Hey friends. Can you believe it? We’re 100% debt free, just as soon as I put the check in the mail tomorrow (literally).
One crazy couple from PA that sold their 1,500 sq ft house, downsized to a 500 sq ft home, sold 80% of their stuff, and side hustled away nights and weekends is officially 100% debt free.
We’re rebooting life. Thanks to Joe Saul-Sehy for that — a reboot is exactly what we’ve done.
I wrote the check and a funny letter. I told the Groovy family I’d write to Navient to commemorate the occasion and I don’t think this one will disappoint.
I can only hope that another millennial finds this letter in a bottle.
I couldn’t leave the envelope unadorned. Oh no.
Do you think anyone will read the return address? Please say yes.
(Also, that’s a shadow on the evelope from me taking the photo. I didn’t give the envelope the finger because that would be weird.)
Anyway, this post has been in the works for two years, so it’s a little longer than most I write. 😉
By early 2015, just a few months from the big 3-0, I started to feel restless. Working a part-time job at a nonprofit organization, I was doing work that made a real impact. Garrett was honing his sales skills at his job, a job he started just a year before.
I was still overcoming the weird illness of 2014 and Garrett continued to work through his own chronic health struggles. Like that wasn’t enough, we spent all of our free time over-remodeling our big house.
Meals and restaurants and trips to home improvement stores comprised most of the non-essential purchases we made each week to the tune of thousands upon thousands of dollars.
This was a typical day…Breakfast. Work. Restaurant. Remodeling. Yard Maintenance. TV. Bed. Repeat.
Big house life was exhausting and expensive. We wasted more money and time than I care to think about.
Neither of us was happy. Between work and health, there was little room for much else, especially not the hobbies or the action verbs we aspired to.
Lately, I’ve been reflecting on our situation. We put ourself in a situation with our personal finances in which we lived paycheck to paycheck, using credit cards to fund remodeling projects.
And if that wasn’t enough, we leased a couple of cars we didn’t really need. We put ourselves in a situation with our personal finances that necessitated W2 employment.
Had we continued with that lifestyle, we would have never been able to retire.
We wanted to travel more often than the two weeks of vacation we had each year. We wanted to be able to leave our jobs to pursue other lines of work (and maybe even entrepreneurship).
But spending the way we were, we weren’t scratching that itch.
We didn’t spend money on airline tickets. We spent money on granite countertops.
Truth be told, I have no idea why we did the things we did. To some degree, perhaps we were trying to keep up with the fantasies portrayed in the endless stream of TV shows we binged each night.
Too tired to do much else, we parked ourselves on the couch two hours a night doing absolutely nothing useful. And what did those TV shows do for us? (Other than reinforce the aspirations of the Joneses, of course.)
It was like life was SCREAMING to us at one point to WAKE UP and get with the program! There’s only one way out of this life and working until death is NOT the only choice.
Enter the movements that are personal finance and financial independence.
Long conversations ensued about how we ended up in the position we were in. We didn’t know anyone who didn’t have debt. Car payments, student loan payments, mortgage payments, credit card debt. You name it. We had it all and so did everyone else. It’s like everyone thought it was normal to finance what they couldn’t afford and we were just as guilty.
Thankfully, we stumbled into the personal finance community of bloggers.
To say that personal finance bloggers saved us from financial ruin is…well…completely accurate. There are literally thousands of bloggers out there on their own personal, debt free journeys who shared their stories, tips, tricks, and strategies and we read ’em all (or at least as many as we possibly could).
It wasn’t enough to read. Oh no. It was time for action.
First, we knew that if we wanted to reclaim our lives, we had to cut the payments. No more debt.
How much debt were we in? Looking back to when we started the blog, we had $204k in debt: the big house mortgage ($155k) and the rest was credit card debt and student loans.
Lots of folks don’t think of mortgage debt as a bad thing, but with our health struggles and our paycheck to paycheck lifestyle, the mortgage was risky. Worst case scenario, we figured we’d have a place to live.
We didn’t love the house we wasted money to remodel, so we put that on the market.
We began drafting plans to downsize, ultimately settling on a .06 acre lot in Lancaster County that was manufactured home friendly.
And then we started tackling our credit card debt. That took several months to pay off as we worked to refine our budget, cut our spending, and increase our income.
Once that was knocked out, we decided to take on a mortgage to purchase the small manufactured home we live in today. And then we paid off that mortgage in one year.
