May 2010, my husband and I graduated on the same day from our Private Christian University with high hopes and our entire lives ahead of us! I remember feeling so proud of us. There we were, 3 years of marriage already under our belt, and we both accomplished what we set out to accomplish! I got my degree and credential in Elementary Education and he received his degree in Biblical and Theological studies! My plan was to be an elementary teacher, and he was planning to become an Evangelical Pastor. We were set! Well, at least that was our hope. But the next few years of our journey went quite a different direction than either of us had planned. You see, in addition to naively acquiring loads and loads of school-loans, we also graduated right at the end of the recession, when the economy just began to recover.
1. Figuring out how big of a hole we had dug ourselves into! May 2010, we had a total sum of $158,000 in student loans. The reality is, when we graduated we had no clue how much we had taken out. We knew we had a minimum payment that was more than the cost of our rent - a measly $1200. And that was MINUMIM. And at that rate we could get it all paid off in more than 10 years. Awesome! Sure, we could have adjusted our payment plan according to our incomes and had the payment lowered, but ultimately that would mean paying even more for our education. It was either sit in the hole we were in forever or, perhaps, see if there was a way to dig ourselves out of this mess. But HOW?
2. Get jobs and start paying off debt! Precisely 3 weeks after graduation, I landed an excellent job at an industrial supply company paying $43,000 a year. It was outside of my field but it was a job with benefits! We were stoked! Unfortunately for my husband, he wasn’t able to secure full time employment as easily. He finally got a job selling furniture full time for $12 an hour and worked as a youth pastor part time. The weight of our debt was heavy on him and he felt nearly crushed by it. In order to help offset our rent costs, we moved in with my in-laws. We poured every extra penny into our debt. We had a really tight budget, and we stuck to it.
This went on like this for the next few years, throwing any extra pennies into our student loans and hoping it would make a difference. We were both working full time but it really wasn’t cutting it. After 2 years we had paid off $27,000 - which, I will admit, sounds like a ton! But we still had $131,000 left. Our minimum payment was now $1193.72 a month. We had an extra $6 to spend a month - woooohooo! “Don’t spend it all in one place!” Sound advice my great-grandpa would always give. This “progress” towards financial freedom seemed bleek. That’s when everything changed. We were “sick and tired of being sick and tired” as Dave Ramsey always says. That night, we pulled up our credit report and finally wrote down every outstanding loan we had left. We wrote down each loan, where it was from, the interest rate, and the minimum payment required. It actually makes me teary looking at this list. October 23, 2012; That was the date marked in our notes that we began to pay off our debt with intention. We still have it saved as a note in our phones….. this is where the world changed for us. We began to tackle our debt with new enthusiasm and really began our radical journey.
3. Kicking it into high gear! We knew the jobs we had weren’t going to make the progress we really needed, so my husband worked his tail off to land a job as a Deputy Sheriff in Orange County in March 2012. Although completely outside of his field, it was the blessing from God we needed to really dig ourselves out of this mess. I stayed at my job at the industrial supply company and continued to get raises and bonuses. Things were looking up! We started paying $4000 a month towards our loans. OUCH. Some months we would look at our expenses and find a few extra dollars, and my husband wouldn’t hesitate for a second - he threw it into the abyss of student loans. After a while, I told him I didn’t want to know how much we were spending on loans. I couldn’t handle it. All I could imagine was that beautiful brand new car I’d never drive, all the clothes I would never buy, and the lavish vacations to Europe we would never take. We were choosing to deny ourselves those luxuries here and now in hopes of attaining freedom.
