fbpx

Our Debt Free Family

Commit. Plan. Take action.

How We Paid Off $65,000 of Debt In 11 Months on a Single, Middle Class Income

| 12 Comments

Part 2 of a 3-Part Series

At the end of July 2013, my husband Mike and I decided to pay off all of our debt, including our mortgage, as quickly as possible.

We understood it was a huge endeavor and estimated that it would take us about eight years to do, but we knew the feelings of freedom and achievement once we met our goal would be well worth the dedication, sacrifice, and hard work in the end.

As the saying goes, “How do you eat an elephant? One bite at a time.”

We still have a long way to go before we are completely debt free, but in this three-part series, I am taking you through exactly what we did to pay off over $65,000 from August 2013 through June 2014.

If you missed Part 1, you can check it out by clicking here.

If you want to skip ahead to part 3, go here.

[Read more…]

Pursuing a Master’s Degree When You’re in Debt: Is It a Good Idea?

| Leave a Comment

Being in debt often limits your options. You cannot get an affordable loan due to the higher risk factor you now carry. It is also difficult to get your personal finances in order, considering you have many loan repayments to handle each month. Your options may be limited, but that doesn’t mean you can’t take steps to improve.

Pursuing a master’s degree in fields such as business administration is a sure-fire way to boost your career to a new level. Better career means better income, which in turn can help you recover from your debt. That said, a master’s degree can be relatively expensive, so is it a good idea to pursue a graduate degree when you’re in debt?

Affordable Options

Let’s take a look at how you can pursue a master’s degree when you’re in debt. You can start by looking into online programs from reputable names such as Rutgers Online. Online courses are now accredited and allow you to get the same valuable degree as their offline counterparts.

There is another big advantage you will gain from going the online route too: affordable fees. Online degrees like AACSB online MBA are up to 50% more affordable than the equivalent offline degrees. Not only can you get an accredited degree that will help push your career forward but you can do it without spending as much money in the process.

Before you jump right in and enroll, however, there are more things to consider. Choose a degree that gives you the most career advantage. If you’re in marketing, for instance, look into online MBA programs that will help you become a better marketing executive and a prime candidate for a promotion.

More Homework to Do

Choosing a degree to pursue is just the first step. Since you have a less-than-stellar credit score and plenty of bills to take care of every month, you need to go the extra mile to make the pursuit of a master’s degree work.

You can start by seeking scholarships and financial aid. There are scholarship programs designed to help online students; these are the programs you should start with. Not all scholarships are based on merit and there are many opportunities to get them, especially today.

Financial aid is just as easy to find. Companies now offer incentives to persuade their employees to get a higher degree. This is because promoting an existing employee to a higher position is much cheaper than recruiting new executives. Check with HR if you can take advantage of such incentives.

Financing the Degree

If you still need a loan to finance the degree, then make sure you get the right type of student loan. Take your time and compare quotes from multiple lenders before borrowing any money. Calculate the total cost of using each loan and go with the best option you have in hand.

With an accelerated master’s degree such as the AACSB online MBA mentioned earlier, you can earn a master’s degree in as little as 12 to 15 months. The extra income you bank after giving your career a much-needed push will help you get your personal finances in order.

How We Paid Off $65,000 of Debt In 11 Months on a Single, Middle Class Income

| 18 Comments

Part 3 of a 3-Part Series

My husband and I decided to pay off all of our debt, including our mortgage, as quickly as possible.

We understood it was a huge endeavor and estimated that it would take us about eight years to do, but we knew the feelings of freedom and achievement once we met our goal would be well worth the dedication, sacrifice, and hard work in the end.

As the saying goes, “How do you eat an elephant? One bite at a time.”

We still have a long way to go before we are completely debt free, but in this three-part series, I am taking you through exactly what we did to pay off over $65,000 from August 2013 through June 2014.

Click here for Part 1 and Part 2 if you missed them.

[Read more…]

How Celeste and Rita Paid Off $49,000 of Debt in 18 Months

| 14 Comments

Hawaii, Ireland, and $49,000 of debt gone!

In this interview, Celeste and Rita share how they’ve balanced saving money with what’s truly important to them, the sacrifices they’ve made for their goal, and the unexpected result from their debt free journey.

