How We Paid Off $22,000 in Debt in 14 Months (Part 1)

Luxury on the cheap: Bath salts and hair conditioner are from Marshalls. The pedicure I did myself.

Luxury on the cheap: Bath salts and hair conditioner are from Marshalls. The pedicure I did myself.

We're officially debt-free! Hooray!!

It feels like a HUGE weight is lifted from our shoulders, and I CAN'T WAIT for all of you to feel the same! 

Here's how we did it, honestly:

*important preamble* My husband graduated with very modest student loan debt, and I graduated debt-free AND with a car (which I later sold.) Both of these situations were thanks to our parents, and being born into a white, upper/middle-class society. This put us in a position already above most average Americans. 

How it Started

After we got married, after the honeymoon, we had a lovely little come-to-Jesus finance meeting. It was scary. I probably cried. But it was necessary. When we finally accumulated all of the crap we had been  avoiding talking about into a giant spreadsheet, it was daunting. 21k in debt. And not a lot in savings. How did that happen!? 

My credit card
This was mostly consumer debt. Whatever I couldn't afford in debit cards, I covered with my credit card, every month. Yeah. This started from a Europe trip in 2014, combined with moving out on my own and living above my means in NW DC for a year. Those years were fun, but I was NOT cooking, and generally being financially illiterate with the little I did make. Also there was some last-minute wedding expenses thrown in there.

N car loan
What was left after he bought a new 2015 Chevy Sonic. He bought it a few months before we reconnected, in late 2013. It is a GREAT car, very reliable (knock on wood), and I am secretly very glad he made this purchase before we got back together ;)

Personal loan
We had a beautiful, regret-free engagement experience, which this is from. 

N student loan
This was the lowest interest debt we had.

This is how we did it, EMOTIONALLY.

(Stay tuned for how we accomplished this TACTICALLY in part 2.)

1. Remove the Fear

Your relationship with money is like your relationship with anything else. If you don't SPEND TIME with your money, you will not YIELD the BENEFITS. I used to NOT open my mail, AVOID any and all financial conversations, and generally stay in the dark as much as possible. But that is what got us INTO this debt, so, something had to change. 

First, we set up a master spreadsheet with our goals, at-a-glance bank accounts overview, and monthly budget tracker. Every single morning, I (still) log onto our accounts and track how much is in each account. Then, I look through our recent purchases and categorize them into the right bucket in our budget, noting and commenting to Nick when we've exceeded any allotment. So it is more "reactive" than "proactive", however, this is what works for us. Because it's most important to realize WHAT you're spending your money on first, then adjusting accordingly simply by building your own awareness.

Then, we implemented weekly financial meetings (OK, bi-weekly.) But wither way, every now and then we sit down together after dinner (wine helps too) and just talk. How are we doing? What can we cut? What did we do well in? What's coming up next week? Etc. This really helped us PLAN OUT our future, and it takes away the stigma of "talking about money." We try to not have it last longer than 30 minutes, or fights will inevitably occur! Keep it short!

2. Have a "Why"

Without a goal as to WHY you want to be debt free, what's the motivation to getting there?

Here's ours:

- I want to ultimately work for myself, at home, as a freelance writer. This requires financial risk. So we want to be debt free and have an emergency cushion to fall back on during the first few years.

- We want to own our own home. As it stands we're in a very HCOL area.  

- We want to TRAVEL the world

- We want to have children some day (I hear they cost money)

- We want financial freedom so we can give generously and help others

- We don't want to be mindless consumers and contribute to the poverty and slave labor that mindless consumerism creates in developing (and developed) countries. 

3. Get Inspired

No, you do not need a masters in Econ to understand the basics about finances. All you need is Youtube and a few free hours! Looking at these resources is FUN because LEARNING is fun! Remember, we're not afraid anymore!

- The One Page Financial Plan - GREAT book, highly recommend. This is the FIRST BOOK I read to start our journey. 

- r/frugal , r/personalfinance and r/FIREyFemmes are all AWESOME communities I look at every time I'm on reddit... so like... 24/7.

- The Frugalwoods have a 30-day No Spend email challenge that was very helpful in kick-starting our mindset shift about how we approach money

-Some of my favorite YouTube resources, who are all problematic but the overall messages I like, are.... Dave Ramsey, The Financial Diet, Sarah Nourse and other random youtube financial bloggers. There are a TON!

Stay tuned for Part 2: HOW we did this, step by step, coming soon!