That’s right, this is the post I’ve been waiting to write since before I started FiscalGeek. We just sent off our final payoff to Wachovia Dealer Services on our VW Sportwagen. In just over 11 months we have managed to pay off $63,535.65 of credit cards, credit lines and two vehicle loans. Yes we still owe on the house but don’t rain on my parade. Since this is such a special day I’ve asked FiscalWife to help document our story sharing her insights on our journey to financial freedom because I certainly couldn’t be writing this post without her incredible help and support through this process.

What Made you Decide to Get Debt Free?

Paul: Honestly this was all Angela (FiscalWife) to start. We were sitting in church and they were doing ads for Dave Ramsey’s Financial Peace University. Later that day she mentioned that we should go because she was concerned about our finances. I halfheartedly agreed and we signed up. Up until this point in our marriage our finances were a relatively taboo subject. We just kind of avoided the issue because we felt relatively helpless and directionless. Plus I bought a lot of stuff but that’s neither here nor there. After that first session I was beyond gung ho. As my wife would tell you, when I’m focused on something my vision narrows and I throw myself at it with full force.

Ang: I had been concerned with the state of our finances for a couple of years before we started on the plan. I knew we were making way too much money to be going in and out of debt. Also, Paul and I had very different spending habits – he loves cars, gadgets, outdoor equipment and other toys. I enjoy outdoor equipment too, but I’m not much of a spender and agonize over purchases. Paul would literally come home with spreadsheets to show me why we “needed” this motorcycle or that recreational item… I was no match for him. If it was something I thought would be fun, I’d give in quickly. If it was something I wasn’t sure about… it was only a matter of time. My problem was that I was disorganized and over-committed with my time. We were spending a ton of money on eating out because I hated planning our meals. Basically, I knew that we were being wasteful of the money that God had so graciously providing for us through Paul’s employment. We were spending too much on things we didn’t need. I have had the wonderful opportunity to give some of my time to short-term, over-seas missions. I want to continue to serve over seas as God calls me. I also want to be able to give substantially to different ministries all around the world. I knew we weren’t going to be able to do that well if we continued to go into debt.

How Did We Get Started?

Ang: I had voiced my concerns a couple of times, but we didn’t really make any changes. We would just wait to pay off our debt when we would get a bonus. That would relieve my concerns a little, but then I would be frustrated again, because if we had stayed out of debt we could have had a nice little savings account. I didn’t really know how to bring this up in a way that didn’t make me come off as the nagging and disapproving wife, so I began to pray for Paul and myself. I prayed that God would help us to get our acts together and that if possible, He would send a mentor along for us. Especially for Paul, I really wanted to find someone whose opinions Paul could respect. Well, when we started Financial Peace University last January, I had nooo idea the impact Dave Ramsey would have on our family. Paul immediately read the materials and it’s like a switch was flipped in his heart. I’m sure Paul will tell you more, but from my perspective, I saw Paul mature in his role as a husband, father and provider. He has always been such a faithful, devoted and generous guy – but it’s like the “baby steps” were the just the right amount of tinder to set his passion aflame!

Paul: We started by raising a baby emergency fund of $1000. Some may argue that you want a larger cushion for emergencies but this is what Dave Ramsey recommends and I have to admit I’m a rule follower. What I would do though is once we got a budget going I’d save our large debt payment until the end of the month so we’d have our $1000 plus our debt payment as an extra buffer in case anything came up. Fortunately we didn’t have any super huge hangups other than my brakes in the truck.

We used the debt snowball method to order our debts from smallest to largest but with one modification. I had a much hated Citibank credit card that was in the middle of the snowball but since we had a tax return coming knocked that out first. That really kicked things off (that one had adjusted to a 29% APR that they offered to reduce once I paid it off, classy). We then just systematically moved through our debts from smallest to largest rolling our big old snowball. Every time we paid off a debt we were able to throw those payments on to the next one. It really does work, there is a great satisfaction in tackling one after the other. Be sure to take the small wins and celebrate on your way out.

The Breakdown of our Debt

1st Credit Union Visa: $992.04

Wells Fargo Overdraft Credit Line: $1234.48

Citibank Mastercard: $6693.58

Credit Union Truck Loan: $10,139.17

2nd Credit Union Visa: $11,505.17

Wachovia Car Loan: $32,971.21

Where Did You Get $63,000 in 11 Months?

Paul: Short answer all over the place. I have to admit I make a good wage at my day job. I’ve been in the tech industry going on 15 years as a network engineer. So we have a relatively large shovel with which to dig ourselves out. Although all of these payments and a large mortgage don’t help much. We worked really hard to get a good zero based budget going which was the very key for our success in my opinion. Angela worked a part time job which all went towards debt. I sold pretty much everything that we had laying around either on eBay or Craigslist. Most of it was my stuff. I admit it, I like to buy things especially gadgets. Fortunately newer gadgets have a decent resale value. My employer offers stock awards based on yearly performance so I was able to take the stock that vested and throw it at our snowball. I also received a yearly review bonus that also helped. This blog actually helped a bit, as the months have gone on I’ve been getting more and more traffic and revenue from the ads on this site (I hope you don’t find them too intrusive). Finally just this week I sold my motorcycle which is allowing us to hit our goal.

