We made several decisions that propelled us toward the goal of paying off our debt. These are ten of the most important things we did!
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Shuffling through the monthly statements and bills was overwhelming. Thinking about how much money this would cost us over the lengthy “repayment period” was sickening. “We’re paying how much each month?!”
Finding ourselves with a lot of debt was not exactly how we envisioned our financial future when we got married. Devising a plan to pay off our debt was the first step to digging out of the hole we’d gotten ourselves into. But in order to overcome such a significant mountain of debt, we had some decisions to make about what we would or would not spend money on.
We had to buckle down and cut corners and earn more and do anything we could to climb out of the pit. The truth that I’ve heard many times is, “You can wander into debt, but you can’t wander out.” You have to be intentional.
There have been countless steps we’ve taken and decisions we’ve made in support of paying off our debt.
We are almost to the end of our debt free journey, as we have paid off the majority of the debt and are working diligently to pay off the remainder. A celebratory post will follow once we’ve achieved our goal of debt freedom! 🙂 Update: WE’RE DEBT FREE!! We paid off over $130,000 total!! Read about some of the benefits of our debt-free lifestyle here!
It is important to note that even small decisions add up. Sometimes it is easy to think, “That will only save $10-15, which pales in comparison to the debt I have.” And that’s true. But several $10-15 decisions, made over and over again, add up to significant progress.
Also, small decisions can impact your mindset. If you get off track in the small things, it’s easier to get off track in the big things, too.
These are just ten of the many decisions we made and steps we took to help us pay off such a huge amount of debt. I realize some of these may not work for everyone. But if you are wanting to get out of debt, I hope the actions we took will inspire you and make the goal seem more doable for you!
1. We created a monthly budget.
To get to where you want to go, you first have to know where you are.
Creating a budget is such an important key to achieving any financial goal. Without doing a budget, you won’t really know exactly how much you can afford to pay toward your debt each month. You also won’t be able to see areas where you can potentially cut back in order to increase your debt payment. Having a budget each month really helped us to see our situation in a better light.
Specifically, we operated with a cash envelope budget system, which was SO helpful in getting us on track with our spending.
Need to create your own budget? You can sign up below to receive my FREE Monthly Budget printables!
- How to Create a Budget in 6 Simple Steps
- How to Budget with a Fluctuating Income
- 10 Reasons Your Budget is Failing
2. We decreased our grocery budget.
The grocery budget is one of the easiest places for most people to decrease expenses. Before we had kids, our weekly grocery budget averaged around $40 for the two of us. I clipped coupons, meal planned, cooked at home, and shopped sales at multiple stores in order to keep our costs low.
Now that we are a family of five, our weekly budget has increased to about $80-100 per week. I no longer realistically have the time to clip coupons, but I still meal plan every single week and cook the majority of our meals at home. I also still shop the sales and love online grocery shopping (my favorite options are Kroger ClickList and Walmart Grocery Pickup) as a way to avoid impulse buys!
You can learn more about how I save money on groceries with online grocery shopping. It has become my favorite way to grocery shop!
Get $10 off an order of $50 or more with Walmart Grocery Pickup here.
The USDA published a food plan document that gives the average cost of food at home for four different budget levels: thrifty, low-cost, moderate-cost, and liberal. According to the lowest-cost thrifty plan, the average cost for a family the size and ages of mine would be $156.90/week. So while I could probably trim down our weekly budget a bit with coupons and such, I feel pretty good about the fact that I’m able to feed my family of five well on $80-100 each week.
3. We utilized a government-based loan repayment option.
When I first started working as a Registered Nurse, I was employed at a non-profit hospital that was also one of the lowest-paying hospitals in my area at the time. This hospital cared for a disproportionate number of patients on Medicare and Medicaid. At the time, The Health Resources and Services Administration offered a loan repayment program for individuals with a certain amount of student loan debt who also were working at qualified health care facilities.
Because I had significant student loan debt and worked at an eligible facility, I underwent an extensive application process to be awarded partial loan repayment in exchange for two years of service at this hospital. I could have worked at a hospital that paid me more, but I wanted to work at this hospital for various personal reasons, so being able to participate in this program helped to make up for the difference in income. Over a two year period, this program helped me to pay off about $24,000 of my student loan debt.
4. We worked multiple jobs and found side hustles to save and earn money.
There were periods of time when my husband and I each worked 2-3 jobs at a time in order to earn extra income to apply toward paying off our debt. This was grueling and often exhausting, but it really helped us make significant progress.
We also used many money-saving tactics in order to stretch our hard-earned money as much as possible. I regularly scour the internet before making a purchase in order to find the best price. I use Ebates to earn hundreds of dollars back on my purchases. Free shipping codes, promo codes, and so forth are a normal part of our necessary shopping.
5. We chose to live on only one income.
During the years when both of us were working full-time, we chose to live on only one income while using the second income to pay off debt. This was especially beneficial when, after having children, I chose to work less and stay home more. We were already accustomed to living on one income, so it wasn’t so much of a “lifestyle crisis” for us to make that leap.
I’ll admit, it isn’t a whole lot of fun to only live on one income when you actually have two incomes. There are so many temptations to simply spend that extra money on things that you want. But we made a deliberate choice to give up things we love for things that we love even more.
