Three years ago we read the book, The Total Money Makeover by Dave Ramsey. It completely changed our financial life from that point onward. We began budgeting like it was an Olympic sport, cut our expenses down, saved, sacrificed and started throwing every spare penny towards our student loans. It was not easy. It was hard, sometimes discouraging, a humbling and a long 3 years. But we are so glad we stuck with it, the freedom is an amazing lift off our tired shoulders, and we rejoice in the Lord for allowing us to get this point!
The Nitty Gritty
When we started on our journey to become debt free, we didn't have a lot of money. In fact, my husband was still in school, I was pregnant with our first child and we had no insurance for the birth. Talk about a triple whammy! Our income at the time was around $25,000. Our first goal was to pay off the one credit card we had, which was $3,500. We had some savings and decided to go ahead and pay it off with that. Then, we began aggressively saving so we could pay cash for our daughter's birth, which came to around $8,000. To even get it that low required lots of phone calls to hospitals and providers and the benefit of paid-in-full cash discounts. During this time, my husband graduated and continued working his part-time, retail job while job hunting. We prayed for God to provide and felt the need to move back to his hometown, and within less than a month of moving in, a full-time job opportunity opened up. This was such a blessing! Unfortunately, the insurance would not cover the birth since it was before the waiting period was up (1 week to be exact!), but we were able to finish saving the remainder needed! I was able to enjoy and give birth to a healthy daughter and not worry about how we were going to pay the hospital bill!
After the birth, we had a small amount leftover in savings which we immediately put towards debt. For the rest of the year, we faithfully plugged away at sending in whatever money we could to our loans. I learned how to coupon even more, cook more frugally and save in many areas. Saving money became my job! And it paid off -by the end of the year we had paid off more than $11,000 in debt!
The next year, we decided to move again, this time to be near family, and my husband was offered a work at home position with the same company! God truly provided for our needs! His position did not begin until a month after we moved into our new house, but we managed to live on very very little during that one month of no income.
Challenges and Provision
A couple months later, we found out I was expecting our second child. After making so much progress on our debt payoff, I was discouraged to have to begin saving again for another birth. I began calling hospitals again, and was shocked to see how much more a birth would cost in the new town. With the new position, we did not have any health insurance once again and had taken a bit of a pay cut. I was not sure we would be able to make it. We needed a way to make additional income. God heard our cries, and within a few weeks a part-time ministry job opened up to my husband that fit perfectly. We were indeed blessed and thanked God once again for providing for our needs!
As my pregnancy progressed, we became very focused on saving money in every way that we could. We eliminated everything that was not a necessity, but continued to faithfully tithe as we had through the years. We always made a point to give, even while paying off debt and saving on a low income, as we knew that God is our Provider, and that it would not be possible without Him!
During my third trimester, we decided to switch to a home-birth so we could have the birth experience we wanted and save money at the same time (a home birth saved us at least $4,000). We found a wonderful midwife team that truly took care of all my and the baby's needs! Our second daughter was born healthy, at home, on the evening of New Year's Eve. Once again, we did not have to worry about how we were going to pay a huge bill and were able to enjoy the new blessing God had just given us.
The next month, we once again dumped the rest of our savings onto our debt. The end was in sight! I came up with the crazy idea to sell our car. We had a small SUV that really did not fit our needs at the time and decided to sell it, buy a beater van and put the proceeds towards debt. We found an older van for just $1,800 and were able to put almost $4,000 on our debt! This was a huge boost! Since my husband is handy when it comes to cars, he was able to fix it up a bit, saving us even more money. Ironicly, it really felt like we upgraded in cars, since we had so much more room!
By summer, thanks in part to a larger than expected tax return (thank you New Yrs Eve baby, haha!), we finally were able to pay off the last of the debt!
Our total debt payments totaled just over $51,000.
We give God all the glory, knowing that he has blessed us not only with the additional income needed to pay it off, but also richly provided the resources, people, community and knowledge to help us do it. With God, ALL things are possible.
(Disclaimer: This post was written in late May 2012 and published in July. We have been debt free except for the house since then.)