DogsHere is the interview:

ME:  Thank you for sharing your story with Our Debt Free Family! Please tell us a little about yourselves so our readers can get to know you.

We are Celeste and Rita, and we are both 44 years old. We’ve been together for five years and married for two, and we live in Portland, Oregon.

Rita works in law enforcement. She enjoys listening to podcasts and the radio show from her hometown, running, and playing with our dogs.

Celeste works as a nurse part-time, volunteers, and enjoys making things with her hands: knitting, sewing, and crafting.

We have two dogs and two cats. We both love to travel, IPA craft beers, updating our 1957 home, and ’80’s music.

ME: Welcome! What made you decide to focus on becoming debt free?

Rita will be able to retire in about 11 years so the idea of enjoying our retirement without the weight of debt is a no-brainer.

CatsME: How much debt have you paid off, and how long has it taken you?

With your guidance, we’ve paid off $49,048.83 in the last 18 months. Woohoo!! We now have $279,604.76 left including our mortgage.

ME: Congratulations!! What kind of debt was it?

We have paid off three credit cards, a motorcycle, two cars, and a good portion of student loans, along with making our regular monthly payments.

ME: You’ve crossed off a lot of items from your debt snowball! What did you do for work while you’ve been paying off your debt?

We both worked our jobs mentioned earlier. About ten months ago, Celeste decreased her work hours from about 35/week to about 10/week, which also decreased our income.

ME: What has your annual income been during this time?

About $65,800.00, which includes both of our incomes and rental income from the attached apartment we rent out.

ME: Did you do anything to increase your income?

Rita volunteered for two work trips where she was able to earn overtime.

ME: What sacrifices did you make to reach your goal?

Rita going on those trips was a huge sacrifice for us. She was gone for 30 to 77 days. It’s tough to be apart and away from home for so long.

We also decided to downsize from two cars to one. Now we only pay insurance/maintenance/gas for one car and one motorcycle. It has forced us to think ahead and to limit those trips “for just one thing.” We also use public transportation and ride bikes or walk whenever we can.

DIY

ME: What are your best money-saving tips?

Perhaps the most important thing we do is buy with intention. We ask ourselves, “Do we really need this new item? Can we borrow or share an item? Can we purchase the item second hand?”

We would rather spend our money on experiences than “stuff.”

With Celeste not working as much, she’s explored DIY methods to save money and decrease toxins/plastics in our home.

She makes our laundry soap, hand soap, lotion, almond butter, shampoo, and toothpaste. She’s also made produce bags from old t-shirts and reusable hankies from an old sheet.

We buy most of our dry foods (i.e. spices, rice, beans, flour) in bulk to decrease packaging and save money.

Because we produce less trash we’re able to use “on-call” trash pick up about every 6 weeks.

We wash our clothes in cold water and use the clothesline whenever possible. We both take lunch to work, and Rita has her coffeemaker at work to cut down on runs to the coffee shops.

ME: You’ve done a lot to cut your spending! What advice would you give to someone considering starting their own debt free journey?

We haven’t stopped doing the things we enjoy in order to pay off our debt faster. Instead, we just do them less often to keep us sane. Everyone is different and has different ideas of happiness. This works best for us.

Also, don’t beat yourself up for slipping sometimes. Most people haven’t been taught about money management. It takes time to learn and of course, practice and patience. Taking little steps can make a difference.

Ireland

ME: That is great advice! Have you made any big purchases with cash? If so, how long did it take you to save up?

Rita is from Ireland and goes back every year to visit family. In 2015, we both visited for about $5,000. We also took a vacation to Hawaii and spent about $3,000 on the trip.

We started saving for the trips about a year in advance, saving $100 of each paycheck ($400/month). We also used some money from Rita’s work trips for these vacations.

We bought a much-needed new mattress and box spring set for $1,700. We used money from Rita’s work trip and bought when it was on sale. Celeste made a cool headboard for $200 to go with it. The fabric for the headboard was discounted with coupons.

We also put in a small deck with used composite material for less than $200. The composite decking itself would have been $800 if we had bought it new!

Homemade HeadboardME: You’ve accomplished a lot in the last 18 months! What has been the best part about your debt free journey?

