“Our Journey Through Debt- How We Paid Off 25k Doing the Spending Fast…”

our journey through debt

This is a guest post by Alicia Lawrence who has been doing a Spending Fast. -Anna

It’s been one year since my husband and I started our Spending Fast. Since then we have knocked out over $25K in debt (not including what we paid in interest). Anna has asked me to share my journey to getting out of college debt free and how we are tackling my husband’s debt now.

The Backstory

After I graduated college, I was one of the few that made it debt free. But that freedom was short-lived as I married someone who did have debt, and surprisingly more than he had anticipated. The average student loan debt is $27K, my husband had accumulated almost $60K. After our honeymoon, it was a rude awakening when my father-in-law sent me the passwords and links so we could start paying it off. I knew my husband had some debt but the real amount was twice what either of us expected.

For one, coming from money-wise parents, I couldn’t understand how they didn’t know about the amount of their debt. My husband was never encouraged to find the best loans or figure out how to get scholarships. Me, on the other hand, was searching and applying for scholarships since sophomore year in high school.

Start While You’re Young

Even before that, my parents had started a 529 Plan when I was born. Growing up in Alaska, each year every resident receives a Permanent Fund Dividend (around $1,000). Instead of giving that money to me they placed it in my 529 Plan to grow interest until college. By the time I left for college, I had over $30K in my 529 Plan to help me pay for lodging, books, classes and any other student finances I would need.

On a side note, I also worked summers and part-time jobs through college. I placed 35% in savings and the rest was used for living expenses and spending. After college, I had saved over $5K for emergencies. Glad I did since my husband and I didn’t find steady jobs till three months after our wedding. During those three months, I created budgets and action plans on how to pay off the debt quick, but you need money to pay off debt and that wasn’t something we had at the time.

We both got multiple retail jobs hoping it would hold us through till we could get “real” jobs, which finally happened a few months later. So now you know the back story, let me tell you what we are doing now.

How We Made Our Way Through Our Debt… 

The Action Plan

At the first of every month, I take time to write out a budget based on our needs from the previous month and figure out where we can cut a little more. I keep track of all our spending in a mini notebook. Each page covers an area, like food, and beside it the total amount we can spend. I plan our meals out weekly so I know exactly how much we will be spending each week so I don’t go over budget. I usually cook our meals in bulk so we have it for lunches through the week.

Here’s the usual breakdown of where our money goes:

10% tithes

35% debt

40% living expenses

5% entertainment and gifts

10% emergency fund/savings

When it comes to paying off each loan, we targeted the ones with highest interest rate first. Remember, up to a certain point the interest from your debt is deductible on taxes.

While living on bare essentials is no fun, it’s a necessary part of paying off debt quick. We also picked up side jobs to help get a little extra money. Take a babysitting job or check out Craigslist for easy gigs. This Christmas, we are planning on making our friends and family members’ gifts instead of buying them something. I remember when my sister was trying to get out of debt, instead of gifts she did acts of kindness or volunteer work and then told us what she did for us.

It’s amazing once you put your mind to becoming debt free and figuring out your expenses how much money you really don’t need to spend. We moved into a cheap apartment, skipped on cable, and bought the majority of our furniture from garage sales or got it free from friends.

The Future

My husband and I planning to be debt free by 2015, if not before. To encourage us to work towards the goal, we are planning a fun vacation to celebrate being debt free. The 10% emergency fund/savings we set aside each month will be used towards buying a house the year following 2015, except for $3K of it. While we both want kids, we’ve decided it wouldn’t be wise to have a baby when we are still trying to pay off debt so we are holding off till we get a house.

Getting rid of our debt quickly now will definitely bring a brighter and more enjoyable future. It’s like taking off a Band-Aid. Even though you think taking it off slowly will cause less pain, in the end ripping it off fast is really what will cause the least amount of pain in the end.

I hope through my story you will feel confident that there is a light at the end of the debt tunnel for you too. Feel free to ask any questions in the comments below.

 

What is the biggest obstacle you see or imagine when it comes to facing your debt and making your way out of it?

