Many don’t like to talk about money. Finances are seen as a private matter. I believe it’s important to talk about finances and learn from one another. Here in this post, I will share how we worked together to become debt free. Now, I must give a disclaimer – we still have a mortgage! This is the story of how we were able to pay off all card debt, student loans, and own both of our vehicles before our 4th wedding anniversary. If we could do this on a very small to modest salary, so can you! The following is what helped us:
1) a mutual desire to eliminate debt. it was essential that we were both on the same page!
2) sacrificing for the sake of the goal. as my mother often says, “short term pain for long term gain”. while engaged, I decided to forgo purchasing a vehicle and walk to work instead. as a result, I had extra cash at the end of each month that I applied to my student loan debt.
3) we desired to learn from others. while engaged, we sat down with a business professor and early in marriage a financial adviser. they both helped us to prioritize what to tackle first. crown financial money map was helpful too: http://www.crown.org/
4) becoming debt free took priority over acquiring nice new things. we took the money given to us at our wedding and paid off one credit card. since finances are often seen as the #1 reason for marriage break-down, their monetary presents were helping us on our road to financial freedom.
5) we didn’t put our goal of being debt free on-hold until we had decent earnings. we were slowly chipping away at our debt even when money was tight and one of us was in school.
6) when purchasing our first home, we heeded the advice of my parents. they recommended that we take out a mortgage based on one of our salary – not both. we decided we did not want to be house rich and life poor. this was one of the best financial decisions we have made to date. purchasing a house under our means was the key ingredient to finally becoming student loan debt free.
7) we are working towards putting safety nets in place so that we don’t need to go back into debt again. emergency savings as well as a life insurance policy were added after eliminating our last student loan.
8) we don’t view giving to others as something to start doing when a person has “arrived” financially speaking. it’s a habit that we chose to practice while deep in debt and living paycheck to paycheck.
The last thing that I’d like to add is that I believe the key ingredient to financial freedom is contentment. Being satisfied with less, with old things (from clothes to cars), with a smaller house, and waiting to do house projects or travel until its all paid for in cash are not easy things! We live in a “me” and “right now” society. I believe that contentment is the killer of consumerism. With contentment crawling out of debt is given fuel.
I don’t want this post to come across as if we have arrived financially. Did I mention that my husband is a pastor and I’m a social worker? haha. We are not rich by North America’s standard. Yet, we are grateful for what we have as only 8% of people in the world even own one car. I hope that you too will see yourself as rich and as capable of financial freedom. If you have any tips/experiences or any thoughts about this post, please leave a comment below!