8 Life-Changing Things We Did To Pay Off $227k Of Debt

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Debt…we all seem to have it, right? We’re conditioned to think it’s just a necessary evil we have to live life with.   

Well, last year, after a couple of huge unexpected expenses, we found ourselves deeper in debt. We were paying two mortgages and monthly bills on one income. We were overwhelmed with our finances.

We needed to make a change because we could not keep going on the way we were going. So, in August 2019, we decided to change our lives.

Here are the things we did to pay off $227k of debt and change our financial future. We became debt free this past year with just one military income.

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We made the decision to change

We had previously paid off $50,000 in credit card debt and car loans just two years prior with a re-enlistment bonus my husband received.

Unfortunately, we didn’t learn anything because we never changed how we managed our money or changed our spending behaviors.

This time we had to do things differently. We were determined to change our family’s financial future.

We took a good hard look at our finances. We looked at months of our bank statements and saw our spending was out of control! We needed help!

We went through Financial Peace University, and it was a game-changer. We learned the baby steps toward financial security.

We were finally learning money management…it only took us until our mid-30’s to figure it out!

things we did to pay off $227k of debt

We prioritized our debt

We sat down with all our debt totals. We used the debt snowball method to create a plan to tackle paying off our debt.   

We listed our debts smallest to largest. Then, we paid any extra money toward the smallest debt.  

This was our plan to get out of the mountain of debt we had gotten ourselves in.

We started budgeting

It was time to learn how to manage our money by creating a budget. So, we learned how to use a zero-based budget.

This one simple thing made the biggest impact on our finances. It helped us see the whole picture of our money situation.  

We were able to see exactly where our money was going, and it allowed us to see where we needed to make cuts so we could pay extra toward our debt.

We built our starter emergency fund

The first step in Dave Ramsey’s Baby Steps is to build a starter emergency fund. So, we did. This happened even before we started paying down our debt.

Dave recommends $1000 in savings for any small emergencies. This kept us from taking on any more debt while we were trying to pay it off.

We started to pay off our debt

After we had $1000 in our emergency fund, all the extra money went towards our debt. Now, this wasn’t much during the time we were paying two mortgages. But, every spare penny went toward debt.

We started with our smallest debt and kept going down the list. We finally paid off a total of $37,000 that we owed in student loans and credit card debt in May of this year.   

things we did to pay off $227k of debt

We said no a lot

We said NO to any more credit. I canceled all the remaining credit cards and vowed to myself to never use them again. 

We cut all the unnecessary spending and went to a bare-bones budget. Our grocery and food spending went from $1,000 a month down to $300 for our family of five.

We got rid of cable, stopped eating out, and ended the impulse spending. Everything that wasn’t a necessity was cut out of the budget.

We made the decision that until we were out of debt, there was no unnecessary spending. We had a plan and a goal.

We got scrappy

When you have no money or money is tight, you figure out ways to make extra cash. 

You have to get scrappy if you want to get out of debt. 

We embraced a minimalist lifestyle. We sold a lot of stuff in the process. I used cashback apps to get more for my money when shopping. I started a side hustle of selling books on Amazon and used clothing on eBay.  

All our extra money went towards paying off debt. We were determined to reach our goal of being debt-free in 2020. 

We sold a house

The most significant decision that we made that put the biggest dent in our debt was selling the rental property we owned. This rental property was a money pit from the time it was bought.

Long story short, after 12 years, we were finally able to break even by selling it. 

Of course, this was after we put in nearly $20,000 to repair it. So, after 9 months of paying 2 mortgages, it sold in May of this year…2020…of all years!  

It was finally gone, and so was $190,000 of our debt!

Conclusion

We became debt-free on May 8, 2020. In a year’s time, we had paid off a total of $227,000 of debt.

This experience sucked for us! Going through it has taught us how to manage our money the way we need to. It taught us to be financially independent.

It was a harsh but much-needed lesson.  

I would love to hear where you are in your debt-free journey? Leave a comment below!

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