Welcome to Our Debt Free Family!
My name is Monica Louie. My goal is to help you take control of your money, so you can pay off debt and work toward true financial freedom.
In less than a year, my husband and I paid off more than $65,000 in debt on a single middle-class income! Our ultimate goal is to pay off all of our debt, including our mortgage, by the time we turn forty – seven years from now.
Doing so will enable us to save even more money for retirement, save for our kids’ college funds, and give more to others in need. When we no longer have any debt payments and we are able to focus on increasing our wealth and helping others, we believe that we will have true financial freedom.
On the blog, I’ll be taking you through the strategies and processes that we have followed in order to take control of our finances, get on a budget, and pay off debt as quickly as possible. I’ll be sharing my money-saving tips and ways to boost income.
My hope is that you will learn from my family’s experience and apply it to your life. If you would like to join us on our journey to debt-free living and learn how to take control of your finances, you can subscribe via RSS or sign up to receive email updates.
I would love to learn from you too! If you have your own solutions for paying off debt and would like to share your story, please visit the Share Your Story page. If you have money-saving tips or creative ways that you have increased your income that you would like to share with the Debt Free Family community, please visit the Submit Your Tips page.
My husband, Mike, and I have been married for five years. We are the proud parents of two energetic, smiley, and loving kids – Jayden (who’s three and a half) and Madelyn (who recently turned one). We have a dog and two cats, which shed incessantly.
I love reading, learning, and listening to podcasts. I work out six days a week and love eating healthy foods, but I also love chocolate and peanut butter, both separately and together.
Mike loves rock climbing, snow boarding, running, and working out. He enjoys cooking and sipping a good cup of coffee while reading tech blogs.
Jayden loves playing pirates, reading books, and making his sister laugh, while Madelyn loves dancing, playing peek-a-boo, and adores her big brother.
Deep in Debt
When Mike and I first started dating in 2006, I was up to my eyeballs in credit card debt. Luckily, I had recently started working at a better paying job and was beginning to get my head above water.
Mike helped me to get organized and prioritize how to pay off my numerous credit cards. Within a couple of years, I paid off my last credit card and vowed never to let my credit card debt get out of control again.
I still had my student loan, though, and Mike had his student loan and a car payment. We held on to those debts when we got married in 2009 because their balances felt too big for us to feasibly pay off at the time.
A Lot More Debt
While planning our wedding, we paid for as many items as we could with cash, but we did put a sizable amount on a credit card. Fortunately, we were smart enough to pay off the balance as quickly as we could, and, within a few months, we had the card paid off again.
When we first got engaged, we thought that we would wait to buy a house until after we had been married for about a year. But with the economic crash of 2008, housing prices were at an all-time low in 2009.
One day Mike was “just looking” online to see how much houses were going for in our area, and he found a beautiful 6-bedroom house at a rock-bottom price. It was a short sale, and there were no other houses with so many amenities and upgrades listed in our price range.
A couple of months before our wedding, we decided to “just take a look,” so we called the realtor and made an appointment to see the house.
It was even more gorgeous in person than it looked online! It was located in a really nice neighborhood within walking distance from the elementary and middle schools, and it even had a neighborhood park just a couple of blocks down the street. It had more than we had ever dreamed of for our first house, and because it was a short sale, the price was right!
We submitted an offer that night, and a couple of weeks before our wedding, we closed on the house!
The problem was that we didn’t have any money for a down payment. We were granted a personal loan at a high interest rate. A few months after we closed on the house, we took out a Home Equity Line of Credit (HELOC) at a lower interest rate in order to pay off the personal loan.
That meant that not only had we just racked up a couple hundred thousand dollars of debt with our mortgage, but we had also added more than $50,000 of debt to our bottom line with the HELOC. We started off our marriage more than $350,000 in debt.
Looking back, though, it seems strange to me that we weren’t even stressed about it. We both had good jobs that paid well. What’s more, we considered ourselves to be pretty frugal. We didn’t travel much. We didn’t buy many luxuries. We didn’t even eat out all that much.