Learning about healthy financial habits has been really liberating!

An unexpected benefit is how it’s enhanced our relationship.

Combining our bank accounts and debt was really hard for Celeste due to her large amount of student loans. She didn’t think Rita should pay for the debt Celeste incurred before they were married.

It’s been a process, but through it we’ve become more of a TEAM. We’ve opened up our communication, and it’s brought us closer.

We are on track with each other and our goals are now in sync.

ME: Thank YOU, Celeste and Rita, for sharing your story with us!

Now I’d love to hear about you!

What parts of Celeste and Rita’s story did you find most inspiring? Which tips can you apply to help you reach your financial goals faster? Share in the comments below.

10 Ways to Save For a Home in a Hurry

| Leave a Comment

So, you’re ready to buy a home but don’t know where to start when it comes to saving. You probably have bills now (rent, utilties, car payment, etc.) and now you’re trying to save thousands of dollars for a down payment on a home. How do you do it?

How to Save for a Home

There is no “fast” way to save for a home. When it comes to saving, finding focus and consistency lead to success. So, how do you go about successfully saving for a house? Here’s where you can start:

  • Get an idea of the buyer-seller market in your area. Of course, everyone has their idea of a dream home but buying a lower cost home may help you in the long run. After years of adding to the home and any renovations you may have made, your equity will go up and you’ll be more likely to be able to afford a higher priced home in the future.
  • Automate your savings. Most banks have an option to automatically deposit cash into your savings account. For instance, if you get paid on the 15th each month and want to put $200 of each check into savings you can set it up to transfer on the 16th. Doing this ensures that you won’t forget to save (or find a reason not to).
  • Save every extra penny you can. In addition to automated savings, try to save 100% of all windfalls. This includes bonuses, gift money, and prizes. You may also consider participating in a money challenge to encourage healthy saving habits.
  • Don’t lose focus. Saving for a home can be consuming. Don’t lose focus on the other important things in life. For instance, if you are saving for a home it would be counterproductive to skip paying your rent. Although you don’t want to be renting any longer, you still need a place to live. Saving for your home is important but so is maintaining good personal finance practices.
  • Budget. Budget. Budget. Create a budget and stick to it. Budgeting will help you realize where you can cut expenses and where you can’t. This will help add to the savings for your home.
  • Generate more income. If you want to save more money fast, you may want to consider looking for ways to make more money.

10 Ways to Speed Up Saving for a Home

<p>Speeding up your savings isn’t really possible without making more money or altering your life in some way. If you’re looking for ways to save for a home fast, think about taking on one or more of these tasks to generate more income: Ask for a raise. If you’ve been at your job for a while, ask for a raise. Negotiating a raise can be intimidating but remember that your time is worth money. Walk into the negotiation knowing what you’re worth and so will they. Having additional money each check will help you save for your home. Get a second job. Maybe you aren’t able to get a raise with your current employer. If that’s the case search for a second job. Consider weekend and part-time positions that won’t add too much to your plate but will help you save. Downsize your current living situation. Not everyone is able to do this but you can “generate” more income by downsizing for a short period before buying your home. Many couples move back into their parent’s home when saving to buy their own. Have a yard sale. Almost everyone has junk in their house they could get rid of and, chances are, there is someone out there willing to buy it and add it to the junk at their home. Hold a yard sale to generate some extra cash to add to savings. Make money with surveys online. There are survey sites that pay fairly well. You can make extra cash to stash away using the various survey websites out there. Make sure you get signed up with one that actually pays out though. Trim your budget. If you’ve taken the advice above, you have a budget. Are there any places you can cut down? Groceries are always my first go-to when I’m looking to trim my budget. Sell blood or plasma. There are parts of your body you can legally sell for money. Blood and plasma are both great ways to make extra cash to put in savings, especially if your blood type is rare. Many places will pay up to $400 for donating plasma, depending on the amount you’re able to give. Most donations equate to about $25 to $50 though. You can donate regularly though so if you want to add this to your list of ways to make extra cash it’s a good one. Open a high-yield savings account. Opening a savings account with a higher interest rate may help you save money faster by generating more money in interest than you would normally. However, many high-yield accounts have penalties if/when you withdrawal so before you open an account, read the fine print. Freelance. If you’re a writer or know a trade that you can freelance with, do it. Freelancing is a great way to make extra money to save for a home. You generally make your own schedule and only play off your own strengths. Talk to a financial advisor. Lastly, if you’re having trouble saving for your home or need more ideas on how to better prepare for your home, contact a financial advisor. They won’t necessarily help you generate more income but they can help you find money you didn’t know you had by sorting your finances. Getting ready to buy a home is an exciting and stressful time. Wanting to get it over with is natural but, when it comes to saving for a home, there is no fast track. However, take the tips and ideas above into consideration and you’ll be on your way in no time.</p>::Pexels
Speeding up your savings isn’t really possible without making more money or altering your life in some way. If you’re looking for ways to save for a home fast, think about taking on one or more of these tasks to generate more income:

