of thinking “it’s only _____” a lot.) That was thirty bucks I wanted to see gone from the mortgage. Every time I walked to the other door I thought about how good it would feel to be completely debt free.

10. What habits did you form while being debt free that will now stick with you for the long term?

Two things: Pay attention to your money, and only spend money you already have. Not money you “know” you’ll be getting next week when you get paid or whatever. Money you have in your hot little hands right now.

11. Was there something that you gave up that you will go back to now that you are debt free?

I can’t really even think of anything that we gave up. I guess my husband signed up for the gym again. There are plenty of things we don’t have/do that many normal people do, but we like it that way. (For example, no cable TV.) We’ve been completely debt free for about 2 years now, and we certainly spend more money on random things + eating out than we did before, but that’s because we have the money now that it isn’t going to pay for things (plus interest) that we bought or did years ago.

12. What are your financial goals now?

Quitting my job was a big financial goal that I just made happen. My husband is working on building up his retirement savings. I may work on buying another rental property (with cash.) I saved up for my first rental property in my retirement account, so it’s paid for and earning money for retirement. At this point we’re pretty much working on being able to work less 🙂

13. What advice do you have for someone that is paralyzed by their debt load, but wants to be debt free?

My advice is going to sound really simple, but simple works. Just start, and keep going til you’re done. You don’t have to see exactly how it’s possible, as long as you believe that it is and stick with it. The key is to stop borrowing money, no matter what. If you do that one thing and make your debt payments on time or early, you will eventually be out of debt. Faster, of course, if you actively work on paying it off and send extra money in often. Even small amounts add up.

You also have to want it more than whatever you’re tempted by along the way. Want it the most, and then don’t give up what you want most for what you want (or think you need) right now. And if you feel like you’ve screwed up, don’t stop or make it worse. Just move on and keep going.

14.Is there anything else you’d like to add that you think would help the readers who want to become debt free?

It’s all about changing the way you think about debt and money. When you change your mind and your habits, you change your life. (I have a little email course called The Debt Mindset Reset about that if folks want to sign up.) Thanks for interviewing me!

Thanks Jackie, for being so honest about your debt story. Did you enjoy Jackie’s story? Read more Debt Free Stories.

Would you like to share your real life debt free story? You don’t have to be a blogger to share. Send me an email at familybalancesheet at gmail dot com. Put “Debt Free Stories” in the memo line and I will send you a questionnaire.

This post is linked to Thrifty Thursday.