The following is a guest post by a dear friend of the family. Lynne Patti is a mother, homeschooler, wife, and amateur blogger. She lives in Los Angeles, CA with her 3 kids and husband.
It was 2008. We had been married for 4 years and had a one year old daughter.
And we were in debt. A lot of debt.
At one point, my husband calculated that all of our debt combined was $90,000. We tried to avoid using our credit cards as much as possible, but things would just pop up. Things like moving expenses, flights back east to visit family, and the occasional (read: frequent) meals out. The really bad part was just 4 years before, we had been in debt to credit cards $20,000 and had paid them off! This $90,000 was an entirely new set of debt. Ouch.
We had heard some friends (On Target Coach and his sweet wife) talk about Dave Ramsey’s Financial Peace University course and decided to sign up for the next session they were hosting. We signed right up (because deep down we knew it was baaaad). We got there for that first class, pencils and workbooks in hand and smugly settled in to do some light reflection and learn about budgeting. Maybe learn how to become millionaires next week…boy were we in for it!
Taking the First Steps
Toward the end of that first month and after drinking the Dave Ramsey Kool-aid, we made a decision to cut up all our credit cards. Yup, all of them. The funny thing is, when you don’t have a credit card handy at a store? You won’t use it. Funny, huh? After the Epic Cutting of the Cards, we somehow stowed away $1000 into an emergency fund. And then the Great Long Haul started. That is: paying off debt.
I clearly remember Ramsey saying that most couples will be able to pay down their debt (using his Debt Snowball procedure) in an average of 18-24 months. I also clearly remember saying “We will literally never get this debt paid off in 24 months. Uh-uh, no way.”
But we worked and worked and my husband kept the faith for me when I despaired. A friend gave me a ton of old text books which I started selling on Amazon for a couple of bucks profit per book. I ended up making about $5500 in about 4-5 months and paid off one credit card. But it felt so good! My husband’s income was going for all the essentials, the “four walls” Ramsey talks about. I was teaching piano and much of my piano money would go toward paying something down.
A Tight Spot: Debt Free Journey
In May of 2009, we found ourselves in a really tight spot. Namely, no money. At all. Ninety six cents sat in our checking account on May 1st when rent was due. We knew we would get a payment from my husband’s work on the 15th. He is self-employed and has irregular income. No steady checks for us! That left two weeks in which we were supposed to somehow pay rent, eat, and pay utilities-all without a credit card. It was a very humbling time.
We had to call our landlords and ask for an extension on our rent which they graciously gave us. I signed up for LA’s ReUseIt community where material items are exchanged among the community rather than buying new. But by May 14th, we were down to nothing in the fridge.
I knew that I must maintain a cheerful attitude for fear that if I didn’t, I would crumble. I got out our jar full of coins and counted out about 6 dollars in change. I took our daughter, Emma (19 months old) to the grocery store and managed to buy generic brand Cheerios, a pint of strawberries and a half gallon of milk. This would have to do!
When I got home, I heard from a friend (she knew what we were going through) who said she was going to drop off some fruit and diapers for us. I was ecstatic! What a blessing! Although I nearly fell to the floor when she showed up about an hour later, not with just fruit and diapers, but with fruit, diapers, and about $300 worth of groceries. No generic stuff here, everything she had bought was name brand. We were floored. This debt free journey had turned out to be WAY more than we expected.
Oh, and the ninety six cents in checking? Stayed there for 15 days. No “whoops!” overdrafts and no using our debit card. Miraculous really.
By the end of 2009, we had gone through the hardest year of our marriage yet, but we had almost paid off our credit cards. Now it was on to paying off our car and our student loans. Oh yes, student loans. Debt doesn’t stop at credit cards and cars.
Becoming a Debt Free Family
By 2010, we were a bit obsessive about not having debt.Sometimes, I would even tell the cashier at Target or Kohl’s,
“Nope, I don’t want a credit card…we are a debt free family.”
Self-righteous? Maybe a bit, but it helped focus me and put our family’s goals first. Halfway through the year, our second child was born, a son, Noah whose name appropriately means Peace. My husband’s company began doing very well in sales and around December of 2010, we sent our last lump sum payment to Toyota Financial, paying off our car.
The next month, January 2011, we sent our last payments off to our student loans and (GULP) we were officially debt free. It took exactly 24 months to shave away at our debt.
We then kept right on going, completing our emergency fund and starting to save for a down payment for a house. In June of 2012 (with a third baby at 3 months old), we bought our dream house. We didn’t buy it with 100% cash, I mean, we live in LA-come on!!!
We were able to put down a good down payment, securing both a great interest rate and a great loan. When we were signing THE STACK (and by stack I mean 10 inches of paper piled up) of papers to close escrow on the house, there was one section where it was supposed to list our liabilities.
The woman guiding us through all the signing looked at the blank space and then up at us. “You don’t have any debt? No liabilities? I’ve never seen that before.” My husband and I looked at each other, chuckled, then shook our heads “no” as we both remembered buying groceries with coins, selling books, doing a yard sale, and trying to paint a baby nursery for under $4 dollars.
I won’t for one second say that our debt free journey has been easy. But I will say that all that work we put in combined with the support of many loving, caring, praying friends was totally worth it. Our marriage is stronger, our children are more secure, and we are able to give so much more to those who need it more than us.
Your Turn to Become Debt Free
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