We are normal people that were in a very normal situation. Six months into our marriage in 2011 we were $107K in debt. 33 months later we were debt free. That’s right, less than 3 years we paid off $107K! How was this possible since we didn’t win the lotto, have a large inheritance or an income in the top 2%?
How it all began?
Coming into marriage Kevin brought in $10K of credit card debt and $63K of student loans. Erin was getting a second degree in accounting and would have about $30K of student loan debt as well when finished. A few months after getting married we also took on a car loan for $14K.
The first 6 months of our marriage we cleaned up the credit card debt using money that Erin had previously saved. One can see how these decisions and behavior have a way of catching up with you. When we finally added up our debt we saw that we had $107K of debt that was looming out there.
In the meantime, we were getting lots of questions about when we were going to buy a house, have kids, would someone stay home with the kids, etc. These things seemed impossible with this debt. We had over $1,100 in minimum payments each month.
If we were to overcome this we had to work together.
Erin was a natural saver. Growing up she would worry about whether the people she cared about had enough money. While she decided to take out student loans for a second degree in Accounting she still worked 30 hours a week while going to school full time. She worked hard to minimize her school and living expenses and saved up to buy items that she wanted. She even found ways to start a 401K and invest in the market.
As far as Kevin was concerned she was not normal but a great influence on him as he desired change.
Kevin was normal and a natural spender. Growing up he managed to save up for items that he wanted but by the time he went to school he made the mistake of assuming his credit card was an extension of his bank account. As he accumulated student loans a few more purchases on the credit cards wouldn’t hurt much.
He graduated in 2008 with his Masters in Architecture. The industry took a major hit after the housing bubble and the infamous great recession. His experience of getting a job and then losing it less than a year later contributed to feeling like he would never get ahead and that debt was just a way of life. He was fortunate though to never have a period of more than 6 weeks without work but it was a rocky few years full of uncertainty.
His life changed in 2010 when he met Erin after church and realized that he was seeking happiness in all the wrong places. He wanted to be successful with money but until he had to be accountable to Erin it just hadn’t happened.
While Kevin and Erin were dating Kevin randomly came across the Dave Ramsey radio show. Listening to the show caused a mix of emotions for him. He heard stories from people who seemed to be worse off and stories of success that turned him off. After repeatedly listening to the show though he realized that everyone who called in was the same. They were just at different points in their journey and that he had the potential to make the changes necessary to have success.
As Erin was a natural saver he felt that if they worked together they could have the success he heard about on the show. One day Kevin said let’s make this a priority and Erin was on board. They sat down, added up their debt, looked at their budget and saw that they could be debt free in 5 years. They deployed the Debt Snowball method and focused on paying off their smallest loan first. In month 2 of their journey they paid off their first loan. What a relief that was! If felt so great to get rid of one of our many minimum payments.
To be successful we had to make changes. It didn’t matter to us who brought in what debt or who was previously better with money. All that mattered was what we did going forward and that we each took ownership of our behavior to be accountable to each other. It was a fresh start for both of us.
We decided to eat out no more than two meals a week, we cut cable, we cut our phone bill and we cut entertainment among other items. We analyzed each decision to decide if what we wanted helped us hit our goal. While it might sound as though we didn’t allow ourselves to have fun that couldn’t be further from the truth. We found the value in our decisions and our lives were better for it.
Additionally, we kept a monthly budget and tracked our expenses to keep us on track. We created monthly goals such as hitting certain thresholds or outright paying off a loan to keep us engaged and reaching further each month.
While our initial projections suggested we would be done in 5 years the result of pushing harder and harder each month meant that we completed our debt payoff in less than 3 years. In fact, we were debt free in 33 months!
This experience was transformative for us. In addition to being debt free we realized that we could now achieve our other goals. We were able to quickly save up a 3-6-month emergency fund and then save for a down payment on a house. During that time, we were putting 15% of our income into retirement.
We welcomed our first son in August of 2015. In 2017 Erin quit her job in time for our second son born in September of 2017.
Paying off this debt made these other items possible and gave us the belief that nothing was too difficult financially.
Debt Free Happens
In 2017 we started Debt Free Happens to inspire and motivate others to help them get out of debt and jumpstart their financial success. We believe that you too can be successful with your finances. We will both share what we’ve learned and the lessons we are continuing to learn every day.
Our goal is to create a community and help encourage others on their own personal journey. Whether you have already begun paying off debt or haven’t started we hope to provide inspiration and support.