Part 3 of a 3-Part Series
My husband and I decided to pay off all of our debt, including our mortgage, as quickly as possible.
We understood it was a huge endeavor and estimated that it would take us about eight years to do, but we knew the feelings of freedom and achievement once we met our goal would be well worth the dedication, sacrifice, and hard work in the end.
As the saying goes, “How do you eat an elephant? One bite at a time.”
We still have a long way to go before we are completely debt free, but in this three-part series, I am taking you through exactly what we did to pay off over $65,000 from August 2013 through June 2014.
Once we created our Debt Snowball and started living by a budget, we cut costs where we could and sold things left and right. We also made sacrifices in other ways.
5. Increased Our Income
I have to give Mike a lot of credit here, too, because he’s the one who works so hard to earn our household income.
He gets up at 4:30am to catch the bus to downtown Portland and then runs or bikes his way to the office to arrive by 6am. And he usually works until 4pm or 5pm on a typical day before taking the long bus ride home in rush hour traffic. There are times when his boss needs someone to work on the weekends or to stay late in the evening, and if we don’t have something already planned, Mike is the first to volunteer.
When his employer needed extra help in an out of state office during a particularly busy season, Mike asked me if he should volunteer. The assignment was for 45 days with the possibility of overtime. If selected, we knew this would be a sacrifice for our young family, but we also thought of it as an opportunity to meet our financial goals even faster.
The volunteer opportunity presented itself on April 1st, and Mike submitted his name. We found out on April 3rd that he was selected and would be flying out on April 7th. It happened so quickly that we didn’t have much time to prepare ourselves, but we believed that it was meant to be.
Our daughter had just turned four-months-old and was changing every day. While he was gone, the kids and I spoke with Mike on FaceTime in the evenings when he was available.
He dedicated himself to working every day of his trip to earn as much overtime as possible, and he was compensated for meals. When his paychecks started coming in, we knew the sacrifices were worth it – he had almost doubled his take-home pay!
He returned home May 21st and finished his workweek. He worked 47 days straight!
We received the last of his overtime paychecks in June and paid as much as we could toward the HELOC.
In eleven months, we reduced our debt by $65,214.94! That’s an average of $5,928.63 per month, which is roughly 20% more than Mike’s normal monthly take-home pay!
We had reduced our total debt by more than 20% and our non-mortgage debt by more than 72%! (I told you I like crunching numbers. ☺)
Just a year and a half after starting our Debt Snowball, we’ve paid off over $76,000 in debt!
As a bit of a site note, we didn’t spend a whole lot of time refinancing. This can be a viable way of paying down debt, but it depends on interest rates and a number of other factors. If you do want to consider this, check out SoFi – they have a nice transparent low-fee low-cost model that’s worth looking at.
This is Our Story. Your Debt Free Story is Possible, too.
That is how we paid off $65,000 of debt in less than a year.
But I don’t tell you all of this to brag about our success.
While it might seem like the stars have aligned for us to pay off our debt quickly, our progress has slowed since June, and the road hasn’t always been easy. We have sacrificed, said no to fun opportunities, and delayed buying some “wants” because they haven’t been in the budget. We haven’t done everything perfectly, but we are determined to stay the course and pay off all of our debt by the time we turn forty.
I tell you all of this to inspire you that getting out of debt, and doing so quickly, is possible. It takes dedication, sacrifice, and hard work.
It means keeping your priorities in order and constantly reminding yourself WHY you are working so hard toward your goal.
Living free from debt is our goal because we believe that doing so will help us achieve our dreams.
Dreams are possible, but we have to make them our reality.
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What About You?
Participate in the conversation. What is one of your dreams that is so big it seems impossible? What can you do today to take one small step toward achieving that dream? Share in the comments below.