Today’s Debt story comes from ESI Money from www.esimoney.com

How did you get the debt?

When we were married we had debt for college, a car, and two homes.Most of it was mine (the college, the car, and one home), but other than the home, it wasn’t that much ($5k for college and $10k for the car).

What made you want to get rid of the debt?

We knew pretty much zero about managing money (our parents didn’t really teach us anything about it). Shortly after we were married we took a money management class at our church (similar to Dave Ramsey’s stuff but before Dave was on the scene). It was suggested to avoid debt as much as possible. We decided we wanted to do better than that and be completely free from it.

How long did it take you to pay it all off?

From the time we started making extra payments until we had zero debt was about six years.

What resources did you use to help pay off the debt?

We made a budget (as we’d learned in our class), then worked the two ends of it — growing our income and decreasing our expenses. By focusing on both of these, we had an ever-increasing financial surplus that we plowed into debt reduction.

What were the challenges that you faced?

Impatience. We wanted it done NOW and it took several years.

How did this affect your marriage/family?

It was a positive because we were on the same page. We were united in our fight against the debt monster. We don’t need much to be happy and because we had been successful at growing our income, we didn’t have to sacrifice that much. For instance, we fully funded our retirement options during this time.

What were you doing for a living?

I was a marketing executive and my wife was an audiologist. She later quit working to raise our kids. I also started a freelance writing side business and we used 100% of the profits to pay down debt.

How did it feel once it was paid off?

It was awesome but also somewhat anti-climactic. The awesome part was that we were deft free — we didn’t owe a penny to anyone. But there were no fireworks or a massive laser light show. I simply wrote the last check and sent it in.

What are some practical tips you can share with people looking to pay off their debt?

Develop a budget so you know where your money is going and you can control it. Work to grow your career (and thus your salary). It’s your #1 financial asset and can be worth millions more if you put a little effort into it.

Reference links:

How to Manage Your Career to Make Millions More

The Value of Growing Your Career is Worth Millions More than I Thought

Develop a side hustle as well. Not only will it help get you out of debt but it can set you up for early retirement within ten years.

Reference link:

How a Side Hustle Business Can Get You to Financial Independence in 10 Years

Control your spending, especially what you spend on a home. Buy what you need in a house, but nothing more. Over-buying can harm your net worth in so many ways that it’s scary.

Reference links:

How to Buy a House and Pay Off the Mortgage in Less Than 10 Years

Stop Acting Rich: The House You Buy Determines Your Wealth

Watch small spending. There are many ways that money can quietly slip through your fingers and you never notice it. Keeping a tight budget will allow you to see if and where this is happening and take action to shut it down.

Reference link:

How Small Spending Can Add Up

Don’t add to the load. You can’t get rid of debt if you borrow more, so once you decide to eliminate it you also need to never borrow again.