Today’s Debt Free Story is from Olivia. She blogs about living a fabuLESS life at Snyders Tell All.
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.
Hi, my name is Olivia, and my husband is Ryan. We’ve been married 7 years and live in Texas. We have two boys, ages 3 years and 10 months old. I’m a former 3rd grade teacher, but now a stay at home mom and a graphic designer of Joyful Art Designs. I also blog at Snyders Tell All. Ryan is a high school math teacher and also officiates college basketball (November thru March). We are both planners and despise wasting money on debt/interest, which is what led us to pay off our mortgage as soon as we could!
2. How much debt did you pay off? What kind of debt was it? How long did it take you?
We paid off a total of $118,000 debt. $110,000 was our mortgage and $8,000 was my car. It took us 33 months to pay it off! I was 24 years old when we paid it off. The first week after our Honeymoon, Ryan paid off the remaining debt on my car. He does not do car payments.
Two catalysts that helped set us up to pay it off quickly:
1. The first and most important step to paying off our house, was buying a house we could afford. We put down $40,000 towards it.
2. We got a 15 year note. We made sure we could afford the monthly payments on a 15 year mortgage, with the mindset that we would pay more each month.
3. What inspired you to get debt free? Was there a particular event?
There were two things that inspired us to pay off debt.
1. Our plans for me to be a stay at home mom on one teacher salary. I knew I was going to be a stay at home mom when we had kids and since we were both teachers, we simply could not afford for me to stay home, unless we got rid of something big in our budget. Since we didn’t have any other debt, we decided to tackle our house as fast as we could. Our initial goal was to pay off our 15 year mortgage in 7-8 years by doubling our payment each month.
2. Our second inspiration was not wasting money. It is absolutely absurd how much money is wasted on interest from a mortgage. Absurd! Our house was $150,000 (thank you Texas for affordable houses) and the thought of paying over half a million dollars for it (due to interest) made us sick to our stomach. If we’re going to pay half a million dollars for a house, I want it to look like that. We ended up having to spend an extra $11,000 in interest for our house. That is an extremely small amount of interest on a house because of how quickly we paid it off, but to us, that is $11,000 that could have gone into investments or been used elsewhere. When I think about how much money an average person spends on interest, I think about how that money could have turned into millions through investments over time. And this is just on a mortgage, not including any credit card or student loan debt. Obviously, I’m a realist and know some debt is probably going to occur with a mortgage, unless you have thousands of dollars sitting around for a house, but minimizing it is important to us.
4. Did you follow a particular debt freedom plan or book, such as Dave Ramsey or Debt-Proof Living?
We did follow Dave Ramsey’s 7 Baby Steps to becoming debt free. We skipped Baby Step #5 (college funding) because we didn’t have kids at the time. We purposefully waited to have kids (4 years) until we felt financially sound. People always told me “you’ll never be able to afford kids” or “there’s never a good time to have kids financially.” Obviously, I disagree with that. But I do realize some things happen that we don’t plan for as well. We made a plan and it ended up being God’s will as well. We’re now on Baby Step #7 (building wealth, which includes college funding). We read both of Dave’s books (Financial Peace and The Total Money Makeover)
5. What are the top 3 – 5 ways you found money to put towards debt.
1. Our two teacher income – Our DINK (double income no kids) way of life was very important in paying off our house. Teachers income in Texas actually starts pretty good ($44,000 when I started), but it doesn’t increase much and there aren’t any bonuses (some years it doesn’t even increase WITH inflation…one year we didn’t even get a raise due to the economy). We took advantage of having two incomes. Using your income to pay off debt sounds obvious, but it surprises me how many people don’t take a look at how much they really make and how fast they could pay off debt. At one point towards the end of our 33 month journey, we were paying 5 times our mortgage (over $5,000) towards our house. Which meant we were living off of roughly $1600-2600 a month (depending on if my husband was reffing that month), which was plenty for us two (this amount still included our Roth accounts of $917).
2. My husband worked (and still does) an extra job – My husband refs high school and college basketball, which brings in a good extra income. Basketball season is November through March, so we don’t see him often during these months, but luckily it’s just seasonal and the benefits are huge. When it was just us two, he worked more on the weekends to earn some extra cash, but now with kids, he does that rarely. He works more college games now, so the higher paid games help replace the weekend jobs.
3. Extra money from budgeting wisely and spending less (specific tips below).
6. What are your top 3 – 5 tips for saving money/pinching pennies to put towards paying off your debt.
I talk a lot about this in my post “Top 4 Ways to Pay Off Debt” but they include:
1. Grocery shopping wisely – We shop at affordable stores, shop the ads/sales, and menu plan. I rarely use coupons. I just didn’t have time for it, nor did I enjoy it or use many of the items that had coupons.
2. Dine out on a budget – We used a coupon for 98% of our dining out experiences. I LOVE dining out, so this is what allowed us to enjoy that, but not spend a lot of money. We still use coupons 75% of the time we dine out. It’s now hard to spend full price at a restaurant when we rarely ever have. We also look for places where kids eat free now.
3. Get rid of your car payments – This is an entire post on its own, but I am a big believer that this is one of THE best ways to not only pay off debt towards something else, but not waste money…and instead, use it for investments. At least evaluate your car situation if you have payments.
