$40K of Debt to $800K of Real Estate … In Just 6 Steps

$40K of Debt to $800K of Real Estate in Just 6 Steps | AndThenWeSaved.com

Debt. As common in the English language as the famous L-word. Love. Too bad they aren’t connected, right? Except. I did find a way to Love money again. You can, too. Even on income that is comparatively small to your circle. It’s not about how much you make, it’s about how much you save. I’ll share some life-changing psychology that took us from dreaded debt to a well-designed life of freedom.

We had just been married and bought our first place. I was a finance student working part-time. He was working fulltime, making a modest mid-five figure salary. In a city full of million dollar homes and fancy cars, I had seen firsthand what bank accounts looked like. I worked at a bank.

We wanted to find the Yellow Brick Road. No Good Witches were available, so we started our own path. It wasn’t pretty.

$40K of Debt to $800K of Real Estate – In Just 6 Steps …

 

STEP 1 – We totaled the debt load

We owed exactly $40K plus $24K we borrowed from his retirement savings. But I was smart. And we were competitive by nature. How fast could we get out without feeling deprived?

I started using my financial education to study our spending. And wealth and millionaire mindsets. And it changed everything. A makeshift budget created in Excel gave us some clarity, but it felt confining, inflexible. It was like a bad fad diet.

I wanted it to stick. I wanted psychological depth, purpose

 

STEP 2 – We made a meaningful goal

It was hairy. It was audacious. I was going to have children and raise them in a home we
owned, on my husband’s income alone and not struggle.

*Exhale*

There it was, better than any budget. Talk about a natural motivator. Did I want those shiny
new jeans now, or, did I want my dreamy family later? The store was no competition for my desired family.

Marketing presents the perfect carrot, just inches in front of you. Buy now. Pay later. It’s easy, they say. They leave out the exhausted, frustrated and stressed person running on the treadmill now, chasing that carrot, paying for it longer than they expected.

We were done running. We wanted off the treadmill of paying someone else. Once we stopped spending, we could breathe. We still could buy the things that mattered most to us and yet get ahead

 

Step 3- We made a debt plan

Got more than one type of debt? Throwing money at them all? It’s like swimming across the ocean with the current against you. Forward motion is sooo slow. We had to strategize the best route to the other side. Instead of paddling in circles.

Automated. Consistent. The debt started to go down and our dream of owning a home looked up.

 

Step 4- We started saving once it made cents.

And then dollars. Then thousands. We started investing once the interest made was competing with the interest paid. It was time to transition.

Our baby girl was born 2.5 years after the wedding. I took a year-long maternity leave. I even went back to school online. I saved hundreds paying it all upfront. Because I could.

 

Step 5 – We rolled with the momentum

It’s hard to stop a bowling ball at full speed. But why stop it when you can see the strike
ahead? Even though our first few throws were weaksauce, it took practice to see what resulted in optimal speed and growth.

I was back working full-time. We sold our second vehicle. We paid our very last consumer debt payment. We had saved up an astonishing 50K and bought our second home. We had a rental unit and a home. It took four years.

 

Step 6 – We tested and tweaked, with gratitude and humility at the helm

With a second baby on the way four months after taking possession of our home, we had one year of maternity leave (with minimal pay) to make sure we could fly. Because our minds truly matched our money, it was easy.

We kept saving. We had freedom. We owned fewer items than many. Yet we owned more than we ever could dream of. In January of 2015, when my maternity leave ended, I quit my corporate job forever. In a sense, I retired. My husband worked but, of course, we have plans to adjust that in the future, too.

New goals. And a lot of love for everything I learned. And a chance to teach others the same. Go ahead, design your own life. Grow rich inside and out. Stay true to your own path.

Maybe you’ll be the next person to share your story just a few years from now. And be able to focus so much more on the L-word and be D-free.

You already make enough money to live rich. It’s a matter of education and honest prioritizing.

 

What about you?  Have you found a way to love money again?

Megan Purnell is passionate about helping families design their life of freedom. You can find out more about her on her blog at www.meganpurnell.com.

P.S. Want to change your mindset? Here’s a game-changer alert! CLICK HERE for the Money Magnet + Abundance Affirmations Super List

3 comments

3 thoughts on “$40K of Debt to $800K of Real Estate … In Just 6 Steps

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  1. Terry

    This is literally the most incoherent rant I have ever read. I could not even follow it.
    No actual steps on what you did and did not do.
    “New Goals.” is not a step that readers can benefit from. What were the goals?

    Reply
  2. Alysha

    The amount of money your husband made had to be an enormous factor in why your plans worked, but that’s just a guess. Also, how long did this take?

    Getting out of debt is HARD. That much all people share when accounting for getting out of debt.

    Reply
  3. Maureen

    I’m not trying to be rude but this was incoherent at best. She states that her husband made a modest 5 figure income so for arguments sake lets say $65k and she works part time (let’s say $20k a year. From what I understand they paid off $64k in 2 years and saved $50k? I am not mathematician but that doesn’t add up. I would like to see cost of living (rent etc) and income to better understand. And there were no actionable goals or clear strategies. Also I could not figure out where she lived. Costs are different in Chicago vs Oklahoma. Also where do you get 1 year paid maternity leave? I have worked in corporate America (Fortune 200 and 500 companies in Chicago) and have never heard of anything like this even for the most valuable top talent. Thanks!

    Reply

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