Today I wanted to share with you some things we did to eliminate all our debt, not including the mortgage. We’ve been debt free since 2016 and it took us 6 years to get rid of the thing. Everyone’s situation is different. Some people may take months, years, or even decades to be debt free. But the main thing is to stay focused and disciplined. Our money should go where we want it to go.
First of all, I hate debt. The reason being is because I’ve seen it do harm to people near and dear to me. Now don’t get me wrong, we have a part to play in it as well. We should not finance entertainment sets or buy luxury vehicles we can’t afford. It’s so easy to get into debt, yet so hard to get out. So I’ve made up my mind to pursue a lifestyle of very low/no debt. It is possible and we can pursue this journey together.
Here are the top 5 things we did that helped us achieve our goal of being debt independent.
We tithed and gave
You may be asking, what do you mean? Are you telling me that you gave your money while trying to get out of debt? Yes, we did. Not out of obligation, but because we willingly wanted to. We are of the Christian faith and we believe that the first 10% of our income is for the Lord. This includes our business income and monetary gifts. We also give to bless others. It feels so good to do this. Having a giving spirit changes you on the inside. We’ve also seen God protect our finances as we gave. We’ve been through hurricanes, went to emergency rooms, had unexpected things come up, but God always came through.
One gives freely, yet grows all the richer; another withholds what he should give, and only suffers want. Whoever brings blessing will be enriched, and one who waters will himself be watered. Proverbs 11:24-25
We spent less than we earned
At first, we were so loose with our money as we paid off some of our debt. Once we paid all of our bills, we actually had money left over. So what did we do with most of it? We went out to eat for breakfast and lunch while the fridge was full of food. We bought clothes that were only worn for a season. We didn’t have a written budget nor a plan. Changes were made once we had kids and we wrote a detailed household budget and annual goal. After every dollar was accounted for, including maximizing our savings, we went a bit further by paying less on items that aren’t important or gets used and consumed frequently. I used coupons, bought clothes from the thrift store, canceled our gym membership, downgraded our cable package, and switched to pre-paid phone plans. Though we are debt free, we still live this way.
DIY’ed or paid in cash
If you are barely making it by, I wouldn’t suggest taking on any projects. I would wait. But if you were like us some years back and want to do some small updates, you can find so many resources on how to fix, build, construct things. But please take note, don’t DIY anything that can cause harm or safety concerns to you, your family, and investments. With that being said, my husband and I would never tackle major electrical issues or foundation work in the house.
What we have tackled were simple things like painting, patching drywall and woodwork projects. We’ve made mistakes while doing them, but learned from it. If a home project is too difficult, have several contractors give you an estimate. Do your research on the company. Check reviews from the many sources available. Once you hire them for the job, pay by check/debit. We will not finance a home project. Remember some home updates or remodeling projects can be claimed on your taxes or lowers your home insurance.
We made temporary sacrifices
Maybe you’ve heard of Dave Ramsey who knows a thing or two about personal finance. One of his famous lines that have stuck with me is, “Live like no one else, so later you can live like no one else.” That’s exactly what we did. Many times we had to say no. We had to say no to vacations every year, no to many events, just plain no. We decided to use that potential vacation money to pay down our debt. Remember that these sacrifices are for a season. Every season must come to an end. Now we are at the place where we can say yes.
We increased our income
I used to always get confused when I read stories about people saying they paid off their home in less than 5 years when living off one income. Especially when their mortgage was higher than mine. I wasn’t jealous, I just wanted to know what was their secret. Then I realized that besides them being frugal, they had multiple streams of income. So we looked into generating income that worked around our schedule. Our focus was and always will be our service to the people.
For me, I was trained to educate in the field of science and used that opportunity to tutor and teach part-time. My husband is very talented in the field of art direction and design so he opened up his business while working full-time. In doing this, we were able to increase our income year after year. Maybe for you, it might be getting that new position or working from home to reduce childcare cost (yes it does increase your income because you have less going out).
How about you, what are your strategies for eliminating debt?