Today’s Debt Story comes from Mr. and Mrs. Adventure Rich. You can follow their story over at Adventure Rich.
How did you get the debt?
This is a two part question for us. For me (Mrs. Adventure Rich), I graduated with student loan debt (~$18K) and a new car loan (~$17k). Mr. Adventure Rich had student loans ($10k) and credit card debt ($10k). Our combined debt totaled $55,000 when we started dating in 2012.
What made you want to get rid of the debt?
I was fresh out of college with a new, southern California job and I had no idea what I wanted in life. But I knew I wanted options. The option to leave southern CA (I’m a Michigan girl and never really considered settling there), the option to change jobs, the option to pursue a passion project, the option to buy a house, the option to retire early. For me, debt was limiting my options because it required a certain income to cover the principal and interest.
I wanted to get rid of it as quickly as possible, but I also started reading personal finance blogs in 2012, so I had to balance my payoff debt drive with my desire to invest early and begin to build my 401K. Plus, once I met Mr. Adventure Rich and we moved towards marriage, I suddenly had a whole slew of reasons to save and goals to achieve.
How long did it take you to pay it all off?
We paid off all of the debt (in addition to paying for a majority of our wedding/honeymoon, funding our retirement accounts, saving for emergencies and starting a down payment) in February 2015… 2.5 years after we started to aggressively pay it off. A large portion, over $42k of the $55K, (not including interest) was paid in our first 15 months of marriage.
What resources did you use to help pay off the debt?
Much of our motivation and information about paying down debt came from personal finance blogs, but we did browse Dave Ramsey’s website as well. Some of his calculators were helpful. From all of the information we gathered, I built a big excel sheet and began to track our payments monthly, watching the balances dwindle and the “total amount” dive lower and lower. It was awesome!
What were the challenges that you faced?
While we didn’t have any big challenges during our debt payoff, we did have a few things that slowed our payoff (good things!). We got married in late 2013, so we slowed some of our debt payoff as we paid for the wedding. Then, as we learned more about investing and compounding interest, we dedicated more money towards investing so that we could boost savings and retirement accounts. Again, all good things, but the competing priorities lengthened our payoff timeline a bit.
How did this affect your marriage/family?
When we made the decision to start paying off our debt, we were still dating. It is odd looking back, but it was not an awkward or hard conversation. We discussed our finances, realized the wisdom in paying off our debts early (regardless of where our relationship went), and started to help each other out. We did not support each other financially while dating/engaged, but we supported each other by getting creative about dates, not encouraging spending, and motivating each other.
It was incredibly impactful to have a common goal that we were both working towards throughout our relationship. Once married, we went into overdrive on both debt payoff and saving/investing. We paid off our debt when I was 4.5 months pregnant with our son… and I am so thankful we were able to welcome him into a debt free home.
What were you doing for a living?
I was beginning my job (same job today!) in a business role with a Fortune 40 company. Mr. Adventure Rich worked for 10 years (6 before we met, 4 after) at a very small non-profit college as a maintenance supervisor.
How did it feel once it was paid off?
Paying off debt was a huge relief. We felt a weight lifted off our shoulders and we were excited to plan for our future post-debt! It was an incredible sense of freedom.
And while becoming debt free was a huge milestone, we value the journey we went on in order to pay off the debt as well. It was a big part of our relationship from the get go and it helped to lay the foundation for a collaborative marriage where we are mutually working to achieve goals and pursue our passions.
What are some practical tips you can share with people looking to pay off their debt?
I would suggest the following tactics that helped us in our debt payoff:
Track It: Find a centralized location to list and track your debt (like the spreadsheet we used). Seeing our various debt/loans in one place was very helpful as we worked to pay it off. It was a bit hard to see the large number in the spreadsheet at the beginning, but it served as a great source of motivation as we pushed through the discouraging times.
Find the Quick Wins: We focused on quick wins first. Are we paying too much eating out? On our phone bills? Insurance? Housing? Cars? Can we shop around for any of these items or eliminate them from our spending? Finding ways to spend less so that we could dedicate more to our debt was a big factor for us. We challenged ourselves to eat at home more, make our own lunches, drink less (or invite friends over to drink at home vs. at bars) and find cheap fun (hiking, beach days, picnics, etc.).
Sell Stuff: We made some quick money by selling or flipping things on Craigslist and eBay. Don’t use that iPad anymore? How often do you use that patio heater?
Windfall Money: Not sure if you would call this a true “windfall”, but we put thousands of dollars of wedding gift money towards our debt. Sure, we could have bought a ton of useless crap with the money or splurged on fancy dinners, but debt freedom was much more enticing Not getting married or already married? No problem! If you get a bonus, side hustle money, or other gift/unexpected money, put it towards your debt!