I have a special treat for you today! You have all heard my family’s story of paying off debt (you probably watched it unfold here on the blog), but I’m excited to bring you a fresh perspective from a reader who also paid off loads of debt! I am always inspired to hear other stories of dedication to pay off debt. If you’d like to share your debt payoff success story, you can learn about the submission process here. Without further ado, here’s Krystal from LittleLightonaHill.com.
Growing up, I was blessed enough to have parents that sat me down and taught me financial sense. As a teenager, I remember sitting down at the kitchen table with my dad so he could show me how to budget, track my spending, and warn me of the dangers of using too much credit.
From the beginning, my husband and I started our marriage on the same page about finances. We balanced our checkbook regularly and never used credit to purchase vacations, fancy clothes, or other frivolous purchases.
Even so, we came to a place where even our “good debt” was bogging us down every single month! We had two car payments, a small amount charged on a credit card, medical bills, and school loans. A LOT of school loans! Grad school ain’t cheap, people!!
Together, we sat down and realized that our combined debt payments were literally half of our monthly take-home pay. In a nutshell, we were so tired of working hard every day in order to use half of our check to pay off debt, and the other half to pay our bills. And by “pay our bills” I mean “mail in the checks to cover the bills and pray that none of them bounced.”
We had two small girls, two decent jobs, a teeny tiny rancher that was “ours,” but no peace. Checking the mailbox became a daily moment of stress. One where I would hope and pray that no bills were lurking to catch us by surprise.
Finally we realized enough was enough, and it was time to make a change.
For the past four years, we have been diligently putting any extra money we could find straight to pay off every dime we owe. Little by little, we have paid off over $80,000 of debt! When we first started our debt-free journey, we only had a few dollars extra to put towards extra payments. But as we knocked out loan after loan, our “extra” amount for debt pay-off increased until we were paying hundreds extra each month!
I truly believe that we go through certain experiences in life in order to help others who may be going through the same things. If you are in the middle of paying off your own debt, let me tell you it is SO worth it!! One day you will reap the rewards for your own financial diligence. Until then, here are five lessons we learned that will hopefully help you on your financial journey.
1 – Money problems start with the person in the mirror!
It was really easy to blame all of our debt on our low income. But if I’m being honest, we weren’t intentional with our finances. If you can’t manage money well on a small income, you won’t manage money well on a larger income. We had to buckle down and manage our money, no matter how small our checks were that month! With just a little bit of focus it seemed like we had more and more money each month. In reality, our income never changed. Only how we used it!
2 – Find contentment with what you already have.
We learned to stop mindlessly window shopping. We rarely went to the store to just “pick something up.” Instead of buying things we wanted, we only bought things we needed. And we truly began to appreciate all of the things we already had. We reused things, got creative with repurposing things, and focused on making memories instead of collecting more stuff. All of that allowed us to keep more in our pocket to chunk away at our debt.
3 – Be generous with others and find joy in giving freely.
By paying off debt after debt, we were freeing up more of our income each month. This allowed US to choose where we wanted the money to go. Obviously most months we paid extra on our payments. But having the freedom to use our money to help others in need was truly life-changing for us. For so long, we were the ones on the receiving end. So many of our friends and family stepped in to help when we were in need. To be able to return the favor was such an amazing feeling! It gave us even more passion to be debt free and use our income as a blessing to others.
4 – Be intentional about hosting and entertaining.
While we were living on such a tight budget, we rarely splurged on things like eating out or catching a movie with friends. Our long-term goal meant more to us than a good time for just that moment. But we learned very quickly that living the life of a hermit is no fun for anyone! We started having our friends over for dinner and were very intentional about fostering friendships and community. By intentionally hosting other couples for dinner, our lives were so rich with some amazing relationships. And we learned very quickly what truly matters in life. Many of these dinner parties led to life-long friendships that still play a huge role in our lives.
5 – A budget isn’t restricting – it’s actually SO freeing!
We stopped looking at a budget as the “bad guy” that tells us all the things we can’t do. Instead, we learned a budget gives us more control of our money. And allows us to spend on things we want and need while also making sure there is enough left over to meet our financial goals. Budgeting was our best friend while we paid off our debt, and is truly the number one thing that helped us pay off over $80,000 in four years.
These five lessons have changed the way we look at money. Hopefully they will help you, too. Remember, paying off your debt doesn’t have to be all drudgery and no play.