4. Budget – Obvious, I know. But having a budget and writing down every single expense cuts down on A LOT of spending. For the first 5-6 years of our marriage, we wrote down our budget and expenses in a spiral notebook. We’ve since moved on to Excel. We are pretty controlling of our budget and writing down our own expenses, so we don’t use a third party to do it. Our goal is to write down expenses every day so we know where we are in our budget that month, but to be honest, this probably happens 1-2 times a week now.
7. If married, 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?
My husband definitely was in charge of our debt free journey and made the initial goal to get a 15 year note and make extra payments on it from the start. He actually bought the house before we married (he used it to propose to me), and he was making one extra payment on it before I even entered the picture. So he was paying over $2200.00 a month on his one teacher salary for a year before I earned an income. Together, we made the goal of paying it off early though. It’s important to be on the same page as your spouse about finances.
There were plenty of arguments. I would break down and cry a few times, but he stayed calm, reminded me of our goals, and always gave me a say in opting out of it. He would explain the consequences of keeping a mortgage longer (me not staying home) and I’d quickly get over feeling sorry for myself and get on with it. I think sometimes I just needed to vent. It was hard because everyone else was spending so much money, but now…I can’t even explain the freedom. It’s still hard though because we live on one income, but I have no worries of the future. Also, reading Scripture helped a lot…it still does. Knowing we’re spending the money God has blessed us with wisely and leaving an inheritance for our children’s children, is extremely comforting. Constant communication is so important.
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?
For the first few years of our marriage, Ryan handled the finances. Once we had children, I made majority of the purchases, so it made sense for me to write down the expenses. This was eye opening for me and gave me a real appreciation for what he went through all those years. I highly recommend this for couples. Ryan still keeps track of his spending in his spiral notebook (mainly for tax purposes for reffing). He still physically pays all the bills and keeps track of any information with those companies.
We plan our budget at the beginning of the month and write down any expenses we foresee. Then we will randomly discuss the budget as needed throughout the month. We also look over the final budget at the end of the month. This is when I get in trouble for over spending. Just kidding. Kind of. Don’t overspend.
9. How did you celebrate when you became debt free?
We went out for a nice dinner. We still budgeted really nice vacations during our Spring Breaks and the summer, so I didn’t really feel deprived of big stuff like that. We have yet to call in to the Dave Ramsey Show, but we plan on going to his studio to visit and yell, “We’re Debt Free!” I hope we get to meet him.
10. What habits did you form while being debt free that will now stick with you for the long term?
Using coupons for eating out. Never borrow money for anything (with exception to a house if needed). Write down every single expense on our budget.
11. Was there something that you gave up that you will go back to now that you are debt free?
We are able to spend our money a little more freely now, but since we are on one income (with two side jobs), we still spend frugally. The biggest thing paying off our house did for us is allow me to stay home comfortably, and it saved us a TON of money on interest…thousands of dollars that we now get to spend where WE want to. It also freed up some money to put into wealth building – Retirement will come pretty early for us if we choose so and college loans won’t be a burden for us or our children. There are just more things we can afford now. Once our kids are in school our goal will be to look into buying our dream home.
12. What are your financial goals now?
Our goals now are to fully fund our Roth IRA accounts, make other investments for retirement and college so our kids do not have to pay for college, and have the option to retire early. We’re on track with all of them. We are currently saving for a new car for me. We also are both trying to build our “second jobs” to increase our income. Unfortunately, teaching isn’t a financially growing career, so we have to work extra if we want extra. I admire what my husband does and am proud to be married to an educator who impacts the lives of children. He loves what he does. I love what I do. It’s a blessing.
13. What advice do you have for someone that is paralyzed by their debt load, but wants to be debt free?
Surround yourself with people who are debt free or are on that journey. There is nothing harder than trying to save money than by being bombarded by people who do not operate that way and even try to sabotage your goals. If you have to be around those people, do not discuss your finances with them. Dave Ramsey says, “If your broke friends make fun of your frugal lifestyle, you’re probably on the right track.”
If you’re a believer, pray about it and ask God for the wisdom and strength to do it. Google “Bible verses about money” and you will be very encouraged. Know that you’re not depriving yourself, but giving yourself so much more. Seek financial help.
14.Is there anything else you’d like to add that you think would help the readers who want to become debt free?
You CAN do it. The fact that you’re reading articles like this means you’re miles ahead of society. If you’re young, avoid debt now. If you’re married, get on the same page with your spouse. It won’t work if you’re not in this together. Get in the mindset that some of these “unrealistic ideas” are in fact, realistic.
Our society has created this mindset that borrowing is okay and sometimes good (tax write offs), and we cannot afford to live that way. If you sometimes feel different and alone in your debt free journey, you are doing exactly the right thing.
Making a budget and eliminating as many expenses (or lowering them) as you can, are key to paying off debt. Make sure to have an emergency fund so you’re not put back into debt when something comes up. I like Dave Ramsey’s “snowball” method of paying off debt…paying off the smallest loan first. It creates momentum.
And don’t forget to reward yourself along the way if you’re getting burned out, even if it’s just small things.
Thank you, Olivia, for sharing your family’s story. For more stories like Olivia’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 email@example.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.