HOW WE PAID OFF $13,473 IN 11 MONTHS

This article may include partner links. If you click, visit or buy from these links, we will receive a fee or products from the companies mentioned in this post. Please read our disclosure policy for more details.

Before waking up from our debt nightmare, we were ordinary folks. Getting paychecks and spending like we were the government. Not using cash and putting everything on plastic.

It didn’t take long to realize how deep we really got in debt, even after having gone through a Chapter 7 BK in 2010; to sadly in just a span of 7 years be back to being 50K in the hole from consumer debt minus the student loans.

Nothing like writing down your debts in black and white and seeing it firsthand, to give you a sense of awe, wrath, and serious gut check all at the same time… to make us mad, me first, and then making sure my wife got mad with me too.

We were just spending more than what we were making, we didn’t care that we were broke, so by the time we realized it, we were $125K in the hole… GGGRRRRRR

I decided to go back to listening to Dave Ramsey, which was what I did way back in 2008.

Back then, the get out of debt principles really didn’t resonate a whole lot since my ego got in the way, and I assumed wrongly that I’d be making good money the rest of my working life and out-earn my stupidity.

By finally having a handle on our numbers, we were finally able to work out a budget and plan for chipping away at the monumental number, one dollar at a time.

So to track our money, we use Personal Capital . It has a very detailed dashboard, it’s easy to use, and even has a feature that synchs with most financial investment companies to track 401K or similar retirement accounts.

It’s a one stop shop for seeing all your debts and assets in one place. And did I mention it’s easy to use too 🙂

Along with the realization of how broke we were, and how huge our debt hole was, we finally sat down and figured out a plan on where we want our money to go.

Our budget tool of choice is EveryDollar the free version. It’s just convenient and easy to use. You can download the app and have it both on the computer and your phone to be able to tweak it in both places as needed.

By finally doing a budget, we now intentionally assign our dollars towards going to our debt, living expense, necessities; and more importantly, we now know where the money is going versus how it vanished.

The only issue we have now is sticking to our budget, tweaking it monthly and working on numbers.

By doing it for almost a year now, we now have a comfortable place with our numbers; so it’s only a matter of optimizing and being consistent, so we can meet our goal faster. We shall see.

I worked an IT side gig and my wife who’s a full time stay at home Mom also pitched in by having a nanny gig, which both netted us almost $4k last year, going mostly toward our debts.

This year we expect to make double that and if I can manage a Real Estate closing this year, can expect to earn an extra $5K that would be huge toward our payoff.

It’s just a matter of consistently working our side gigs and pouring all of that towards our debt, to be in a much better shape by next year.

A 2015 report indicates that 80%, or eight out of ten taxpayers get refunds. And it’s mainly because they had too much withheld from their paychecks every month to begin with.

The same report stated that: “a refund is nothing more than an interest-free loan to the government, and that tax filers would be better off if they'd had the money during the year to invest or pay off debt”, which is what we did.

I tweaked my W4 to enable me to keep more of my monthly income to be able to use most of it toward paying down our debts.

There’s an IRS withholding calculator site that shows you exactly how much taxes you’ll owe so you don’t overpay.

By figuring out how much you’ll pay in taxes beforehand, and being able to withhold only that amount, enables you to use the extra money for whatever you need, instead of having the government keep it and then filing a return to get it back.

Before this journey, we were mindless spenders. We needlessly spent on stuff “we didn’t need, to impress people we didn’t know, with money we didn’t’ have”. Yes the cliché described us big time.

Fast forward a year, now we are more mindful of how we spend our money, time and energy.

Our old disease of “stuff-itis” was cured, and we now have a better understanding of where our happiness and joy really comes from, and it wasn’t from stuff.

We’re even teaching our teenager to spend wisely and indoctrinating her on the merits of being a wise financial steward; to make sure she doesn’t end up like us in her adult years.

By being mindful of how we spend, especially with time, since work is essentially trading money for time, our goal is to be debt free as fast as we can so we won’t have to work as much to be able to spend quality time doing the things we love with the people we love.

It all boils down to not having to worry about making payments for debts that basically steal our time.

By not dwelling on past mistakes but learning from them; and embracing the current journey with an enthusiastic and hopeful outlook, we can turn a seemingly bad experience into a positive life-giving lesson, that can in turn be a platform for us to mentor other people who are going through, will go through or would be making bad financial choices, that by looking at our journey, they’d see that they don’t have to make the mistakes we already made.

There’s always hope that financial peace can be achieved from any stage in life if we just make right choices and understand consequences of our actions.

Do you have other tips that have helped you get out of debt? Please do share by leaving us a comment below or emailing at thedebtfreejourney@gmail.com.

Until our next post…

Peace and Blessing to you All.