How about you?
- What is one thing you have learned while paying off debt?
Krystal is a teacher turned homeschooling mama of two. Recently becoming debt-free herself, she is passionate about inspiring others in their debt-free journeys. You can follow along as she blogs about faith, family, and finance at Little Light on a Hill. (www.LittleLightonaHill.com)
Wow – $80,000 is a lot to pay off in 4 years? We are living on one income too and still have about $69,000 left to pay, and it has been challenging on one income. I’m trying to do the math in my head and figure out how you made traction when 50% of your income was already going toward debt – did you increase your income? Lower your expenses more than they already were?
Hi Jenni! It’s actually a very long story. I wrote a series outlining most of theses things on my blog. Basically, we started our marriage making no money. A few years into marriage I finally got my degree, pursued a career, and made more money. But with that degree and a higher income came student loans up the wazoo. We were VERY intentional with every dime. We sacrificed a lot, said no a lot, and cooked from scratch a lot!! The past two years my husband has been working in a sales job, where he has the potential to earn bonuses. Usually he doesn’t, but when he did we put every penny straight towards debt. We also used every tax return, I picked up a second job to quicken the process, and I worked my butt off this summer (I’m a teacher so I had my summers free) to make a big dent in the total. The thing that gave us the most momentum was the Debt Snowball made famous by Dave Ramsey. Every time we paid off a loan, that much money was freed up each month to go towards the next debt. By the end of our journey we were literally chunking half of our income into that last huge debt. Feel free to read our story on the blog, or reach out if you would like advice. 🙂 Start where you are, and you’ll make progress!
Love this! I came from a family that wasn’t rich, however we were comfortable. Took many trips. Never went without etc. My husband came from very little. When we got married those realties collided. He had student debt, I didn’t. I had a brand new car his caught fire in a parking lot etc. We have made some hard decisions over the years. I’ve learned curb my spending and we make smart decisions with our money. We relized that it’s ok to buy older used cars with cash. We now have no car payments. One year we got a really large income as cheque and decided to put it towards his student loan instead of a trip or upgrades. We through in more money from our savings to pay it off completely. 6 months later we moved to a different city where housing is double and we didn’t get a pay increase. Because we had no other debt at all and a great credit score we are able to get a larger mortage with no issues.
We always remember to tithe too. He give God his portion first and then us. That makes a huge difference.
Hi Luisa, We had the opposite story! My husband was always well off and comfortable with finances growing up, while my family was super frugal and I remember money being very tight. It’s funny how God knew we would be the perfect match to balance out our financial tendencies. And I agree with you 100% about tithing. Something about giving to others put purpose in our penny pinching and made the tight months seem worth it. We hope to pay cash on our next car purchase, and will definitely be buying a car about three years old. New enough that there shouldn’t be a ton of issues, but old enough that we won’t be buying a car that will depreciate so much in value that first year. Way to go on learning these lessons and paying off your debt, enabling you to be in such a good position for your move! Thanks for sharing your story. It was great to “meet” you! 🙂
Thank you for sharing your story. We are also deep in student loan debt. All I want when we are debt free is a vacation – just like “normal” people.
Student loan debt accounted for about 70% of our debt. We were so excited to be rid of them! Ironically, we took a vacation after we paid off our debt. But we stayed with family, drove instead of flew, and still stuck to a budget. haha I guess the frugal habits are a part of our life now. “Normal” people don’t know what peace they are truly missing. 🙂
Thanks Krystal! I am SO looking forward to the day when we are in the debt-free camp. Lesson #1 is so very true. I have friends that make two or three times what our take-home is, and yet they complain of feeling stuck and under-funded. Lesson #2 is one I have to remind myself of quite often. I dream of the days when we can buy cute Christmas towels and have a home to hang them in. For now though, I am learning to take care of what we have instead of focusing on what we don’t have. We do truly have a lot, and it would be a waste not to enjoy it.
Thanks again Krystal, I’ll be checking out your blog!
Hi Ashley! Being content with where you are for right now is half the battle. It sounds like you are well on your way to financial freedom already! I promise, one day you will look back on all of the lessons YOU learned while paying off debt and will be so grateful for it!!
What an honor it is to share a small part of our story with your readers, Stephanie. Thanks so much for letting me guest post today!