Fight for Freedom

$21,000 in 7 months.  WHAT?! That’s impossible!  Yes, that’s how much debt my wife and I paid off.  Yes, that’s crazy.  Yes, I’m a little weird.  And yes, I only bring home about $2,300/month during that time (it has since crept up).  And guess what?  It’s never felt better! We have positioned ourselves to both graduate with a degree debt free.  We own two paid for cars.  We contribute to a Roth 401k with a company matching 50%, we have a fully funded emergency fund. We get to enjoy life now.

Keys to getting out of debt:

• Budget. Keep it simple. Really simple.  Once you understand your income and your expenses, you can understand what you need to cut or how you can increase your income to meet your obligations.  Please do not complicate this. If you have questions on how to do this, leave a comment and I’ll help you understand what worked for us.

• Set Limits. What does this really mean?  For example, once you’ve set a limit on how much you can spend on groceries, DON’T spend more than that.  That simple.  Diligence is the key.  Cash is one of the best limits you can set for yourself.

• Save Money Creatively. Only spend money on what’s important to you.  Is going out for lunch really that important to you or would you rather save $35 for the week  and spend it on something that you REALLY want?  Focus your efforts on saving money on things that you really don’t care for (but are easy to spend money on) and put that same money towards what you really want. I’m not asking you to take out all fun in your life, I’m asking you to define what’s fun for you and don’t spend money in other areas, but save it towards your “fun” areas.

• Swallow your pride. Over $10,000 of that debt was tied up in my car that I had when I was single.  I loved this car, but I wanted to be out of debt more… so I sold it and came out on top, and now we have two paid for cars (I went from a 2003 Audi A4 to a 1994 Toyota Camry) and it has never felt better.  Along with no car payment, gas has gone down (better gas mileage in the Camry), auto insurance has gone down, and a whole host of other things have been freed up because the stress of having a loan is not over our heads.  Swallow your pride and sell the things that you have the most money tied up in to help you get out of debt.  If you’re in debt, you probably don’t “need” an Audi, a 60″ flat screen, etc.

Like I said earlier, it has never felt better!  I wouldn’t change it for a thing. I don’t know how I can ever live with a car loan again. It just doesn’t make sense in my mind.  Those of who have one, what are your thoughts on this?

Our life has changed SO much.  I can now focus on other side businesses that are going well, without being stressed that I may have to stay where I am forever.  The freedom when you have no debt is incredible.  The ability to focus on what’s important is now more clear than ever.

“The rich ruleth over the poor, and the borrower is slave to the lender.” - Proverbs 22:7

Have you recently got out of debt?  How did you do it?  What has it enabled you to do?  What did you learn from it?