Unfortunately, I came into my marriage with a large amount of student loan and credit card debt from my college days. My 1990 Lumina was also dying, and I needed a reliable car to get me to and from my new job. The result is a large amount of debt, and we do not even have a mortgage.
As much as I loved my college education, the price I am paying for it now does not seem worth it. My husband and I are now working very hard to get out of debt. We want to do this quickly for a few reasons:
1) Interest is a waste. If we paid our monthly payments as is, we would end up throwing away almost $3000 in interest on our car. If we paid my student loans as is, we would end up losing almost $30,000 in interest (though we would get a bit of that back in tax write-offs). On one of my credit cards alone I was losing $75 per month in interest.
2) The monthly payments are high. Can you imagine a life in which all you have to pay for are your basic daily necessities? My husband and I think about that life often, and we want it. It is also difficult to save for the life we want when we have these kinds of financial obligations to our debt
3) Owing money is stressful. Constantly knowing I have to meet payment obligations, that someone else could take everything from me if I couldn’t meet those obligations, is very stressful. .
4) We want to be a good example to others. Living a life out of debt will express our feelings that having “stuff” is not what is important. We want to be responsible with the resources God has given us, and borrowing to have more seems like a never-ending cycle of appeasing “wants”.
We are hoping to start a family soon, and getting out of debt as much as we can before that happens is our goal. This means we are making a lot of sacrifices and constantly fighting urges to satisfy “wants”.
So far we have:
-Paid off all of our credit card debt.
-Paid off about 1/4 of our car loan in 4 months.
Here is our game plan and some of the principles we are following to get out of debt fast:
1) We put together a budget. As much as I hated doing it (it has become a lot more difficult to justify buying a new nail polish color when I have to justify it on paper). There are many online budgeting tools which make this easy, and most of them are free. I took 20 minutes to set out a budget online, and every day I look at my bank account statement for 5 minutes and fill everything in on the budget sheet. I do this every day to avoid forgetting where things were spent (ex: “what did I spend $30 on at Target 3 weeks ago?”)
2) We bought a financial seminar. Getting educated and setting out a Christian-based financial partnership is half the battle. My husband and I are currently working through Jim Sammon’s Financial Freedom Seminar (see his inspirational story and financial tools Here.)
3) We saved, then stopped saving. Our initial goal was to get some money hoarded away just in case. We realized that by applying so much to savings, we couldn’t get out of debt quickly. So we saved up what we thought would be a safe amount, which took a few months. Now, we have stopped saving and everything goes to debt. This will change after the debt is gone.
4) We have decreased our 401k contributions temporarily. We now only give the amount which is 100% matched.
5) We are each only allowed $50 per month for non-essential items. This seems generous but it is not. For example, any non-essential item falls into this category (such as my husband’s protein supplements, or my new running shoes).
6) We make things ourselves. Our sofa is in terrible shape and I want a new one terribly. So I bought a few king-size bed sheets from target and made a make-shift slipcover from the sheets and 1-inch snaps. I even recovered the throw pillows in pretty coordinating calico patterns. Our couch now looks so much better and will hold out a few more years. I have also found recipes for many household items such as laundry detergent and cleaning agents. When I needed a shower gift, I made a baby blanket. Need I even mention cooking for yourself and bringing your lunch to work? Find ways to do things yourself and you will save.
7) We make do. I am 5’10” and my husband is 6’3”. We sleep in a full-size bed. It is not always comfortable, but rather than give in to the financing options and buy ourselves a new bed, we bought a memory foam topper from Overstock.com. It is comfortable enough for a good night of sleep and we are keeping our attitudes positive about the size (after all, we are forced to snuggle more).
8) When we buy, we buy used or discounted; I even got our financial seminar used on ebay. As we speak, my skirt is from goodwill. I joined Groupon.com and got a $50 haircut for $25. I buy half of our groceries at Aldi to save where I can.
9) We keep our rent low. They say you should keep your housing cost under 1/3 (some say ¼) of your income. Our rent is about 1/8 of our income. I would love a bigger apartment, but an extra $100 on rent is an extra $100 not going toward our debt. We will wait until mid-winter when rent prices are down to look for a bigger place. Look around for good housing deals. Do what you can to keep this cost down and be ready to make sacrifices.
10) We have created an accountability partnership with each other. We have text messaging from our bank which notifies us if money leaves our account. I know that if I buy anything, my husband will know immediately, and I will have to justify myself. $10 here, $10 there…. I'll be a lot less likely to give into temptation when I know he will know about it. Keep each other accountable and try not to get defensive.
11) We have rid ourselves of unnecessary expenses. This has been the most difficult for me. Our date nights out are now a thing of the past. That does not mean we don’t still go on dates: we picnic, go to the $1 movie theater a few towns over, or just go on a long walk through the forest preserve together. We have also cut our cable service and the internet from our phones. I think in the long run I’d rather have a college education for my children than internet on my phone.
12) Be joyful and remember what is important. Following Jesus in the journey to God is the purpose of life, not stuff. “Set your mind on things above, not on earthly things” Colossians 3:2. Remember what is important and stick to your resolve.
I hope this was an inspiration for you to get yourselves out of debt! I definitely know that it can be overwhelming, but I know this is a temporary season in life, and it will be over faster if I sacrifice now. I hope that by sharing so much of my personal experience, you will be able to relate and apply some of these principles to your own lives. Just remember: you weren't meant to give and receive things, you were meant to give and receive love.