How we paid off $11,000 in debt in 6 months with a family.
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I can not tell you how many times I read stories similar to mine, with bigger numbers and thinking, that would be impossible for us, we have kids. So many times you read debt stories and they may seem unrelatable because they have children or don’t have the kind of debt you have. I get it, I really do. So let me tell you how we paid off one of our vehicles, $11,000 in 6 months with two kids.
A little background, I work part-time as a nurse and my husband is a welder. We do not make extravagant amounts of money. We do not have a big family to help us with our kids. We also do not sacrifice the chance to make memories with our kids. I am also a somewhat healthy eater, so you won’t hear me talk about eating peanut butter sandwiches all week
We got serious about our why.
We honestly got sick of living the paycheck to paycheck cycle. We sat down and realized we were in worse shape than we wanted to be in. 2 vehicle payments, 2 student loan payments, hospital bills, etc, it was draining. We wanted to travel more, work a little less, and spend time with our little family. My husband and I work totally opposite schedules and we were ready to get serious about our finances so one day we could see each other again! We made the decision to be on the same page because we both wanted to be better financially, not just for our future but for our kids. Debt can create generations of problems if you let it.
Write it all down
We started by simply writing everything down. Every receipt, every bit of money that came in and went out was tracked. This was probably one of the most eye-opening moments for us. We quickly realized that we were spending so much money on things that didn’t necessarily bring us joy. We were eating out A LOT! We were using credit cards every month. We would pay them off each month so we never paid interest, but somehow we had got in this mindset that we could spend whatever on the cards and just pay it off and all was well in the world. So instead of credit card payment, I wrote down what we were putting on the credit cards. Makeup or stupid stuff at Walmart, it all started to add up every month. When we sat and looked, a lot of our spending could be marked unnecessary.
We created a (gulp) budget
We started with a paper budget, but you can do what works for you and your family. I would write down each payday and what bills needed to come out of those pays until all our bills were paid for the month. Then anything left over went to debt.
We used the debt snowball method
If you are not familiar with the debt snowball method, you can read about it and other methods here: https://barbaracaseyfitness.com/debt-snowball-vs-debt-avalanche/
We paid off the small amounts of debt until we reached the Xterra. Then we put all the extra money in a high-interest savings account so the money would grow a little over the next 4 or 5 months. If this is something you are considering, just google high-interest savings and find an institution you trust or check with your bank or credit union. We only earned about $30.00 dollars extra, but people do a lot less for $30.00 so we were fine with it. Once we had the $11,000 we marched to where we had our auto loan and paid it off. *Now if you plan on doing this, please talk to whoever you have your auto loan with, we did have to pay a small fee for paying off early, I think it was like $225.00 or something like that.
5. Do a happy dance!
It was so scary pulling that money and walking into the bank and handing it over, BUT man did it feel good after it was all said and done. Getting a letter in the mail saying the truck was ours was AMAZING.
Some things I want you to keep in mind. Yes, we wanted to pay the truck off as soon as possible so we could move on to the next one, but I also wanted to enjoy life a little. We still had pizza night with our kids, still bought a zoo membership, etc. You have to do what is right for your family. We will be adjusting things a little for this next vehicle payoff, so stick around to see how it goes!
Our next goal: To pay off my Tahoe 17,000 by January 01, 2020….will we reach it?
Thank you so much for reading our story. I hope it inspires you to create your own debt payoff story. Let me know in the comments if you have any questions or comments. I’d love to chat!