Welcome to Debt Free Stories. Today, I’d like to introduce you to Doug and his wife, Laura. Together they paid off $23,000 in 16 months. Doug writes at Doug Smith Live.
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.
I have been married to my high school sweet heart, Laura, for just over two years. We both grew up in Pittsburgh, PA. My wife is in sales for a software company and I am a fundraiser for a local non-profit that helps the homeless.
2. How much debt did you pay off? What kind of debt was it? How long did it take you?
We paid off just over $23,000 in one year and four months. The debt consisted of my student loans and a car loan.
3. What inspired you to get debt free? Was there a particular event?
I went through Dave Ramsey’s Financial Peace University when I was 18 years old. That inspired me to be intentional with my finances and to follow Dave’s six steps. When my wife and I got married, we both made the decision that our first financial priority would be becoming debt free.
4. Did you follow a particular debt freedom plan or book, such as Dave Ramsey or Debt-Proof Living?
We knew the principles of Financial Peace University; however, we also met with a financial planner who was also a huge Dave Ramsey fan. He took all of our financial information and put together a plan for us to get out of debt as fast as possible.
5. What are the top 3 – 5 ways you found money to put towards debt.
- Because we wanted to get out of debt as fast as possible, we stopped saving money after we had an emergency fund in place. We all the extra money we had been putting away toward debt reduction.
- We met with a financial planner and he gave us a specific plan to get out of debt with a specific amount of money to put toward debt each month. He also listed our debts in what order we should pay them off. He devised the plan; we just simply stayed disciplined and followed it.
- We put any extra money that would come in toward our debt.
6. What are your top 3 – 5 tips for saving money/pinching pennies to put towards paying off your debt.
- Make paying off debt a priority. Look over your current budget. When you see where your money is going, you will know what you are currently prioritizing. If you’re going to get serious about becoming debt free, you have to make that your first priority.
- Meet with a financial advisor. I never think that I’m the smartest person in the room. Our goal is to meet with experts and ask them for advice. We had financial advisors look over our budget and make suggestions about what we could cut. Then my wife and I would have discussion about what we were willing to do and what we weren’t.
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 both initiated it. For us, we have weekly staff meetings with each other. In those meetings, one of the things we discuss is finances. There wasn’t a lot of tension once we got a plan from a financial planner and started following it. The tension would come when we didn’t have a plan and didn’t communicate about finances. If you can talk about your finances every week and have a plan that you are working on together, there shouldn’t be a lot of tension.
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 it together. I focus more on the big picture (saving for a house, vacations, emergency fund, etc.) and my wife focuses on paying the bills and keeps track of our budget. We try to discuss finances once a week. We are not perfect at it and we do have weeks where we do not meet at all, but as much as we can, we try to stay consistent with our weekly meeting.
9. How did you celebrate when you became debt free?
We screamed, “We’re debt free!”, I tweeted Dave Ramsey and let him know. I wrote a blog post telling people how we did it. (read it here: http://dougsmithlive.com/debt-free/). We also went out for a nice dinner and treated ourselves to new running shoes and running clothes.
10. What habits did you form while being debt free that will now stick with you for the long term?
- Not spending the money we set aside to pay off debt. We made the habit of now needing or spending the money we put toward debt and now we use that to put toward our emergency fund, vacations, and a down payment on a house.
- Talking about finances with each other consistently
- Actually making a budget!
11. Was there something that you gave up that you will go back to now that you are debt free?
For us, it was saving money. Now we’re able to save and invest the money we were using toward debt. We also started a vacation account where we put a portion of the money we were putting toward debt toward vacation. We just went on our first vacation together since our honeymoon. It was incredible to be able to pay for the trip with cash!
12. What are your financial goals now?
- An emergency fund with 6-8 months’ worth of expenses it.
- A 20% down payment for a house.
- Continue to increase what we put into our retirement accounts.
13. What advice do you have for someone that is paralyzed by their debt load, but wants to be debt free?
- Go through Financial Peace University.
- Get a financial planner to coach you and put together a plan for you based on your current situations.
- FOLLOW THE PLAN!
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 worth it! Do whatever it takes. It may seem like you’ll never be debt free, but if you’ll be intentional and consistent, that day will come a lot faster than you thought it would. As my high school football coach always said, “Day to day intensity, week to week consistency, builds champions!” I believe that to be true in every area of our lives, and especially in finances. Good luck!
Thank you, Doug, for being so honest with your debt free story. For more stories like Doug’s, go to 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.
Please note, I AM NOT A FINANCIAL PLANNER. This series was written based on the experiences of other who have become debt free. If you feel you need additional advice, please consult a certified professional.
This post is linked to Thrifty Thursday.