WE'RE DEBT FREE!!!!!
Alex, Turner and I woke up early this morning and made our final payment to our student loan. We have payed off $45,000 in 3 years. A refreshing feeling washed over us as we let Turner click "Submit", and we squeezed Turner with excitement for the future. We discovered Dave Ramsey a little over 3 years ago, and decided that we were not going to be stuck in the trap of debt. We didn't stick to Dave's plan 100% (we still have a credit card....ahhhh!), but we used his principles. We saved, thrifted, and made sacrifices to throw as much money as possible towards our student loans.
I used to be a spender...a big spender. This process has taught me so much about self discipline, and I do love a good challenge. It was hard to see the light at the end of the tunnel, but we learned it's a slow and steady race. We did try to reward ourselves every once in a while, made a few splurges and went on a few trips.
End of 2011- Read Dave Ramsey's book The Total Money Makeover and decided we wanted to change the way we were spending and living! I had just finished my MBA, and knew I didn't want the debt to linger. We moved to Austin for new jobs!
2012 - Began putting $1,000 a month towards student loans. Found out we were pregnant in February and cash flowed our son's doctor's bills/natural birth (much more expensive than going to a regular doctor....dumb decision on my part).
2013 - Bought our first home, which put a big stop to our saving. When we decided to buy a house, we saved all our money to put towards closing costs. During 2013, we did a REALLY bad job of saving as we spent most of our extra income on house projects. We still chipped away at the debt, but with low intensity.
2014 - Did a better job of saving, found a cheaper school for Turner, cash flowed a vacation to San Francisco and NYC (trip has yet to come), and worked a lot of overtime. In years past we had failed at doing a cash envelope system, but this fall we decided to try one more time! It finally stuck. Spending cash hurts! We found out real quick how much less we could live off of when we spent cash. Most of our income was going to eating out...way too much! We now budget $30-50 per week for eating out, and most nights cook at home (ugh...I hate cooking). We are intentional with each paycheck and have envelopes to save up for future events (Christmas, birthday gifts, vacation, car maintenance, hair cuts, etc.).
The past 3 years while Alex has worked at Apple, he has been contributing 20% of each paycheck towards his 401K, flex spending account for daycare, and his employee stock purchase plan. The biggest contributor towards paying off our debt was our Apple stock. We sold almost $10,000 worth of stock to put towards our debt.
Our next step is to save 4 to 5 months of income, and then we're going to refinance our home to a 15 year fixed mortgage. We'll also be saving every month for our next car (both our vehicles are 94/95 models). The next vehicle we buy won't be that nice, but who cares, we'll have payed cash for it! Our financial journey is definitely not over, and there will continue to be obstacles and sacrifices along the way, but we're ready. We thank God every day for blessing us with a healthy family, great jobs, a home, and teaching us the principles of money. I pray we can help change other people's financial future and help them find freedom in being debt free.