$30K to $0: How We Became Debt-Free in One Year

I really enjoyed reading your story! My husband and I have been married for three years, and we are still in debt, but we are making a lot of progress. We, too, sat down before we got married and made a plan to be debt free. He had just bought a truck, which he loves and needs, and was paying a very large bill each month. He also had student loans. I had student loans as well, but my car was paid off. We bought a house because the market was very good at that time, and we felt it was neccessary to accomidate our future family. Right before we had our first child, we paid off the truck and less than a month later, my car broke down (for good…it was old). All kinds of chaos seemed to happen like that over the past three years (my husband ruptured a disk and was off work, our roof practically blew off in a storm one winter…). I’m happy to say that right now, even living off of his income, we have NO car payments (we still have the truck and my car), our savings account holds one months living expenses, and we are almost done paying off his student loan. We have a good percentage of our house paid off so we’ll have good equity once the market gets better! We have no credit card debt and are living within our means. If we could do it all over again, we would have saved my income (when I was working full-time) and we would probably have little or no debt right now. That’s a lesson learned. I’m pleased with how far we’ve come and we’re stronger because of it!

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thanks for the encouragement - Doug and Rachel. It can be done!

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How did you manage to plan a wedding and not incure more debt there? Curious to know for my daughter.

As someone who’s about to get married to a wonderful guy with 15K in student loans, this was incredibly encouraging. I love that you see marriage as what it is - two becoming one - and that you worked together to pay off the debt. Thanks for sharing!

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My boyfriend and I live together and have our finances meshed and it drives me buggy. He is very frivolous, and I as a single mom have learned to be very penny pinching and he, having always been just him…not so much, he eats breakfast and lunch out, happy hour once a week…and lunches out are in sit down restaurants requiring tip, it’s about $100 a week he spends.

The last three years were sort of carefree and I was hoping he would slowly become more responsible…very foolish of me…but now I’m worried that he’ll never grow up with regard to money.

However, lately I have taken steps to let him know that financial responsibility is also important for him…I told him a few days ago I was going to separate our money and open a different account if he didn’t start controlling himself…there’s only so much reminding I’m willing to do…and he seems to have gotten the picture.

We shall see…great post!

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Your story is so fabulous! So many people see debt as a way of life - “It’s always going to be there.” I love how you two were so unified in the decisions and the work to get it done. Congratulations!

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At one time we were debt free except for our house. Circumstances have changed somewhat since then and we are no longer debt free, but it is always our goal. I am very thankful that my husband and I are on the same page with finances. We are both very good at not spending.

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We’re working on doing this - thanks for sharing your story it is encouraging to read that someone else was able to do it while you’re in the middle of trying!

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You guys rock! We don’t have debt but honey has a second job for 6 months so we can chalk away some major money for a move oversees. At first it’s hard to say no to things you want, but with a little practice, it is sort of empowering, isn’t it?!
Thanks for sharing your story!

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My partner and I started married life very similarly. We chose to pay off his debt in cash savings I had, and since then have been following a very good piece of advice you have up there: we put all the money he earns directly into our savings account. He’s going to stay how with our kids (when we have them) but we’re alread used to living on my income alone.

Thanks for sharing!

Awesome! We had $35K we paid off in 2 years using some of the same methods.

The best piece of wedding advice we ever received was to live on one income from the beginning. Now look–I’m able to school th e children at home! What a blessing.

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Great work! We started marriage with nearly $200K in student loans! Thankfully we have it almost all paid off now. That is mostly because we DID buy a house though. We were fortunate enough to buy about 5 years ago and when we sold the place 18 months later we made enough to pay down a hefty chunk of student loans. Praise God! Of course in this economic climate that won’t be happening again…

Thanks for the post!

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What an inspiring story! Thank you for sharing it with us.

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Wonderful story. I brought a 1,000€ loan to our relationship, and that was it for both of us, no student or credit card debt. Since is a government given loan (you get interest free loans if you’re a student purchasing a new computer) we’ve decided to keep the stipulated payments instead of paying it off early. If we ever have extra money on top of our emergency fund we may reconsider, but until then this is it.
However, I hear Doug on “feeling that money that is not yours…”. When we bought our furniture and appliances, we used some of Eric’s savings instead of paying with a credit card.

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What an encouragement this post is! I love that you two treated the debt as debt - no matter where it came from. School debt is still debt. There is no such thing as good debt.

Thanks for Sharing!

Dana

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That was so fun to read! Thanks for sharing your story; it is so good to know others have been through it and have come out the other side! Sometimes it feels like we’re treading water, but I know we’ll get there eventually.

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Our story is a lot like yours except the roles are reversed. I was the one that came with a lot of debt and am not the best financial manager. My husband, on the other hand, seems to be a whiz at it. Working together we have cleared quite a bit of my debt, leaving mainly student loans, while saving money and paying for our wedding. Like yourself, we chose a small wedding and paid for it mostly with some savings and my Christmas bonus.

Thanks for sharing your story!

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We’re in a different situation. We’re older, so our student loans were paid off a while ago. We’ve mostly lived debt-free (other than the mortgage) until recently and it’s very stressful. I have a plan laid out to be caught up by the end of 2008, which feels great, but . . . we still won’t have a lot left over each month.

I love the idea of living on one salary, even with both working; that inspires me!