4. Budget Life and second jobs. We were making progress, marking “DONE” next to each completed loan. It finally felt like we were making progress! My husband worked overtime at work, I started my own photography business in addition to my full-time job and we threw everything we had into this goal of debt free living. We were using a budget that we created using Gazelle Budget Lite and tacked it to our fridge. Some of the highlight features of this budget tool is it helps you create a budget by categorizing your expenses by percentage. It suggest you should be spending 25% of your income on your housing costs. In Southern California, that is hard to do, but we were committed to this way of life! So we chose to live with family on 2 separate occasions (total of 2 years) to lower our rent costs and we were able to find an independently owned apartment with a low rent cost of $1200 a month for a 2 bedroom. That fit the bill! We also used the app mint.com to help track our every expense, since we would spend independently of one another, this was our best resource to stay on top of it and stay on budget. Every dollar we made had a purpose, and every dollar was categorized in the budget. We kept $3,000 in our savings account, and if we ever had more than that in the bank, that extra was put into loans that month. By 2013, we were making approximately $170,000 (gross income) combined. We had tripled our income from 2010 when we made $50,000. We said it over and over again, there’s no way we could have done this without God’s help. Our jobs were blessings and we knew we didn’t want to squander these gifts we were given to really change the direction of our lives.
5. Dave Ramsey and an attitude adjustment. After 3-1/2 years into this process, we finally discovered Dave Ramsey. Say WHAAAAAA? Ever heard of him? He’s a radio show personality that helps people do exactly what we were doing, getting out of debt! We were well on our way to living debt free at this point, but finding Dave was a breath of fresh air for me. It was what I needed to really get motivated! That probably sounds funny considering all that I’ve shared up until this point. I would describe myself as passively on board with this plan of getting out of debt. I resented the debt, resented the process of spending all of our money on loans and I also hated my trashy car. Honestly if I had a different car I probably would have been a little happier with this process. Sounds a bit superficial now, but my darn 1993 Honda Civic that I bought for $2000 the day after I graduated high school was the worst. I was driving the junkiest car in the parking lot: without AC, chipped black paint, and without a radio. All that when we are making over $150,000 a year? Yeah, you probably get the idea. It was torture... erhmm, I mean humbling.
After discovering Dave Ramsey’s radio show, we were hooked. I would listen to it on my phone every time I drove somewhere. Occasionally I’d hear a couple telling their debt free journey and they would end the call by yelling “We’re debt FREEEEEE!” I would cry every.single.time. I also felt the weight of this burden I’d been carrying around for the past few years. I was tired, worn out, and never wanted to hear the word “debt” ever, ever again. Dave Ramsey introduced us to an app he created called Every Dollar which we preferred to the mint.com app we were using. It's free and helps me track my spending on my phone.
6. Finally Debt Free! That day finally arrived. I’ll never forget it. November 14th, 2014. We paid off our last $10,000 payment and kicked Sallie Mae to the curb. It was exhilarating! We paid off $158,000 in 4 years. Tears well up in my eyes just imagining all the sacrifices, hard work, and determination that went into this dream. I’ve heard it said before that paying off debt is the best marriage therapy out there! HAHA and I really feel like that was true. There was nothing we couldn’t accomplish together if we put our minds to it. The lessons we learned about money along the way have really stuck with us.
We celebrated that weekend with friends with cheap pizza and BYOB on the invite. It was our way of thanking everyone for cheering us on through this process. We got to give our little “WE'RE DEBT FREE” yell and have friends and family cheer us on. It was perfect.
Over the course of those 4 years, our incomes tripled ($50,000-$170,000), we both worked outside of our field, worked overtime, I created my own photography business, and we lived with family for 2 out of the 4 years. I was even able to get a Master's Degree in Teaching which was completely paid for by the company I worked for. Woohoo for more degree without debt!! We had a few neigh sayers throughout the process though. “Oh you’ll always have debt, no need to pay it off now. Enjoy your life while you’re young.” But there is no way we could be living the life we lead now without financial freedom. It’s given us the freedom of choice! I was able to be a stay at home mom and we were able to save up for my husband to attend seminary and pursue his call to serve the church. All of this was possible because of we didn’t have debt. We could live our lives and be crazy and leave our high paying jobs just so we could be poor again ;) We are so thankful for this journey and they lessons we learned along the way. No matter how bad your financial situation is, there is always a way out. Hard work, determination, lots of prayer, and you can have your freedom too!