Today we share a debt success story from Sarah, who, along with her husband, paid off tens of thousands of dollars in debt!
Tell us a little bit about yourself
Hi! My name is Sarah and I am a wife and work-from-home mom to two little girls, ages 2 and 1. I love personal finance and anything involving making or saving money! I run my own personal finance blog, The Frugal Millionaire, and write for a variety of other personal finance sites. We recently moved from AZ to NC, so in my free time I love exploring the city, spending time outdoors, baking and being with my family.
How did you acquire $40,500 in debt? What did that debt consist of?
When my husband and I first started dating, we had $7,500 in combined credit card debt, I had a car loan for $15,000 and he had a student loan for $18,000. That’s a total of $40,500 in debt!! No thank you!
What did it feel like to have that much debt?
It felt like we were never going to get ahead, much less pay all of it off. I’m not going to lie – I had trouble sleeping most nights because of it. I regretted the credit card purchases but knew there was nothing I could do except work to pay it off.
How long did it take you to pay it all off?
Once we got serious about our debt repayment plan, we paid the credit cards off in about five months. The car loan and student loan were paid off two years after that.
What resources did you use to help you through this process?
We read a few sites on personal finance, mostly ones that referred to Dave Ramsey. But mostly, we just relied on each other to be open and honest with our finances, learned the benefit of value-based spending habits and earn as much money as possible.
Did you face any challenges along the way?
Oh yes! We had two babies during that time so medical bills kept popping up and slowing down the debt payoff process.
How did the debt affect your marriage?
As long as we regularly were communicating about our finances (a minimum of twice a week), we were fine. We were both OK with missing out on expensive events and finding free things to do for fun instead of spending money.
What were you doing for a living while you were paying off the debt?
I was working as a financial counselor, ironically, for a major university during the time we paid our credit cards off. My husband was working for himself as a painter / contractor, which he’s still doing now. Shortly after our credit cards were paid, I became a stay-at-home mom and wrote freelance articles on the side. Any extra income we made went towards the car and student loan.
How did it feel once you paid it all off?
FANTASTIC!! Making that final debt payment felt SO good! We finally felt free and like we had control over our life and our finances again.
What practical tips do you have for people looking to pay off their debt?
Make a plan and a budget, and then stick to it! Look for creative ways to both save and earn money so you can pay off your debt faster.
What steps are you taking now to stay out of debt or to build wealth?
We are focusing on growing our businesses right now and earning as much as we can while living frugally. We did acquire a car loan with a very low interest rate in the past year, but other than that, we are debt-free. We save as much money as we can each month and contribute to our retirement and investment accounts. Our dream is to pay cash for a house (or at the very least have a massive down payment) within the next 5 years. We’ll see if we can make this happen!
To learn more about Sarah and her family’s journey to millionaire status, you can find her blogging over at The Frugal Millionaire.
Note: This is part of a series called “Debt Success Stories” which features people who were able to pay off a significant amount of debt. If you have a Debt Success Story I would love to hear about it. Please visit the contact page to let me know the details.
Refinance Your Student Loans or Credit Card Debt
With the average credit card interest rate around 15%, this could save you a ton of money over the long haul. SoFi will refinance your credit card debt to as low as 5.99% so that you can pay your debt off even faster. Use this link to get $100 cash back if you get approved. They also refinance student loans to as low as 2.355% APR.
Have a Lower Credit Score?
Check out Credible instead as they are able to help people refinance to a lower rate that don’t have great credit.