The big house sold a year after we put it on the market, which lifted a huge burden.
After paying off the small house mortgage, our debt was reduced to a handful of student loans from undergraduate and graduate school. One by one, we knocked ‘em out.
Once we paid off one debt, we rolled that payment into the next debt and the next debt.
I can’t really pin down the “strategy” we used, i.e. debt snowball vs. debt avalanche. What we did was some kind of debt snowball/debt avalanche hybrid—I’m going to call it debt snow squall.
Moderately heavy snow payments at times, but then you’re in the clear (at least until you brace the next squall). Short breaks between squalls make the storm/debt bearable.
In the debt snow squall, we paid off debts according to their interest rates, except for the credit card debt. That was first on the list because the 0% interest wasn’t going to be 0% for long.
Once the credit card was gone, we focused on the largest debt, which also had the largest interest rate: the small house mortgage.
And when both mortgages were eliminated, we snowballed the remaining debts with lower interest rates: student loans.
Confusing? Definitely, hence the introduction of the debt snow squall.
Today, we own our small house, which we plan to rent when we start traveling in a couple of years. It’s the first time we can say that we own an asset outright.
This link is to our household budget today, which has discretionary spending we didn’t have before. We cut everything that was unnecessary, a slow process over the last two years since we started our personal finance journey.
The steps to debt freedom are black and white: decrease spending, increase income, and put the difference toward your debt.
But it’s hard to stay committed, month in and month out. We made mistakes along the way.
We spent money on restaurants sometimes out of
We wasted money on road trips buying overpriced snacks at rest stops.
We bought too much stuff from this thing called “Amazon.” (Maybe you’ve heard of it.)
Not repeating those mistakes over and over and over again is hard to do. But that’s why the support and resources from the personal finance blogosphere are so important. It’s because of personal finance bloggers and podcasts that we were able to achieve this lofty goal. This isn’t an overstatement. If it hadn’t been for personal finance bloggers and podcasters, we wouldn’t be debt free.
I’m using this opportunity to thank all of you for being there with us throughout this journey. Throughout the tough times when I complained about mortgages (A LOT) to the awesome times like when we paid off our mortgage.
You all are the reason why we are here today. You weren’t skeptical. You were supportive. We needed you. We needed your support and you responded in kind.
Thank you to John and David for your amazing wisdom and equally amazing and practical tips to get your money situation in check. But above all, you’re great friends.
Thank you to Tai and Talaat. This journey hasn’t been all unicorns and rainbows, which is why your pocast has been so important to me. Hearing the success stories of others kept me motivated along the way.
Thank you to PT for inventing FinCon. You are super nice and your conference helped us connect with all of these amazing people.
Thank you to Our Next Life for being our cheerleaders along the way. 🙂 I’ve got spirit fingers for you when you retire this year!
Thank you to the most groovy couple we know at Freedom is Groovy. Whatever we can do to help make the Junior IRA a reality, you got it.
Thank you to Maggie for everything you did to help take Side Hustle to the next level. We’re forever grateful. Without your input, we wouldn’t have what we have today.
Thank you to Dom for challenging me to change my mindset and set bigger goals. You’re an inspiration to me!
Thank you to Bobby for your constant support along the way. We’re lucky to have friends like you!
Thank you to Mr. 1500 for your 1,500 day goal. Your goal encouraged us to set our own 1,500 day financial independence goal, which we know we’ll hit on May 18, 2019.
Thank you to Femme for bringing together a local FinCon group. I love these opportunities to connect with you and other bloggers!
Thank you to Steve and Courtney for your constant support and encouragement. Every Airstream will always remind me of you.
Thank you to Penny for the endless support and hilarious tweets. Twitter wouldn’t be the same without you.
Thank you to Kim from Philadelphia. You are most awesome!
Thank you to Cait for the shopping ban idea. It really made me appreciate all that we’re so fortunate to have!
Thank you to Ang and Sporty for all the encouragement along the way. I appreciate all the ways in which you challenged me to think (and act!) differently.
Thank you to Steven for making us commit to our FI date and all the support along the way. It’s a little over two years away, but I’m confident we’ll get there!
Thank you to Chris for Retirement Freedom and all the support along the way. We can approach the next phase of our journey to financial independence with confidence.
Thank you to Jesse for the emotional support, I guess…LOL. (You know who you are.)
