Our bumpy (but rewarding) road to financial freedom
Photo by Catherine Rhodes Photography
Like a lot of people we know, Tyler and I started our marriage with credit card debt, car payments and a lot of student loans.
Tyler had been working full time after graduating high school, and I had held multiple jobs through college. We were making it by just fine, but neither of us had any money in the bank and a fair amount of outstanding debt; Tyler with about $6,000 in credit card debt, $15,000 left to pay on his car, and me with about $18,000 in student loans.
Because Sara and Bryce (read about their debt-free journey here) had gotten engaged the year before, I knew about Financial Peace University and that my parents would also want us to go through the course. Tyler too was familiar with Dave Ramsey and was on board if it meant he could figure out how to retire early. We ended the classes knowing we needed to dump our debt as quickly as possible. Because the longer it sat there, the more interest was compounding that we would have to pay later.
We got married in May, three weeks after I graduated from college, and I moved into the house Tyler had been renting. It wasn’t an ideal location since we both soon had jobs that were about a 50 minute commute one way. I was eager to move on, out of that house and out of that tiny town that was far away from everything. But the rent was cheap. Really cheap. So we stayed.
That house (and its rent payment) ended up being a huge blessing for us. We got $1,000 into a savings account as quick as we could. Then the first four months of our marriage we were able to completely pay off Tyler’s credit card bill and were making more than the minimum payment on my student loans. We had set a goal for ourselves to be debt free in 12 months, which was totally realistic in our current situation.
Then in September we found out we were pregnant. It was a whirlwind of a month, full of mixed emotions. I was nervous, excited, anxious, but most of all I tried to keep reminding myself to be flexible with the plan and goal I had had previously. So the next few months came, and we kept doing what we had been doing. Throwing every extra dollar we could at my student loan payments. Most months we were paying between $1,000 and $1,500 extra on top of the minimum payment.
We definitely made some sacrifices in order to have that much extra money every month. We stopped eating out, took our lunch to work and stopped buying frivolous things that we didn’t really need. One of the hardest habits for us to break was spending our “leisure” time going to stores. When one of us would say “what do you want to do?” it was such a normal part of our routine for the other to respond with, “let’s go walk around Target.” And inevitably we would ALWAYS leave with a bunch of stuff we didn’t really need or care about. It’s amazing how much money you don’t spend when you just stop going to the store!
Once we started to become a little more aware of how we were spending our leisure time, we got better at making intentional decisions about things we could do that didn’t involve spending money; like riding bikes or a movie night at home.
The new year rolled around, and like any expectant mom-to-be, I started to do some research so I could try to plan and budget for our babies arrival. We decided to add $3,000 to our savings account (bringing its total up to $4,000) just to feel like we were a little more on the safe side. After a few phone calls with my insurance company, I had determined that delivery would cost us $1,000 (our deductible) and then insurance would cover the rest.
We kept full steam ahead paying off my student loans. It was so encouraging to see the amount of interest we were paying each month start to drop significantly. By May, we were over halfway done paying off the principle and ready to meet our sweet baby girl. Joselyn Fannin Zumwalt was born on May 23, 2016 at 4 in the afternoon. She was healthy, and we were happy.
I am so incredibly grateful for having a job that allowed me 8 paid weeks of maternity leave after having Josie. Because of that, we were able to keep attacking our debt snowball for those two months. Because we had paid off so much of the principle in such a short amount of time, we were hardly paying anything in interest anymore.
Then August rolled around and so did the hospital bills. The first ones were for my care, the $1,000 we had expected and were prepared to pay for. I transferred $1,000 out of our savings account and wrote the check, feeling proud that we had the money ready to go. But then more bills started showing up with Joselyn’s name on them. Bills that added up to be about $4,000. After a lot of time spent on hold with the insurance companies and the hospital, I found out that because I was still on my parents insurance plan (since I was still under 26) my insurance didn’t cover Josie’s expenses in the hospital. And her insurance, which was back dated to her birth date, also didn’t cover any of the hospital bills. I just remember feeling so defeated after this news.
It didn’t take us long to realize that since we still had that extra $2,000 in our savings account, we only needed $2,000 more to pay off the hospitals bills. So we took a month and half break from paying extra on student loans to take care of them. While I did have a tiny bit of heartburn for having to pay them at all, it was a pretty extraordinary feeling to know that we were capable of paying for something that expensive without having to use a credit card or opting for the payment plan. We had spent the last 14 months training ourselves for this very thing!
In mid September we picked back up with my student loan payments, with more gusto than ever. On December 23, 2016 our final payment was approved, and it felt like we could finally see the light at the end of the tunnel. We had paid $24,478.41 of credit card and student loan debt in 17 months.
We were in the car on the way to an early Christmas dinner when my final student loan payment got approved!
After the holidays, we had an exciting, but also big decision to make. Tyler’s dad is a contractor and owned one more lot in a subdivision that Tyler and I loved. It was close to both our families and exactly the kind of place we wanted to raise our daughter. So we decided to take the leap and started working on a home loan application and house plans for the house Tyler’s dad would build us.
This meant that we would need to put paying off the car loan that Tyler still had on the back burner. I really struggled with this part of the decision because I like doing things the “right” way. So while this decision did go against the baby steps laid out by Dave Ramsey, we felt like we had a great foundation under our belts for the kind of life we wanted to have. There’s no way we would have been able to even consider purchasing a house if we were still $30,000 in debt and living paycheck to paycheck. We spent the next 10 months dumping as much money as we could into our savings account for our new house.
We moved in October, and by the end of 2017, we were officially debt free (apart from our mortgage). In 2018, we’ve focused our efforts on filling out our emergency fund and paying extra on our mortgage payment every month.
Our first three years of marriage have taught us so many things, but our 17 months of dumping debt have created amazingly important habits for how we want to live the rest of our lives. Habits that I wouldn’t trade for the world. We learned how to truly stick to a budget, how to overcome consumerism and instead purchase with purpose, and finally how to set priorities as a couple to achieve one goal at time.
To us financial freedom is equivalent to financial control. In the early days of making loan payments, I had this overwhelming feeling that I was a slave to my checkbook. It was telling me what I had to do with my money every month. Flying out the window just as quickly as it came in. Do you know that feeling I’m talking about? Ya, that one. Boy does it suck. If there’s one thing becoming debt free has given me, its knowing that I NEVER have to feel that way again. Because I’m in control of my checkbook now, not the other way around.
If you’re ready to find financial peace, I’d encourage you to pick up Dave Ramsey’s “Total Money Makeover” or listen to his totally free podcast. But don’t be overwhelmed or intimidated by the strict plan. Everyone’s situation is different, so assess your’s and then decide what will work for you, using the 7 baby steps as guides, not necessarily hard and fast rules.
If there’s a goal you want to achieve, write it down and share it with someone you love and trust. Accountability is so much easier when you have a partner you know you can rely on. And when you need a word of encouragement, we’ll be here, cheering you on! You ARE capable of achieving financial freedom!