  1. Ask for a raise. If you’ve been at your job for a while, ask for a raise. Negotiating a raise can be intimidating but remember that your time is worth money. Walk into the negotiation knowing what you’re worth and so will they. Having additional money each check will help you save for your home.
  2. Get a second job. Maybe you aren’t able to get a raise with your current employer. If that’s the case search for a second job. Consider weekend and part-time positions that won’t add too much to your plate but will help you save.
  3. Downsize your current living situation. Not everyone is able to do this but you can “generate” more income by downsizing for a short period before buying your home. Many couples move back into their parent’s home when saving to buy their own.
  4. Have a yard sale. Almost everyone has junk in their house they could get rid of and, chances are, there is someone out there willing to buy it and add it to the junk at their home. Hold a yard sale to generate some extra cash to add to savings.
  5. Make money with surveys online. There are survey sites that pay fairly well. You can make extra cash to stash away using the various survey websites out there. Make sure you get signed up with one that actually pays out though.
  6. Trim your budget. If you’ve taken the advice above, you have a budget. Are there any places you can cut down? Groceries are always my first go-to when I’m looking to trim my budget.
  7. Sell blood or plasma. There are parts of your body you can legally sell for money. Blood and plasma are both great ways to make extra cash to put in savings, especially if your blood type is rare. Many places will pay up to $400 for donating plasma, depending on the amount you’re able to give. Most donations equate to about $25 to $50 though. You can donate regularly though so if you want to add this to your list of ways to make extra cash it’s a good one.
  8. Open a high-yield savings account. Opening a savings account with a higher interest rate may help you save money faster by generating more money in interest than you would normally. However, many high-yield accounts have penalties if/when you withdrawal so before you open an account, read the fine print.
  9. Freelance. If you’re a writer or know a trade that you can freelance with, do it. Freelancing is a great way to make extra money to save for a home. You generally make your own schedule and only play off your own strengths.
  10. Talk to a financial advisor. Lastly, if you’re having trouble saving for your home or need more ideas on how to better prepare for your home, contact a financial advisor. They won’t necessarily help you generate more income but they can help you find money you didn’t know you had by sorting your finances.

Getting ready to buy a home is an exciting and stressful time. Wanting to get it over with is natural but, when it comes to saving for a home, there is no fast track. However, take the tips and ideas above into consideration and you’ll be on your way in no time.

Have you saved for a home? How long did it take?

The Two Things You Must Do Before Getting Started on Your Debt Free Journey

| Leave a Comment

You’re ready for a change.

You have committed to getting out of debt, but you don’t know where to start, right?

You’re tired of living paycheck to paycheck and seeing your hard-earned money go toward interest to the bank or credit card company.

You bring home a decent income, but before you can actually enjoy what you’ve worked so hard for, you have to pay all of the bills. And what’s left over for you? Not much.

Well, I am here to help!

