When my wife, Jennifer, and I got married in March 2010, we thought we were OK financially, kind of like everyone else.
Jennifer was working two jobs, and I was working at one part-time job and looking for work. While Jennifer came into our marriage with a $20,000 car loan, I was the one who brought along a lot of debt: $20,000 for a car, $70,000 in student loans and $26,000 on a vehicle that I had co-signed on for my brother.
Yet even though we owed $136,000, we really weren't that concerned about our debt because it seemed normal to us to have car payments and student loans.
The Wake-Up Call
At our church, we signed up for a four-week mini introduction to Dave Ramsey's "Financial Peace University." At the first session we were asked to write down our total debt on a piece of paper.
There were five couples in the room, and the total debt for all of us was $300,000. We were pretty shocked that one-third of the debt in the room was ours.
I'd always been told that student loan debt was "good debt" and Jennifer thought that having a car loan was normal, but after this session we decided to get serious about paying it off.
The first thing we did was write down a budget. We created two spreadsheets: one for our income and expenses and the other for our debt snowball. The snowball works by paying down one debt and then applying that payment to the next debt and so on until you're debt-free.
At first it looked like it would take us five to seven years to pay off our debts, but we decided to focus intently on it and eliminate it faster.
In the end, it took 21 months to pay off everything. That's because we devoted 70 percent of our income to paying off our bills.
First, we traded in both of our cars for one car. We carpooled for six months until we could save enough cash for me to buy a used car. Trading in those cars eliminated $21,000 in debt right away. That was a tough sacrifice for both of us because Jennifer loved her SUV and I loved my pickup truck, but it also got us off to a really big start.
Jennifer and I have worked anywhere from two to six jobs at a time to bring in more money.
Jennifer works in human resources full-time and also serves tables at a restaurant for extra income. When we got married, I was driving a Zamboni machine, and then I got a full-time job in purchasing. I also teach private ice hockey lessons on the weekends to supplement my income, and coach a high school ice hockey team.
One of the more unusual things I did to bring in extra cash was to respond to ads on Craigslist looking for models. I was paid to be a "test dummy" so that techs could practice giving ultrasound tests.
We also started selling things that we didn't need, like a second computer, small appliances, and even my Xbox.
When we ran out of stuff to sell I started doing something a little more creative: dumpster diving for things we could sell. I would go around on trash pickup day and grab stuff that people had thrown out, like old TVs and a barbecue grill, and sell them on Craigslist to bring in extra cash.
Cutting Costs, But Not Fun
We made a pact to keep our expenses to less than 30 percent of our income, which meant we had to give up some luxuries.
We limited ourselves to $200 a month for spending money and $350 a month for food, including both groceries and eating out. Jennifer became an expert at clipping coupons and watching for buy-one-get-one-free deals.
I traded private ice hockey lessons in exchange for hotel points and airline miles. One parent didn't have the cash for the lessons, but he had millions of miles from his work travel. We were able to go to Seattle for our first wedding anniversary using those miles and go on another trip to visit Jennifer's family in Minnesota. We also went to Missouri for a long weekend by agreeing to take a time-share tour. We got a free hotel room and meal vouchers, and only had to spend an hour touring the time share.
Since April 2012 we've been debt-free. Once we were debt-free, and with God's favor and blessings, we kept up with our discipline and put that income into savings.
Now we have a contract on a house that's being built and we project that we'll have $80,000 in savings for the down payment and an emergency fund by the time it's ready in November. We're amazed that we're living debt-free and that we can buy a house when we're only 28 and 29.
Even more important to us, though, is how good it feels to have the security of money in the bank to tide us over if anything bad happens.