We focused on the upside to buying the house at the bottom of the market. We talked about paying the mortgage off early, but that felt like one day when we were making “a lot more money.” We knew that the economy would recover eventually, and our house would increase in value over time.
Our Debt Caught Up With Us (But Not How You Might Expect)
In late 2010, we were blessed with the pregnancy of our first child. Jayden was born in July 2011, and in anticipation of his arrival, we began to discuss the idea of me being a stay-at-home mom.
My mom raised me as a single parent, and throughout most of my childhood, she worked two jobs. I had always pictured myself being a working mother someday, too. Being a stay-at-home mom wasn’t something that I had ever envisioned for myself until I became pregnant, so we hadn’t planned ahead financially for that to be an option.
But when the reality hit me of how much time my son would have to spend at daycare each week with me working full-time, I realized that I didn’t want to give up so much time with him.
Mike and I listed all of our monthly expenses and realized that his income alone would not be enough to cover everything. Because so much of our money coming in each month was going out for our debt payments, there was no way that I could stop working.
I felt dejected thinking about how I would miss many of my son’s firsts, but there was nothing I could do. I took as much time off for maternity leave as I could and sadly went back to work full-time when Jayden was four months old.
A Little Relief
A few months later, Mike and I discussed the possibility of me working part-time. We crunched the numbers again and saw that we could possibly make that work.
Since my employer did not offer any part-time positions in my department, I submitted a proposal to my boss petitioning to work part-time. Unfortunately, my proposal was rejected, but eventually I worked out a deal to work part-time in my position for a year as a temporary contractor.
By the time my contract ended, my husband had earned a promotion at work and we found out that I was pregnant with our second child.
The increase in income from my husband’s promotion was enough so that we could afford for me to stay home. My last day of work was May 1, 2013. I was able to enjoy the summer and fall with my son, and our daughter, Madelyn, was born in December 2013.
In Need of A Change
It seemed that everything was falling into place, but by June 2013, we realized that we had to be more intentional with our spending. Our checking account balance was decreasing ever so slowly, and we knew that if we didn’t get a handle on our finances, our “cushion,” as we call it, in our checking account would eventually become non-existent.
I began studying personal finance and started listening to the Dave Ramsey show. Dave’s approach with his Baby Steps made sense to me. I realized that getting out of debt would lead not only to financial security but also financial freedom.
I shared what I was learning with Mike and introduced him to Dave Ramsey’s principles. He started listening to the show and became equally excited about getting out of debt.
By August 2013, we had assessed our net worth, created a budget, and started working on our debt snowball.
The Purpose of this Blog
I decided to create this blog after Mike began sharing our progress with his coworkers, graciously giving me credit for getting our finances on track. Last year, one of his coworkers suggested that I should be “the financial planner for the office” and help them all get out of debt.
When Mike told me that, I laughed, but then I realized that that was exactly what I wanted to do!
I scheduled an appointment to meet with Mike’s coworker and her spouse. I have been working with them on a monthly basis since April 2014, and in the first six months of us working together, they have paid off more than $22,000 of debt!
I have since started working with a few more clients – both individuals and couples – whom I have helped with a range of needs. For example, I have helped a young mom organize her finances in order to stretch every penny and a woman in her fifties who is planning to retire in a few years.
I know that there are others who can use the information that I have learned. The blog is a place for me to document my process and provide helpful strategies for saving money and earning more income so that others can take control and find their own financial freedom.
I’ll also be providing monthly updates of our progress as we continue to pay off our debt. As of January 2015, we have paid off over $76,000 in debt, and we’re determined to increase that number to $100,000 by the end of 2015.
If you would like to join us on our journey and learn how to take control of your finances, sign up to receive email updates.
My Contact Info
Get Regular Updates!
Like Our Debt Free Family? Sign up for our free email newsletter.