[Read more…]

What Do You Do When You’ve Have a Great Year?

| Leave a Comment

<p>It is that time of year again where many of your friends and family will resolve to change themselves for the better. The “new year, new me” vibe isn’t anything new. In fact, many people have become cynical of resolutions altogether. While I see how that could be easy to do, resolving to better yourself, or setting goals, is extremely helpful in life, both financially and personally. At the beginning of 2017, just one year ago, I resolved to better myself physically and financially. My credit score was around 420, I was living in a motel, and I was seriously overweight (around 280 pounds). I was spinning my wheels and needed to make a change. By February, I’d paid off the biggest piece of debt keeping me from being able to move and in April we leased an apartment. Then I started focusing on my health and continuing on my current financial path. I continued to pay off debt and started to save money. In June, I had to use all my newfound savings for a medical emergency (doesn’t that always happen?). No matter what happened, I continued to push forward. Skip to December 31, 2017, and my credit score is sitting at 650 (much better than earlier in the year). I’m also down 106 total from two years ago, 74 of which was lost in 2017. I also managed to establish some savings and established some credit for myself. When entering 2018 I was kind of flabbergasted. What do you do when you come off a good year? How do you maintain momentum?</p>::Pexels
It is that time of year again where many of your friends and family will resolve to change themselves for the better. The “new year, new me” vibe isn’t anything new. In fact, many people have become cynical of resolutions altogether. While I see how that could be easy to do, resolving to better yourself, or setting goals, is extremely helpful in life, both financially and personally.

At the beginning of 2017, just one year ago, I resolved to better myself physically and financially. My credit score was around 420, I was living in a motel, and I was seriously overweight (around 280 pounds). I was spinning my wheels and needed to make a change.

By February, I’d paid off the biggest piece of debt keeping me from being able to move and in April we leased an apartment. Then I started focusing on my health and continuing on my current financial path. I continued to pay off debt and started to save money. In June, I had to use all my newfound savings for a medical emergency (doesn’t that always happen?). No matter what happened, I continued to push forward.

Skip to December 31, 2017, and my credit score is sitting at 650 (much better than earlier in the year). I’m also down 106 total from two years ago, 74 of which was lost in 2017. I also managed to establish some savings and established some credit for myself.

When entering 2018 I was kind of flabbergasted. What do you do when you come off a good year? How do you maintain momentum?

How to Maintain Momentum

Keeping up momentum is something I’ve always associated with sports, running more specifically. I knew how to maintain and push through that way. A huge portion of that is the mentality, of course, so how do you maintain momentum when you’ve had a great year? Here are a few things I am doing to ensure my 2018 is just as successful as my 2017:

  1. Create a “did it” list. One great way to maintain momentum is creating a list of things you’ve already accomplished. By writing down the things you’ve already been able to do you can see the progress you have made. Consider keeping this list somewhere you walk by every day. When you accomplish something new, add it to the list.
  2. Set and focus on smaller goals. Instead of focusing on the fact that you need to lose 100 pounds, set a smaller weekly or monthly goal. For example, set a goal of losing 20 pounds by the end of March (a little more than six pounds per month). This makes your goal seem more attainable and it will prevent you from becoming overwhelmed.
  3. Celebrate all of your progress. Any progress you make towards your goal should be celebrated. Just be sure you celebrate it in a way that will not hinder you. For instance, many people trying to lose weight will reward themselves with some big, greasy meal. Instead, consider grabbing yourself a new outfit or piece of clothing (you’ll need it with 20 pounds gone). Financially, people oftentimes save or pay off debt just to recreate the cycle again (spending all of their money or charging their cards). Don’t let your celebration cost you your success.
  4. Make small efforts each day. You should do something small each day to push you towards your goal. If your goal is to save more money, consider taking a money challenge that has you saving a different amount each day (the 365 Day Money Challenge is great). The same goes towards other goals you’ve set for yourself. Make a small effort each day and you’ll reach your goals in no time.

Each of these steps is something to consider when you are trying to maintain momentum in your personal life. Whether it is bettering your finances, doing better at work, or losing weight, you can keep climbing and reach your goals.

Have you had to find an innovative way to maintain momentum? Share it with us in the comments. 

Ron and Thu’s Debt Free Story – How They Paid Off $167,000 in 7 Years

| 12 Comments

Today, I have something a little different to share with you.

Instead of sharing more about my family’s debt free journey, I have a special guest who has agreed to share his debt free story.

Ron Noble tells how he and his wife Thu paid off $167,500.00 in seven years! They are a true debt free family because they have paid off all of their debt including their house!

Continue reading to find out how they did it and what they have been able to do since becoming debt free.
[Read more…]