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Love this, Rachel! I’m sure you’ve inspired so many people to do this, and that it CAN be done. So many people just assume debt has to be a way of life, that it will never go away. What a bondage to carry that around for so long. How freeing it is to be a debt-free.

That is fantastic. We are currently working our way out of student loan debt, ourselves. I am a SAHM, so it is going a bit slower with one income, but we are closing in on it within the next year or two.

I wanted to thank you for your no spend month series. I just found your blog this week and perused the archives :). I have wanted to do that for a while, but with a new baby I put it on hold. I was re-inspired reading your series and have started one of my own if you are interested:

http://dailyreforming.blogspot.com/2008/10/introducing-no-spend-months.html

I am so happy to have found your blog and your description is perfect - a very encouraging blog.

Blessings,
Mrs. S

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30k in a year is amazing! Congrats!

Your story reminds me so much of my own. I married debt, too, and we have had our finances combined since we started living together almost 4 years ago.

At the end of the month we will have paid off everything except for his student loans and our condo, which we have to pay PMI on since we have less that 20% equity. Our goal is to get out from under PMI by my birthday next September. The interest rate is so low on the Student Loans that it doesn’t make sense to pay them off early.

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Thanks so much for sharing your story. We are working our plan to be debt free, and expect to be there in about 19 months. I’m inspired by your story, and encouraged to stay the course.

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I’m so glad you are spreading the word about how wonderful it is to be debt free. As a young girl I had every credit card available. I learned the hard way but now if it’s not in the bank i can’t afford it, what ever it is. I love seeing my nest egg grow and not having to worry about bills
PARENTS!! TEACH YOUR CHILDREN ABOUT MONEY!!!

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We too are just about to be debt free. There is a light at the end of the tunnel!!

Living frugal was not an option at first. After we married and moved, I didn’t have a job. So we were living off of a “straight out of college income” and made a decision before we married to STOP using credit cards. If we didn’t have money in the bank, we didn’t buy it. (Thank goodness for Wal-Mart gift cards at the wedding!)

After about a year, when our financial situation was 100x better, our frugal habits were just that…. HABITS. Our spending habits stayed the same, even though our income increased.

Now we have the choice to live differently, but I still shop garage sales, craigslist, resale…. and very seldom pay full price for anything that isn’t grocery items.

I’m in control of my money, and am not slave to the monthly payments!!!

Southern Gal - Small Budgeted weddings are the best. Be creative, make a list of priorities, and recruit friends and families to help with everything (food, cake, flowers, pictures, dresses, etc)

Great post! It takes a lot of work and sacrifice to pull yourself out of debt like that. I’ve always despised debt, and only now have my first loan. It freaks me out to have it (it’s a car loan, and I’m planning on paying it off as early as possible), but I think I’ll be ok. Although I think I spend too much and need to cut back, I ALWAYS pay off my credit cards as soon as the bill comes in. And I always have. I still use the cards, but I don’t buy things if I know we don’t have the money in the bank. Your post reminds me, though, that there is more I can do to get myself back on track!

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I love how you wrote this together, and your story is very inspiring! We also live on one salary, so that one of our paychecks goes pretty much directly to savings…and if something would happen to one of our jobs, we wouldn’t be immediately in financial stress. I want to go part time or stay home at some point, and the money we are putting away now will help us reach that goal as well. You are setting an excellent example for your children, congratulations!

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It can be done when you make it your main focus and priority. Life is so much easier knowing that I don’t owe anybody and in a pinch I can live in the car that I own. Not that it would be comfortable for two people and two cats to live in a Corolla.

I’ve been married for about a month, but it was my husband who married debt. While he’s the one with the savings and the 401K, I’m the one with a negative net worth. I wish that he would commit to saving more with me (we’ll get take out fairly often as he “makes money and wants to treat us”), but I also realize that I made the mess and I should be the one to get us out of it. Thankfully, with his savings we can realize the dream of home ownership in the next year or two, & I can continue to put my money towards my credit card debt. Thanks for this post and for giving me the “I’m OK/ We’re OK” feeling.

Something about having kids made it more difficult to go without. Just before having our first child, hubby graduated from law school with $65k loans (and then joined the Navy). Shortly after we had our 3rd child, we bought the $20,000 minivan. It seems we have a hard time paying it all down quicker. We are not adding to our debt (no credit cards), but we are only slowly decreasing it.

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rachel,
thank you for your comment on my intial post for my “no spend two weeks…” for my sociology project. you are right, many of the things i wanted to buy then…yeah, i can’t even remember them. i made it through two weeks and i’m on to conquer the rest of the year. and our debt too, thanks to this post. thanks for your thoughts and encouragement. i finished my project yesterday if you want to check out my final post
thanks again, have a great week!
carly

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You forgot the best piece of advice - cut up your credit cards and never use them again.

As a marriage consultant, the biggest stress that I often hear in people’s marriages is from the anxiety around money and bills. It sounds like you’ve done a great job to get rid of that angst. I hope it continues through these hard times.

And in my personal life, my husband has just retired. He has always thought that I spent too much money on food and eating out. He’s taken over the grocery buying and the cooking. I think I have died and gone to heaven and he’s as happy as can be that our grocery bills have been cut by 1/3!!!! Yes, that makes this wife happy!

That’s great. Congratulations if that was your goal. But from a purely financial point of view, selling stock to pay off debt may or may not be the right decision. Of course these days it looks like a home run! But you have to look at the rate of return vs. the interest on the debt, as I’m sure you know.