Monday, January 6, 2014

Debt Progress Report #4

My last debt progress report was an entire year ago, and my have things changed since then. As a quick recap, my husband and I got married with lots of debt. When we got married in March 2011, we had about $85,000 in debt. AND we didn't even have a mortgage! Most of this debt was comprised of student loans, but some of it was a car loan and credit card debt.

A few months into marriage, my husband and I watched the Jim Sammon's Financial Freedom Seminar, and we realized that our approach had been all wrong. We committed to living a debt-free life, and being the best possible stewards of the financial resources God gives us.

Our decision to live debt-free is not very popular. While some family and friends have been very supportive, others have made us feel like we are making a big mistake. Some have said we are foolish to sacrifice so much right now when we can have a better standard of living if we are open to debt. Others have adamantly told us that a mortgage is not debt. (My husband's not-so-tactful response to this is "yeah, and cold sores aren't herpes".) Still others have wondered why we are "Throwing away so much money" paying off our debt when we could invest it. To which my husband's usual response is "Tell me any investment that will guarantee I earn more money than we waste in interest on our debt" (hint: there aren't any). The most common response we have found to our lifestyle is that many feel we are judging them just by having the beliefs we do. We don't go around judging people, I promise. Many of our friends believe differently than we do, and we are ok with that. Our beliefs about debt are a result of our faith, and we don't expect everyone to share them. But it is almost like people feel we are judging them just by not falling in line with the cultural norm.

I give these progress reports, with my husband's blessing, for the benefit of those of you who are in the same boat we are. Perhaps you are feeling the heavy weight of debt on your shoulders, or are tired of paying thousands of dollars per year in interest. Perhaps you just got married and already feel like you are twenty steps behind because of your debt (like me and my husband felt). I hope you get encouragement through my transparency and see that getting out of debt is not only possible, but amazingly attainable with God's help.

SO, the first step to living debt-free is to get out of debt. We started with $85,000 in debt in March 2011. By June 2012 we had $50,983, and our last progress report in January 2013 reported that we had $39,886 left. Our goal in 2013 was to get below the $20,000 mark, and it was not very easy.



As of today, we are down to $16,926.

We have really been working hard the last few months in particular, since we found out we were pregnant. Now with a baby due to arrive in June, we hope to be very close to being out of debt by the time our little one arrives. It will be difficult, but as we see the numbers get smaller and smaller, we are more and more motivated. I often use the metaphor that our debt is this giant gaping hole in the ground and we are just hoping to fill it up with shovelfuls of money. Every shovelful doesn't feel like it does much, but now after 2.5 years of working, we are finally seeing the hole fill up!

Another setback in 2013 was the discovery of another student loan, which the lender hadn't begun collecting on. I had no idea this loan existed until all of a sudden it showed up, and I realized we owed another $1200 on top of the original $85,000. This minor setback was frustrating, as we watched our total owed increase instead of decrease. But we took it in stride, and paid off the loan as quickly as we could.

We feel so incredibly blessed that God has worked with us through this. My husband and I both remind ourselves that in the end we want all the praise for our hard work to go to God, because we know He has been the one to provide opportunities for work and money that has allowed us to get where we are.

So what are our plans once we get out of debt?

First we plan on going on our reward trip. After so long working towards this, we are looking forward to a trip to Brazil to visit family and friends and relax.  (of course, we have to save for this trip first). THEN we will put our noses back to the grindstone and begin saving all the money we were previously putting towards debt. We hope to buy a small fixer-upper in a couple years, where we will live debt/mortgage/rent free while we save to build a home in the future. But as you know, God may change our plans, and we are ok with that. It is just so inspiring to look ahead and see a much brighter future.


  1. Wow, to have gone down so much in so few years is amazing. I have just gotten myself into very small (compared to yours) credit card debt.

    Your story is both inspirational in a positive and negative way (I don't mean to be unkind, as you pointed out debt is typical): the fact that you paid so much off so quickly is inspiration that people CAN get out of debt fast, and the fact that you restrained yourself to come up with all that money to pay off the loans so quickly is inspiration for those who don't have debt or that much debt to save to avoid debt (like you will do with all the money you were putting towards debt). I really like these posts, but I haven't (obviously) been trying to live that way. I need to practice restraint in this new year!

  2. Hi Amy! As I've told you before, these updates are wonderful! I finally paid off my loans at the end of 2013. We try to live as you and your husband do. We rent, both of our cars are a few years old and we own outright. My husband is extremely frugal and doesn't buy extraneous trinkets. We did buy outright a nice TV this year and he bought a new laptop after the old one we shared died (we went almost a year without a laptop though). We take a list to the grocery store and buy NOTHING that isn't listed on there. I am also so careful with online purchases. I only buy online when things are on sale and always use before purchasing anything. Like your family, we're expecting our first baby. I know things will change when baby is here but we've already been blessed by many hand-me-downs. :) It makes me sad when people view their student loans as an insurmountable mistake because they CAN be paid off by sacrificing. I am always blown away how someone will lament that they owe 100k in student loan debt while wearing a new coat from Macy's, holding a Starbucks, with a designer bag in the other arm. I don't judge people's personal choices but debt CAN be paid and it is nice to have it gone and know that the money I make isn't going back into someone else's pocket. Congrats on the reward trip! I rewarded myself by getting a huge drink at Starbucks with whipped cream because before I started tracking my purchases I was a coffee addict and spent seriously thousands a year on coffee, bagels, etc so they were the first to go!!!

  3. You are such an inspirational young woman! A proverbs 31 woman... :) We have no debt, like you I strive to do the very best with all God has blessed us with. My husband makes a modest income, but I put savings first, and we have never gone without. I also give a lot to charity and to those in need. We have a sponsor child and I always help others when I can and He has *always* provides! I will give what I think is a large amount to someone and then before I know it we'll receive unexpected money, or i'll receive a large sewing order, etc... We are so very blessed! Being debt free is worth the hard work and you will feel so free not owing $$! Neither a lender nor a borrower be... ;)

  4. you guys are amazing, well done.

  5. Congrats Amy! Such an accomplishment! Brandon and I have the same philosophy and are slooowly working our way through student loans and car debt. If you don't mind sharing, what is your philosophy as far as retirement savings? I know some advisors recommend paying off all debt before setting aside a retirement account, but we've been going back and forth between paying off all our debt as soon as possible vs. taking a little longer and starting a retirement account as well...

    1. I suppose I should put together a post on the retirement subject one of these days. Essentially, we hope to work as long as we can, but we try to plan for the unexpected. We think it is important to invest in your retirement as early as you can. That said, modest contributions are probably best until the debt is gone. In the long run, retirement accounts will almost never earn interest faster than your loans will. We contribute 5% of our income to a 401k (and some of it is matched by my husband's work). We plan to do more for our retirement after the debt is gone, but we think an early start is essential when it comes to saving for retirement

  6. Amy, I am so proud of you guys! We are so much happier now that we have no debt! SUCH a relief. We sleep so much better at night. And we had just had a car payment and a mortgage (things that people usually feel is ok.) Keep going, you will not be sorry. My hubby if going to start going to seminary this fall and passing for that outright may make it longer before we buy a house again but I love our apartment so much I am totally fine with that.


I love to fellowship with others and hear what they have to say. I would ask, however, that you be mindful of what you write and try to be uplifting and respectful. Thank you for sharing!