This is the second part of Katie’s story, you can read Part 1 over here. Today Katie shares a few tips on just how they managed to accomplish such a feat. Mr. Frugal and I are also compiling a list of the extreme measures we’ve taken as a family (and are currently taking) to be debt free. We’ll be sharing at least one per week until they run out. You can read more about the cash only envelope system over here and you can download FREE Debt Snowball and Avalanche Plans Worksheet over here.
Here is the rest of Katie’s story…
We paid $99 four days later to enroll in Dave’s online Financial Peace University. Trust me, that $99 HURT. Dave doesn’t accept credit cards, so that $99 was REAL money.
On December 8, 2011, just two days shy of exactly 28 months, we sent off our final payment to pay of my husband’s 13-year old student loan.
How did we do it?
I wish I could tell you it was easy. It wasn’t. It took hard work. It took even more time away from our family. It took prioritizing. It took patience. It took perseverance. It took tears. It took sweat. It took self-control. It took realizing that stuff was *just* stuff. It took humility. It took asking for help. It took receiving that help. It took letting go of control. It took letting God take control.
Though I can hardly sum up what emotions I felt as we went through the process, I have been able to share what I’ve learned with people struggling to let go, like we were.
1. Write Down Your Budget Every Month.
I’m a list junkie. So, when it came to writing down a list of all of our income and spending, I got a little giddy. Some might see it as a chore, but I’m telling you… writing down where our money was to go before we sent out payments gave us a sense of peace that seemed to seep into other facets of our lives. I knew I had $200 for groceries. I knew our bills were paid. I knew I’d have money to put gas in the car. No more wondering if this was the charge that put us over the edge into the red. When I saw our hard-earned money being sent out on paper first, it took away that high blood-pressure inducing anxiety that Quicken brought on. Plus, by writing it all down, we found money! On average, we sent $1800/month to our debt. We were taken care of. Everything would be a-ok.
2. Cash doesn’t bounce, nor does it accrue interest!
Dave Ramsey devotees will know about his Envelope System, that has you writing down every penny spent on paper envelopes, which eventually need replacing, whether you’ve written in the allotted spots, or the envelopes have torn. Just because Dave helps folks out of debt doesn’t mean he’s not a marketing genius!
The best $1 I’ve spent in the past 2 years was at Target on my Envelope System. It’s a plastic coupon organizer! It’s bright, so easy to find. It’s small, so it fits in my purse or diaper bag. It’s durable, so I’m still using the same one I bought 2 years ago. I love it so much, when friends ask me to do financial counseling for them, I give them one (I keep a small supply on hand, just in case there is a need for an envelope system. No, really! I do!).
I don’t write down every little thing I spend money on, because I know when the cash in the envelopes run out, there is no more to put in! My sections include Blow Money ($50/month), Food ($200/ 2xs a month), House ($100/month), and Kids Activities ($20/month). If I lose the system, I’ve got our $1000 Emergency Fund to cover, what would definitely be considered an emergency. But really, how often do you lose your wallet? And I’d much rather lose a finite amount of cash than credit cards (of which we have none) with thousands of dollars available.
3. Stop trying to keep up with The Jones’ and start sharing with them!
This is a biggie. So many people are concerned with how other perceive them, that they spend their lives running after a goal that will never be reached. That constant race is what landed us $77k in debt! So, instead of shelling out money for things like clothes for my kids (even at the Goodwill, that adds up!), I ALWAYS ask friends first. We’ve been so blessed that the first time I spent money on clothes for my kids in as long as I can remember was for Christmas shoes!
We cloth diaper, so instead of buying a whole pack of disposable diapers for a plane ride to Colorado when I would only need 3-4 diapers, I asked on Facebook and had 4 disposable diapers in my hand by the end of the night.
I’ve asked for and received baby bottles, winter gear, closet organizers, bouncy chairs, an Exersaucer, free babysitting and so much more, just by asking! The trick to this is to be just as generous. I used to hoard things, thinking I might need them at some point for some reason. But knowing I can keep my garage a little cleaner and help a friend out? I’m all over it!
4. Trust in something besides yourself.
This is a tough one., but the most important, in my opinion. It’s that whole “letting go” thing that really hangs folks up. I can’t tell you how many times I had to verbally remind myself to “trust the program” when it came to sending out that big ol’ debt payment, or pillaging the very meager amount we had saved for our daughter’s college ($1100 saved in 3 years) to fund our Baby Emergency Fund.
I knew in my heart that we were on this journey until the end, and that learning to trust something, or someone, besides myself was going to be a BIG part of that journey. There would be no fundamental change in our lives until we were able to do just that.
And what did I find out? That trust, in my spouse, in my abilities, and in God brought a peace more powerful and overwhelming than my stubbornness.
After all, it’s my stubbornness that got me $77,232.88 in debt in 5 years.
And it’s my trust that got me out.
Katie moves the hands behind the blog My Daily Bread Crumbs, where she blogs about faith, finances, and food. She’s been blessed with a similarly driven and very supportive husband of 7 years, three inspiring children, and two wacky dogs. She spends her days managing her household, refereeing kid squabbles, and working on her imperfectness. You can also find her on Facebook and Twitter (@MyDailyCrumbs).