Thank you to Hannah, FI Big Sky, Jackie, Dylan, Abigail, Jacq, Alyssa, Fervent Finance, Rachel, Janeen, J, Kay, Desirae, Will, Vic, Mrs. Frugalwoods, Steven, Small Steps, Taylor Lee, Chris, Leah, Mr. & Mrs. Budgets, Michelle, Gary, Jennifer, Natalya, Mrs. Slowly Sipping Coffee, Josh, Harmony, Denise, James, Robin, Fehmeen, Sarah, Sarah Noelle, Mrs. Escape, Andrew & Veronica, Bob, Jen, Mrs. Mad Money Monster, Sofia, Taylor, DC, Rose, Sandi, Kate, Amy, Miss GF, C, Mr. Fire Station, Helen, Matt, The Roamer, Alyssa, Ernie, Shannon, Melanie, Jess, Adam, Emma, Brian, Mrs. Paradise, Mrs. Lewis, Noah, Ditching the Grind, Lynda, JH, Kristy, Jessica, The Personal Economist, Mrs. CTC, Michelle, Mrs. Dollar Notes, Carol K, Nicola, Chad, Lynn, Jen, Kyle, Mrs. FrugalEnginerds, Robb, Jennifer, Pamela, Linda, Aliyyah, Kalie, Amber Tree, NZ Muse, The Jolly Ledger, Dames in Debt, Yellow, Julie, Jason, Amanda, Ms. ID, Thias, Dividends Down Under, CK, Latoya, The Practical Saver, Chris, Amanda, Francesca, Mrs. PIE, HackNow RetireEarly, ZJ Thorne, Mrs. Simply Financially Free, Clearwing, EL, Pia, Kate, CJ, Josh, Alexander, Ty, Alex, G, Believe Fire, Jax, Chris, Gundomoney, Andrew, Julie, Aaron, a woman, Matthew, Coral, Debi, wealth from thirty, organic butterfly, Mr. & Ms. Montana, Steve Degener, JB, Guy on FIRE, The Green Swan, Ray Ray, Steven, JT, Dan Kellermeyer, Doug, Josh, Matt, Explore Mountains, Joy, Amber, J. Money, Financial Panther, Save Stacks, Krystal, Ms. Liz, Graham, Megan, Sarah, Dar, Colin, Vicki, Sunny, Mustard Seed Money, Roadrunner, Leigh, Wade, Daniel, Millennial Money, Danny, The Vigilante, Revanche, Toocold, Jana, Jason, Linda Luke, Dani, Andy, Kate, DJ, Gary, Paige, Alexis, Mrs. BITA, Money Corgi, Sabbaticalia, Bellen, Mr. Saturday, Christine, Cathy, Alicia, Mark, Felicity, and Jeff for your support. Know that I read and reread your comments throughout the journey to stay motivated and entertained. Thank you.
There are hundreds more bloggers I’ve connected with, online and offline, who have been influential along the way. Steve. Pat. Sarah. Andrew. Veronica. Laura. J. Money. Literally. Hundreds. More. 🙂 What can I say? I’m a people person and an extrovert!
Quite literally, we crowdsourced our way to debt freedom. Between the books, blog posts, and podcasts, we collected the best advice we could find for the mess we put ourselves in. There is power in this community.
The following is an outline of the stages of this journey, which I hope will be helpful to someone just starting down the the road to debt freedom.
Stage 1: Figuring out we had a problem.
Money problems boiled down to two things: not having a plan for how to spend our time and wasting money to fill our time with useless activities.
– Spent money poorly
– Ate poorly
– Wasted time
Stage 2: Challenging our assumptions.
We can, in fact, live without Hulu and restaurant meals.
– Cut the cord-cutter lifelines – yes, there is life beyond TV/Hulu/Netflix/Amazon
– Stopped wasting money on remodeling a house we didn’t like
– Stopped going to restaurants – yes, really (temporarily)
Stage 3: Getting rid of all the clutter.
– Sold all the stuff we haven’t used in years
– Cut unnecessary activities that consumed our time
– Downsized our home
Stage 4: Getting rid of all the debt.
– Used the money we saved from selling our clutter to pay off debt
– Used the money we saved from downsizing our home to pay off debt
– Used the time we saved by not watching TV to start a side hustle to pay off debt
Stage 5: We can, in fact, build wealth to fund financial independence. (ONGOING)
– Challenging our fears about wealth
– Setting 10x goals
– Give and live