Hello friends! Today we’re hearing from a new friend of ours, Ashley Moore. She shares her family’s debt free story and three steps they took to pay off $42,000 in debt as a family of 5 on just one income. I hope it inspires you!
Are you a slave to the master of our generation like we were?
Are you drowning in debt and ready to be free?
As newlyweds, my husband and I knew we did not want the stress of debt looming over our marriage. We were children of divorced parents, and from what we understood, the financial strain was a large contributor to our broken homes.
So, to learn from the past and safeguard our marriage, we wanted to pay off all student loans as fast as possible.
Now, as a disclaimer, this isn’t a quick fix. I will give you some practical tips that we used to pay down the debt, and I challenge you to adjust them and make them work for your situation.
Allow me to share with you three things that propelled us down our path to freedom, in hopes that you too will become debt-free.
- Dave Ramsey’s 7 Baby Steps to Debt Freedom
- We’re Debt Free! Our Story of How We Paid Off Our Debt
- 13 Things Dave Ramsey Fans Wish You Knew
3 Steps to Becoming Debt Free
1. Make the Decision
The first thing Colby and I did was decide to become debt-free. We got on the same page with each other.
When you sit down with your spouse and make the decision together to become debt-free, you two will be unstoppable! However, if you aren’t on the same page financially, you will have a hard time moving towards your goal of being debt-free because of the constant tug in different directions.
We have faced seasons where one of us would rather live in the moment, while the other is frustrated because they expected the money would go to the loan payment. This type of misunderstanding caused problems and was not fair to the other person in the relationship.
Decide what you’re willing to sacrifice and what you’re not willing to sacrifice. Then, agree to tackle the debt together.
If you are not married, you need to find an accountability partner. Convey your decision to become debt-free to a trusted friend, mentor, or parent. Then set up a monthly check-in to be sure that you are making progress.
One practical thing that helped us to stick to our initial decision was to follow Dave Ramsey’s baby steps. Click here to read them. When we were in disagreement about a financial goal, we would default back to this as our plan. Doing this helped us to refocus and move forward. It was also a way to help us realize where we may not have been aligning our financial choices in the best ways.
Whether married or single, you will face a wide array of temptations that will threaten to compete against your decision to become debt-free. Whether a spouse or someone else, by having an accountability partner and a resource to refer to when faced with these types of obstacles, you will be setting yourself up for success in sticking to your decision to become debt-free.
2. Set Small, Attainable Goals
Don’t fall prey to the lie that you will arrive at your goal of being debt-free with no plan.
My husband and I made a small, attainable goal that we could do every single month. It was non-negotiable, and it fell into the brackets of what Colby and I were both willing to sacrifice.
Our goal was we would pay $250 to the student loan every single month. We immediately took it off the top like a bill and didn’t treat the payment like it was an optional last expense. There were many occasions we were tempted to spend it. The holidays were especially difficult, and sometimes we caved and spent the allotted money. In hindsight, I’m not too upset about it because we had to find the balance between enjoying our life (kids, family, fun) and reaching this goal. That wisdom came with trial and error. However, that was not the norm, but the exception. We were committed to getting rid of the debt, and we made the payment faithfully for years.
Speaking of family, I’d like to mention a side note. Colby and I were not willing to sacrifice growing our family to reach this financial goal. We knew that God could and would bless our goal to become debt-free while we added children to our family.
If you believe you can’t pay off debt because you have kids, that is not true. And neither is it true that you have to wait to start your family until you’re in a perfect financial situation. You can honor both priorities, and it leaves a lot of room for God to show up along the way with His blessings.
Now that you have made the decision, it is time to set a small, attainable goal. My advice would be to be flexible in figuring out how to honor your priorities along the way. Life will still be happening as you move toward your goal. Don’t get discouraged if you have some setbacks along the way. Determine to move forward relentlessly with your small goals until you arrive at your big vision of becoming debt-free.
3. Snowball All Extra Income
My last suggestion is to find ways to make extra income. Then take that money and pay it towards your loan/s. This method is referred to as snowballing.
Colby and I took on a lot of extra jobs along the way. He would do small remodels for friends after his day job, and I found an online teaching job. God was gracious to provide many opportunities like those along the way.
Also, if you have kids and live in the US, you receive extra money from the government at tax time. We used our tax returns every year for the first four years to pay large lump sums to the debt. This strategy helped us pay off the debt at an exponential rate. If it weren’t for our decision to move forward with having children and receiving those large returns, we would probably still be paying our debt.
According to Proverbs 22:7, we are slaves to the lender when we have debt. So, Colby and I knew it was honoring the Lord to work hard and diligently to pay off the debt. We witnessed God bless us for the sacrifice and hard work along the way.
With God, Becoming Debt-Free is Possible
The amount of money you owe may initially seem impossible to pay, but don’t forget that God is good at moving mountains when we seek to honor Him with our finances.
So, to recap, step one is to decide and use a financial guideline to keep you on track. The second step is to set a goal that doesn’t sacrifice your priorities. Next is to use any large tax refunds and extra income to snowball your debt. Finally, work hard and watch the Lord bless you miraculously as you choose to honor Him with your finances.
It took Colby and me four and a half years to pay off a cumulative of about $42,000 in debt. We did this on one income while we grew our family of two to a family of five. We worked diligently and stuck to our minimum goal of $250 a month. We snowballed all extra income except for enjoying some holidays and treats along the way. Paying our debt off was a very long process. We got weary and lost heart along the way, but God was faithful and showed up in the gaps we couldn’t always fill. We learned to trust Him and live sacrificially, which still helps us today!
Choose to work hard and honor Him with your finances, and you can and will reach your goal of becoming free from the slavery of the lender.
Jesus looked at them intently and said, “Humanly speaking, it is impossible. But with God everything is possible.”
We’re going to do this for the house