Ang: From my perspective, the best explanation is that we really did “give every dollar a name”! I actually love our monthly budget meetings. I knew that it was a time where I could lay out our needs (for my domain – house, kids, pets, etc.) and that we would work it out. We also talked about the fact that if we aren’t going to be eating out as often, I needed to know that I had Paul’s support to make meal planning a priority. No complaining about having to eat leftovers or “cheap” food. Most months we budgeted enough money for a dinner out every two weeks. There was also an “entertainment” budget for a date night or movie with the kids a couple of times a month. We weren’t stuck languishing at home every weekend! We also allocated money for things like gifts, hair care, school supplies, pet care and gas. Once we figured out our averages in these categories, we just stuck with them. We are very fortunate that we can live comfortably on about half of our income.

I think the biggest source of non-conventional income for our debt pay-off is learning contentment. I don’t feel the need to have a super nice, well decorated house and designer clothes. Our kids don’t participate in every sport or activity offered. We try to choose to do the things we love at affordable prices. We ski, but we don’t go on ski vacations. We pack a lunch, packets of hot cocoa and instant coffee. I actually had an argument with the lady at our local “ski resort” because she was going to try to charge me a dollar for a paper cup. We will continue to live like this as far as I’m concerned. If we are going to go to the beach, you better bet we’ll be packing along our tent and cooler. Living on less than you make, requires a little creativity. In the book of Philippians, the apostle Paul writes: “I have learned to be content whatever the circumstances. I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want. I can do everything through him who gives me strength…”. I try to tell our boys that we are fortunate, we have everything we need and most of the things we want. I am thankful, like the apostle Paul, for the perspective that comes from experiencing both ends of the spectrum. God is faithful and longs to walk closely with us no matter what our financial situation.

What Was the Most Crucial Thing You Learned Through This Process?

Paul: For me it was how to build and use a budget. Over the last year we’ve got a good and workable fiscal plan in place and we’re able to account for things that happen like car repair. Also this year we were able to pay cash for our entire Christmas for the first time ever. Along with that we have adopted cash envelope budgeting which makes it really easy to keep track of your spending. If there’s no cash, you don’t buy anything.

Ang: The most crucial thing for me was to learn how to communicate with Paul about our finances. Early in our marriage, I did the finances. But then I had two little guys to take care of and we were moving to a new area. I was overwhelmed and handed them back to Paul. I knew things weren’t going well, but I didn’t want to just take them back, like a mother scolding a child. I wanted to work through them with Paul – with him taking the initiative. I wanted him to lead our family into this area of growth. Taking the Financial Peace University class gave us tools we needed to start the conversation. Dave Ramsey’s perspective gave us insight into how men and women look at money and broke down some of the communication barriers. Now we just keep the lines open.

What Was the Hardest Thing About Paying Off This Debt?

Ang: The hardest part for me was keeping my time organized so that I could properly plan our household needs. I needed to carve out time to have food in the house and make dinner, so we weren’t tempted to eat out. I also needed to be organized so that I could accurately predict our needs at budget meetings. It’s hard to remember things like school pictures and teachers’ gifts without taking some time to think the month over.

Paul: This would be the budget. I’ll tell you the first 2-3 months was rough trying to get a workable budget going. If you haven’t been operating on one it takes awhile to figure out how much you really can live on in your various categories. It also takes some negotiation as to what stays and what goes. I got pretty frustrated early on being the geek and wanting to account for every penny. This is where the envelope budgeting was so helpful because Angela could manage her stuff without feeling like I was watching her every move. There needs to be some give and take if you are going through this with a significant other. Like weight loss or working out you need to stick with it and get through the first month or two of difficulties. It will really pay off in the end.

What Did you Find Surprisingly Easy About Paying Off Your Debt?

Paul: conspicuous consumption. I like stuff. I love gadgets, tools, cars, motorcycles. Over the years I’ve acquired a lot of stuff, most of it on credit. So I was incredibly surprised to find out that I really didn’t need that stuff. Along this process I found something I never knew I was looking for: contentment. I am very blessed and this process helped me to realize that fact. I got rid of many things I didn’t really need and feel much better about it. I promise I have sworn off new cars entirely. Truthfully I feel like the scales are lifted from my eyes and I look forward to the future where we can invest and give freely without the burdens of debt around our necks.

Ang: Sticking to the budget once we agreed to it. I felt we did a pretty job of talking things through. I loved hearing Paul tell me that he had sent another big chunk of money off to some credit card at the end of the month. He would send me spreadsheets (you think I’m kidding, but no) of our debt pay-off progress. I loved seeing more and more zeros at the bottom of our different loan balances.

Now What?

Ang: Well, I’m thrilled to think that we will have our emergency savings fully funded by the end of summer. Then we are thinking of taking a trip to see our friends in Australia. Then, I suppose we move on to paying off the house and getting the boys all set up for college (at least for tuition,books and housing – I’m thinking they should have a part-time job to support some of their expenses). I get excited thinking that if we maintain our current lifestyle, we can really begin to “give like no one else”. I want us to be set up for a good retirement, of course, but I really want to know that we are being good stewards of God’s provision in our life.

Paul: stay the course. We’ve got our budget in place, that will remain relatively the same and those payments that would have gone to our debt are going to fund a large emergency fund based on six months of expenses. Once that is complete we’re kicking off our 401k retirement investing as well as funding a Coverdell ESA for our two boys college. We will then cap that off with a trip to Australia and finally to paying off the house. That’s our plan and I’ll keep you posted as we go right here on FiscalGeek. Thanks for reading, this indeed is a happy day in the FiscalGeek household and it’s great fun to share it with you.