Friday, October 9, 2015

Frugal Friday- How We Paid Off $22.000 in Debt in One Year!

This morning I made a cup of coffee, grabbed my check book and wrote out a check for a whopping $10,627.  I gave my husband a high five and a huge smile because we are now debt free! 

Here is our story about how we paid off over $22,000.00 in debt in about a year.

The mechanic and I were married 6 years ago and I came into the marriage debt free  He was not.  He didn't have a lot of debt, mostly business related, and it was never an issue for him.  He actually had a pretty slick operation going on and I saw no reason to interfere with it. We never combined our bank accounts and he continued to pay  the utilities and I bought the groceries.  When larger purchases were needed we usually pooled our money together for it. 

It started to became a struggle for me at work and Stormy was becoming of age to start home school.  My sweet hubby decided it was time for me to quit my job and come home full time to teach Stormy and lessen my stress load.  We decided that I would stop working as soon as we had all of our debts paid off.  I was ecstatic until we figured out our debts came to over $22,000.00. How can that be?

Turns out it was a combination of many things that just snowballed.  It also turns out that the mechanic's slick operation really wasn't so slick. Let's just say, if you pay all of your bills via credit card, make sure the auto pay for the said credit card is set for more than the minimum payment.  That is all.

I was still motivated.  I could not wait to quit my job and become a stay at home mom.  I attacked the plan with vengeance. 

The first thing we did was transfer all the utility payments over to my debit card.  Next we consolidated under an interest rate that was set at 4.9%.  After that we simply threw every spare penny we had at the payment. We never sent less than twice the monthly minimum and often sent much more.

We let the business pay off our debt instead of building more inventory.  Our eBay store had a few good months and we immediately transferred that money into my account.  Previously we would have used that money to purchase inventory but for this year we only used the inventory on hand.  The Mechanic also sold a couple of cars he fixed up and we sent that money on its merry way.

Living in the great state of Alaska has its perks.  Every year we get a check from them just for being here.  This year was an exceptional year and that was what put the icing on the cake and allowed me to write that check.

It is just as important what we didn't do.  Here is a small list of priorities that we set in order to stay sane.

1.  We didn't listen to Dave Ramsey(or is it Gordon Ramsey? eh, whatever, we didn't listen to either of them) but followed God's plan.  We always gave to the Lord first in tithes and never hesitated to help those that needed help.  I have no doubt at all that the Lord blessed our efforts.

2.   We never compromised on what we believe in.  It is important to us to eat the best food.  By that I mean organic and non-gmo. We still bought grass-fed beef but we bought less of it by spreading one package over 2 meals.
3.  We didn't do without.  If we needed it, we bought it.  If I wanted to take a trip to visit my family, I went. But we did do it smarter.  We shopped around for the best prices and I drove the vehicle that had the best gas mileage instead of what was the most fun or comfortable.

4.  We didn't touch our emergency fund or as we call it the "when the s hits the fan and the world ends as we know it" fund.  Bring on the zombies!  

That's all folks and it is fair to say that I'm lovin' the debt free- stay at  home all day in my pajamas kind of life!

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