6. We used cloth diapers on our babies.
We have used cloth diapers on all three of our babies, which saved on the cost of diapers each month. While there was some up-front cost associated with purchasing the diapers, they paid for themselves very quickly and we were able to use them on more than one child, furthering their value.
We haven’t exclusively cloth diapered (we do use some disposable diapers, too), but when you consider that we’ve had at least one child in diapers at all times for the last four and a half years, cloth diapers have provided us with a pretty significant savings.
7. We didn’t automatically replace items that were broken.
When our 30+ year old dryer finally broke, we did not replace it until we were able to save up cash and find a good deal. In the meantime, I hung all of our clothes and cloth diapers up to dry, both inside and outside of our home.
When our microwave broke, I considered replacing it, but then realized I didn’t really need it. I could use my oven, toaster oven, stovetop, crock pot, or pressure cooker for pretty much anything a microwave could do.
These are just a couple of examples. When you are working toward a huge goal, you really begin to examine every purchase.
8. We purchased used clothing for our kids.
Clothing for three kids can really add up if you aren’t careful. Thankfully, I live in an area where consignment sales abound, and I can purchase great-quality items for a fraction of the cost of new items.
I love shopping consignment sales to find items we need at a very low cost. Many of the sales in my area have a 50% off day at the end of the sale, which is a great way to really score some great deals!
I’ve also had good success purchasing items from ThredUp. If you aren’t familiar with ThredUp, they sell gently used (or sometimes new with tags!) clothing and shoes for kids.
They also have clothing for women, including maternity items. You can click here to read how I use ThredUp to revamp my own wardrobe as well!
I’ve purchased many quality, brand-name items for both my children and myself for very low prices. I’ve always been impressed with the quality of the items I’ve received. You can customize your online search and sort items easily, depending on the item type, color, size, and price you’d prefer.
If you don’t already have a ThredUp account, you can sign up here and get $10 off your first purchase!
9. We sold things.
I was such a pack rat growing up. I kept everything. I was a pretty sentimental child, and since we moved a lot, I think I held onto “stuff” as tangible pieces of the past I was leaving behind with each move.
As I’ve gotten older, I’ve really begun to swing toward the opposite end of the spectrum. I’ve definitely been moving toward a minimalist lifestyle for a few years, and I find freedom in getting rid of things we don’t use or need.
I enjoy decluttering our spaces and our lives. I find that uncluttered spaces make me much more at ease, whereas cluttered spaces make me feel uptight. As a bonus, decluttering has provided some extra money to apply toward our debt!
I love this post that Shannon wrote at The Humbled Homemaker about how decluttering can help pay off debt. I also found this article from Bob at SeedTime to be good motivation, too, as he made over $2000 in one month just by decluttering!
I regularly scoured our home for books, DVDs, toys, clothes, and so on, and sold as much of it as I could. Oftentimes this was through consignment sales, Craigslist, or online book buyback sites such as BookScouter.
If you want to sell books, BookScouter is a great resource because you simply enter the ISBN of the book and they compare offers from multiple book buyback sites. This allows you to see which sites will offer the most money for the books.
Many books will not be in demand, but some will, and you can make some cash easily. I had several textbooks from my graduate program that were still current enough to sell, as well as some personal books.
10. We learned to say “no.”
Learning to say “no” is probably the least fun, but definitely one of the most important things we did. In order to stay within our budget and be able to have extra money to apply toward debt, we often had to say “no.”
We said “no” to going out to eat when we didn’t have money left in our entertainment fund. We said “no” to traveling more, purchasing clothing, shoes, books, music, event tickets, and so on when we did not have the money in the corresponding fund. We said “no” to buying a home when we were knee-deep in debt already.
We were consistently saying “no” to things we wanted now so that we can more easily say “yes” to things we want later.
My husband and I had to choose between the pain of saying “no” now versus the pain of a life lived in bondage to debt. We decided some temporary sacrifices are worth the long-term benefits of being debt free.
At times, saying “no” has been really hard. The reality is, it’s fun to be able to buy things and go places and do what we want whenever we want. But we have made many small decisions in support of our larger goal of paying off our debt, and it has been worthwhile in every way.
You Can Do It, Too!
If you are wanting to get out of debt, I’d like to encourage you to set a goal for yourself. Make a plan. Once you have action steps planned out, it’s so much easier to stick with it. Some of these ten things may work for you. Numbers 1 and 10 are essential steps that will make a huge difference in your journey to debt freedom.
If some of these items don’t apply to you, that’s okay! Think of other ways that you can save or earn more. My hope is that our journey can bring some encouragement and inspiration to you on your own journey!
What are some ways that you’ve been able to pay off debt? I’d love to hear from you in the comments below!
Do you want to learn how to create and implement a cash envelope budget? My husband and I used cash envelopes for years, and it was hugely foundational to how we view and handle money.
But when we first started, I had so many questions…”How often do I need to go to the bank? What budget categories should I use cash for? How do I handle the checkout line?”
If the thought of starting a cash envelope budget sounds overwhelming to you, I highly recommend clicking here to check out Cash Fueled Life. It’s has all of the information that I wish I’d known in the beginning of our budgeting journey, and it walks you through the ins and outs of setting up a cash envelope budget that works for YOU. Click on the image below to learn more!
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