BeckyPaying off debt is no easy feat. It takes grit, motivation and courage! My husband and I paid off all our debt in January 2020.
Now we’re doing it all over again. However, I’m feeling encouraged this time around by being transparent and sharing our experience. We know we can do it again since we’ve done it before!!!
My husband and I got married in the fall of 2017. When we sat down to combine our finances and see what debts we needed to pay off, I was astounded at how much my husband had accrued! Needless to say, it took us roughly 2 LONGGGG years to pay everything off.
We paid off the remainder on my car, my husband’s student loans, an old repossessed car of his (why do young men buy “toys” they can’t afford?), an old Sprint bill, taxes as my husband had to pay in 2 of the years we were getting out of debt and more.
We paid off roughly $44,000. It was a glorious thing to have it all paid off! We lived almost 2 amazing years completely debt free and then we dug ourselves back into debt when purchasing a “family SUV”. I let the car fever get to me, guys!
I had been driving a Mazda 3 for 10 years (still have it too!) and when I had our son at the end of 2020, it was so difficult to fit us all in that small car! We couldn’t put the car seat in the middle because both front seats would have to be pushed forward and that’s not feasible for someone DRIVING the car!
We decided to put the car seat behind the passenger seat, but that too created problems when the passenger would have to push their seat forward to fit the car seat into the back seat and then push their front seat back again once they got in. Riding as a passenger with your knees in your chest is no fun. Speaking from experience here!
I digress, we bought a 2015 Toyota Highlander and it has been the best! This was 6 months after we bought our first home.
Most of us will have a mortgage at some point in our lives. Which is okay if you have a game plan to pay it off as quickly as possible (preferably 15 years or less).
This brings me to our current situation. We want to get this SUV paid off now! I loved not having a car payment and I’m kicking myself now for not sucking it up temporarily and saving up cash for a vehicle.
But this is where we’re at and I’m here to walk you through the process of how we paid off our debts the first time, as well as paying this car off in the hopes that we’ll be an inspiration for even ONE person!
Add Up Total Debt
The first thing we did when planning to pay off our debt was make a list of all our debts, being sure to include how much each one was. List everything and anything you owe on. This includes car loans, student loans, personal loans, credit cards, mortgages, medical debt, etc.
Once you’ve listed them all out it’s easier to digest how many debts you have and how much they all add up to. When you don’t see the whole picture, it makes it tricky to set up a plan to pay everything off.
List Out Debts Smallest to Largest
There are various methods to paying off debt. You may have heard of the debt snowball, the debt avalanche, or the debt fireball. The one that seems to work the best for my husband and I is the debt snowball.
The debt snowball method is where you pay smallest debts first and pay larger debts last. I know some people freak out about the interest growing quickly on higher interest debts, but we feel so much more motivated doing the snowball method. Hear me out on this.
You pay the minimum payment on all your debts, except the smallest one. You put any and all extra cash you have on the smallest debt to get it paid off FAST! Once the smallest debt is paid off, you roll that payment over to the next smallest debt, on top of the minimum payment you were already paying on it.
As you continue to pay off the smaller debts first, you roll the payments you were making on the smaller debts over to the bigger debts until you’ve paid off every last debt. While we might not feel like we’re paying off interest as quickly, it’s more motivating for us to check debts off our list.
Obviously, this won’t work for us this time around as our auto loan is the ONLY debt we currently have, aside from our mortgage. However, we still intend to throw every last dollar we have on our auto loan until its gone. Once our auto loan is paid off, we’ll be able to focus all our attention back onto our mortgage.
Use a Debt Tracker
Debt trackers are great motivators while paying off debt! When we originally paid off our debt in 2020, I made our own bar graph debt tracker and colored in the bars in increments as we paid off debt.
To make a debt tracker as a bar graph like we did, just list your debts down the left side of a piece of paper or a poster board. Then write increments of money along the bottom. We went by $500.
You then draw a bar out to the amount that corresponds with the numbers on the bottom of the graph, Say you have a student loan for $15,000. You would draw a bar for your student loan line item out to $15,000 to match the money increments on the bottom.
So, for every $500 we paid off, we’d color in that specific bar, until we completely paid it off. You can go by any increment you’d like. If you have a bigger debt, you could color in a portion of the bar for every $1,000 you pay off. You get the point.
Never Give Up, Keep Going!
The most important thing to remember, no matter which method you choose to pay off your debt-NEVER GIVE UP, KEEP GOING! You’ll be shocked how quickly you can pay off your debt once you’ve got a plan in place.
Don’t stop because you think you’re not paying off debts fast enough. Those debts have to be paid off regardless. Continue to throw as much money as you can find onto your debts and remember that you’ve come a long way from when you first started.
Celebrate the Little Wins
Celebrating the little wins encourages you to stay motivated! Every time you pay off a debt, acknowledge it.
Celebrate, even if it’s something small. Go out for ice cream, see a movie, make a fancy dinner at home, buy an item you’ve been eyeing for some time. Make sure to celebrate the little moments because it will encourage you to keep up that great momentum!
Whatever debt payoff method you decide to use, START! Start your journey to debt freedom. You won’t regret it!
I can’t wait to look back on this post when we have our auto loan paid off and be reminded that while it does take stamina and hard work, it’s worth it to live a life of freedom and be able to do whatever we want with our money.
NEVER GIVE UP, KEEP GOING!
