Today’s Debt Free Story is from Carrie. She blogs about at Careful Cents where she helps creative freelancers and solopreneurs make a living from their craft.
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.
My name is Carrie and I live in beautiful East Texas (right outside Dallas) with my husband of just under year. Yep, we’re newlyweds and eloped together in December 2013. When I graduated high school I went straight into the workforce as an accounting assistant, and did business school on nights and weekends. After nearly a decade of working my way up the career ladder, I quit my small business accounting job to start my blog, Careful Cents.
My husband is a personal chef, so he travels a lot for work and moves around the country to learn new styles of cooking. I got tired of being left at home because I had a day job, so now we get to travel together and create our own adventures. One of the things we look forward to most is spending each summer in a new state. Two years ago we were in Denver, and last year we were in Seattle. Next summer? Who knows!
2. How much debt did you pay off? What kind of debt was it? How long did it take you?
After my first marriage fell apart, I ended up with over $14,000 of consumer debt, made up of a car loan and credit cards. It took just over a year (14 months to be exact) before I paid off all my debts and became debt free! I was only bringing home a net income of $3,000 a month, so paying $1,000 each month towards my debt was a lot of money, and took a lot of sacrificing.
3. What inspired you to get debt free? Was there a particular event?
The main event that catapulted me into wanting to be debt free, was the lowest point in my life to-date. As I mentioned, I had just gotten out of a bad relationship and had to start over. I wasn’t able to afford much, and this was the first time I was on my own since having been married.
I could barely afford my $600 rent payment, which was in a horrible neighborhood. One night there was a drive-by-shooting right outside my window. It was like 40 feet away from me and I watched the entire thing. My car was parked right outside, so it was hit with several of the bullets. I knew then, that no matter what it took, I had to dig myself out of this financial situation and move.
4. Did you follow a particular debt freedom plan or book, such as Dave Ramsey or Debt-Proof Living?
Yes, I did follow a few of Dave Ramsey’s strategies, but I also starting reading other finance blogs to see how they paid off debt so quickly. Many of their ideas were inspiring and their stories continued to motivate me through the entire process.
Another book that really helped was The Debt-Free Spending Plan by JoAnnah Nagler. Her ideas were simple to implement and only took a few minutes a day.
5. What are the top 3 – 5 ways you found money to put towards debt.
I took on extra work outside of my full-time accounting job. I started Careful Cents and used that as a platform to find freelance writing opportunities. Then during tax season, I worked at H&R Block filing taxes. The income from my extra jobs went straight to debt payments, and my regular day job paid the bills, while enabling me to build up a small amount of savings.
I also found small ways to earn extra money, specifically flipping yard sale finds for a profit on eBay. I also downsized my lifestyle and sold extra furniture, clothes, and jewelry, on Craigslist.
6. What are your top 3 – 5 tips for saving money/pinching pennies to put towards paying off your debt.
I did the regular budget audit and cut things out like entertainment, fast food, and going out with friends. I also decided I didn’t need extra luxuries like my gym membership and cable TV. I told myself that it I would only be sacrificing these things for a short period of time and could sign up for them again after I got my debt under control.
Aside from the normal saving money ideas, I started bartering for extra services that I needed. I would offer to do people’s taxes, or get their bookkeeping organized in exchange for a discount on my rent, or a small repair on my car. It was a fun and creative way to get what I needed without spending money.
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?
N/A (I was single then)
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?
The daily finances are handled my me, but my husband and I have weekly money check-ins and monthly budget meetings. He leaves most of the financial goals up to me, but we make the decisions together. We have access to all the accounts and always know what the balances are. We don’t hide anything from each other when it comes to the finances.
9. How did you celebrate when you became debt free?
I became debt-free on May 29, 2012 and the first thing I did was quit my job as a seasonal tax pro. I had been working 7 days a week for several years, and it was super exhausting. I was happy I didn’t have to work every night and every weekend! Aside from that I also bought ice cream and went to the movie theater for the first time in over a year.
10. What habits did you form while being debt free that will now stick with you for the long term?
Saving up money for what I really wanted was a big lesson, and one I still stick to. It’s tempting to know that I could just pull the money out of savings right now to pay for something I want, but it’s so much more satisfying to save up for it and pay in cash.
For the past two years I’ve enacted a 52-week savings challenge, and at the end of the year I spend the money on whatever I want. Last year it was a new laptop and this year it’s going to be a new DSLR camera. I get really excited as the year goes on and I see the balance creep up. I can’t wait until December rolls around so I can spend the money!
11. Was there something that you gave up that you will go back to now that you are debt free?
I actually thought I would want my cable TV back after I paid off my debts, but even two years later I still don’t have that subscription fee. I only pay for Netflix and Hulu Plus, which is around $18 a month — a far cry from my $90+ satellite TV bill.
On the flip side, I ate a lot of cheap food while I was paying off debt, and definitely don’t do that now. Thankfully, I lucked out with having a chef as my new husband, so we eat really good food and I don’t have to survive on Ramen anymore.
12. What are your financial goals now?
Our financial goals have shifted to growing my new business. We are also trying to get to a place where we can max out our retirement savings each month, as well as continue contributing to our travel and other smaller savings goals.
Our long-term goals include contributing more money to Kiva and being able to purchase a new Jeep Wrangler with cash!
13. What advice do you have for someone that is paralyzed by their debt load, but wants to be debt free?
While it’s important to total up all your debts to understand the full impact of your financial situation, it’s also smart to separate out your accounts and tackle them individually. This will make the “financial mountain” less intimidating, and much easier to handle.
I also implemented the Gigs for Goals strategy (as shared by BudgetsAreSexy.com) where I took on a new job for each one of my debt accounts. Since I had two major debts — a car and a large credit card bill — I applied for two new weekend jobs (freelance writing and doing taxes).
If I had several smaller debt balances that made up a larger whole, I would have worked with smaller gigs, and side projects to make money. This is the strategy I apply to our budget now, except we use the Gigs for Goals method to save for certain things ahead of time, and then use the extra cash to pay for them.
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 others who have become debt free. If you feel you need additional advice, please consult a certified professional.