Alicia Lawrence is a content coordinator for a top web design company and blogs in her free time at MarCom Land.

P.S. Ready to get out of debt ASAP? Check out the Spending Fast Bootcamp!

7 comments

7 thoughts on ““Our Journey Through Debt- How We Paid Off 25k Doing the Spending Fast…”

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  1. Emily

    Hi Anna

    Thanks for sharing your story. Like you, I inherited my husband’s school debt when we married. Shortly after, he was laid off of work as well. We managed to pay off his school loans on one income fairly quickly- but it came with sacrifices and living frugally. It was difficult but the end goal is well worth it.

    There is a light at the end of the tunnel and here’s to your journey in reaching it!

    Reply
  2. THE-LOUDMOUTH

    Wow, what an amazing story! I honestly don’t know if I could be on a Spending Fast for a year, let alone until 2015! I’m on the Spending Diet instead because it’s more my speed. I get restless and love to travel, which is where most of my ‘want’ money goes. Also, living in LA, there’s almost nothing to do for free — you at least have to pay for parking. (Trust me, I’ve been trying to find stuff! Taking a walk outside is only fun for so long…)

    Reply
    1. Alicia Lawrence

      Hi Stephanie!

      It has been difficult but after the first 3 months we kinda got use to it. Definitely not saying it’s easy but we are just more resigned to the fact that getting out of debt is more important than any “fun” we could be spending our money on right now. Of course, my husband is having a harder time with this then I am.

      But the truth is we hardly do anything so that we don’t spend money. We mostly read, go the library and get a great book and get your thrill of adventure that way.

      Reply
  3. Rinna

    Love this and thanks to you and Anna for sharing!

    It’s so important everyone do this while young. My husband and I are both 35, thought we had all the time in the world to deal with debt and savings, maybe even getting a home of our own, but then we blinked and our daughter entered high school (grade 7 here in Quebec) and last May my darling husband had to have a heart attack. He’s on the mend thanks to quick doctors and a stent but our savings was quickly depleted, now we have over $300 per month in meds (less than 80% paid back on insurance, we were originally told 80% but now get these lovely updates letting us know another thing that isn’t covered under our insurance).

    We love our jobs but they don’t pay great. Extra jobs aren’t likely due to our location and he can’t take more than his current job. So we’re trying to reevaluate where we can cut and tighten and keep our eyes open for any possible opportunity to bring in more money. No we’re not a success story, I hope one day we can be, but for now I hope we are a reminder to others not to drag their feet like we did.

    Reply
  4. Melissa

    Wow! You are making me so glad that we started a 529 for our son as soon as I found out I was pregnant. He’s now 6 & he’s got about $7K in it so far. We earned a lot of that through the Upromise program, which is free so if you want to start a 529 for your kid I recommend giving it a look to see if it will work for you. We also add $50/mo ourselves. It’s not a lot, but it’s what we can afford & if we keep at it for the next 12 yrs he will have at least $14K less debt than he would have if we hadn’t done the 529 at all.

    Now I just graduated from our main state college myself. It took me 10 long years because I worked full time & was raising a kid for 6 of those years. But my employer reimbursed the tuition portion of my costs & since I took so long I was able to save the couple hundred $$ I needed for books, supplies, & tech fees each semester w/o any trouble. Thank heavens for tuition reimbursement and cheap used textbooks purchased/rented online!!! If there’s a will there’s a way. ;)

    Reply
  5. Carol

    So you…cook all the meals, spend a lot of time planning finances for both of you, and are helping to pay off your husband’s debt? Doesn’t sound very fair…

    I have a similar amount of student debt that I will have to repay soon, but I don’t expect my boyfriend to help me. He got through teaching school for free, because they needed teachers back then, but I had to pay for it, because I went to school during the recession. The way we will organize this is that I’ll take the payment off my perceived take-home pay. So if we both earn $3,500/month, his income is “more” than mine, mine will be $3,000. Then he will pay just over half of our joint expenses. More fair.

    Reply

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