That’s right, we paid off all our debt! I know… you’re shocked & probably thinking this wasn’t supposed to happen until December, right?! We still had $5000 (and 28 cents) to pay off just last month (and just yesterday actually) So what happened?
How we did it: Goodbye Baby Step #2!
Well… we still owed $1980 to Jared’s medical debt & $3022.55 to Jared’s last student loan. We got a settlement letter in the mail to pay off the medical for $1188. ($792 discount- like using coupons for surgery! haha) So we paid that with our regular snowball. And then since we have been SO conservative with our money we have been able to pay off all this stuff, well we were also saving behind the scenes too. We had over $5000 saved up for a car and christmas that it didn’t make sense to keep that money and pay toward debt (with interest) than to just pay it off and BE DONE WITH IT! This still leaves me with over $500 to put toward baby step 3. (We still have our complete Christmas fund and since our money is now working FOR us we will have the car fund back up in 2 months if that) I’m telling you, once you start winning with money and making smart decisions it’s life changing. We have so many little cushions anywhere that even if we had an emergency we probably wouldn’t have to touch the emergency fund. BUT NOW, we are DONE with DEBT! DONE with student loans, DONE with that frustration.
|Who We Owe||Total to Start||Remaining Balance||Month Paid Off|
|My CC||$275.70||$0||April 2010|
|Credit Card||$4577.81||$0||October 2010|
|Student Loan #1a||$2625||$0||November 2010|
|Student Loan #1b||$4000||$0||February 2011|
|Student Loan #2a||$2625||$0||April 2011|
|Student Loan #2b||$4500||$0||July 2011|
|Student Loan #2c||$4523.89||$0||July 2011|
|Student Loan #3||$5522.40||$0||Sept 2011|
TOTAL DEBT: $32,357.24
Our Plan: Hello Baby Step #3
We are not stopping here as far as our intensity. We are working hard to stay above water by going full force into Baby Step #3, which is a fully funded emergency fund. Our goal is $25,000 which is ummm…. more on the 6th month side and that’s being VERY conservative. Hey, we’ve been to a low point in our life and I never want to feel that again! That security gland Dave talks about is NO JOKE! Me and Jared are both very excited, but I’m not quite sure it’s sunk in yet. I think we will really be able to celebrate this victory after baby step 3. And if you are a fellow FPU’er then you know exactly how awesome being done with debt is. Someone recently asked ‘yeah but are you REALLY ever debt free?’ Oh yes you can be and we will show you how it’s done! 🙂
We are not calling in to Dave’s show for our debt free scream just yet, but we will let you know in advance when we will be. 🙂
If you are just getting started with FPU or in baby step #2, I got your back! I’m rooting you on and telling you to Go Go Go just like Dave does in lesson 4 of dumping debt. It’s hard, yes, but WORTH IT!!! If you need inspiration & it would help you, go back through my FPU Articles. It CAN be done and it’s right around the corner! We ‘tried’ to do FPU without really doing FPU and that was such a fail I laugh at ourselves! Of course you can go back and read all about how we got started with FPU at the beginning of 2010.
It took us ~15 MONTHS to pay off $30,000 in debt making just over 50K/yr.
And now we can proudly say
WE’RE DEBT FREE!!!!!
7 BABYSTEPS :
- Baby Step #1: $1000 emergency fund ((Can be completed in 1-2 months))
- Baby Step #2: Pay off all debt except the house using DEBT SNOWBALL. ((List your debts in order, from the smallest balance to the largest. The idea of the snowball is simple: pay minimum payments on all of your debts except for the smallest one. Then, attack that one with gazelle intensity! Every time you pay off a debt, you add its old minimum payment to your next debt payments. So, as the snowball rolls over, it picks up more snow.)) ((Avg time to complete this is 18-24 months))
- Baby Step #3: 3-6 months expenses in savings completes your fully funded emergency fund
- Baby Step #4: Invest 15% of household income to Roth IRA’s & pre tax retirement ((You do steps 4, 5, &6 all at the same time))
- Baby Step #5: College funding for your children
- Baby Step #6: Pay off your home early
- Baby Step #7: Build wealth & GIVE!
A huge thanks to:
There are SO many people that have played a part in our success (either monetarily or through words of support) & we are truly grateful that you’ve stuck by us as we’ve accomplished this huge goal.
- First & foremost… God! Our teacher/leader/counselor out of all this mess! 🙂
- My mom & step dad, Sheri & Johnny! For watching Jaidan for free. Childcare is costly & we were able to get better care! For helping us at Christmas time when we could barely afford anything. For the meals that she has cooked us to help stretch our groceries. For running us to one place or another when we needed a 2nd vehicle. For Easter basket goodies for Jaidan and all the little things you do daily!
- Jared’s dad & step mom, Roy & Dorrie! For always giving us things to sell to put the $ toward paying off debt. For allowing us to be on his family plan for our cell phones. Cheap iphones rock! For our birthdays we didn’t have to pay the bill that month. And for being an encouragement to us!
- Jared’s mom & step dad, Kent & Mandi. For letting us borrow their car when we needed a 2nd vehicle! For making us meals and buying some of the stuff we were selling.
- Maw Maw & Paw Paw (Jared’s grandparents) for letting us borrow Paw Paws truck for a few months & the meals she treats us with when we visit.
- My aunt, Cindy for letting us stay with them while vacationing in NY and paying for our hotel room in Niagara Falls.
- The rest of our family that has been there to encourage and cheer us on!
- Tia & Kevin (friends) for helping me get to Houston for my BFF’s graduation & always being an encouragement!
- Matt & Jessie for introducing us to FPU and being an example of awesome envelope users!
- Our fellow FPU’ers continually cheering us on! The Morse family, Barnes family, Kiker family, etc…
- Stephanie (coworker and friend) for giving me a ride to work and saving me from the loser cruiser!
- Public transportation & XTO for paying for and allowing me to ride that loser cruiser. (I don’t really think it’s a loser. :P) Do you know how much we have saved in gas $ from this!?!?
- Melinda (coworker & friend) for taking me home from work on occasion
- Leta & Lisa, for letting us stay with them while vacationing in Padre last summer!
- Jared’s uncle Freddy, letting us stay at his house while vacationing in San Antonio & buying us dinner at awesome chinese! 🙂
- And for everyone that has had a lousy birthday gift… or none at all. It was nothing personal & I will make it up eventually! 🙂
- The Krazy Coupon Lady for teaching me how to use my coupons and get a bunch of stuff for free or cheap and ultimately save money from our grocery envelope every month to put toward debt!
- Everyone that used me for family photoshoots! (Cassie-twice, Renteria family-twice, Southard family, Cate family, Reyes family)
- Ellen & Brad (friend/neighbor) for letting me clean your house and for ALWAYS being supportive and encouraging
- For everyone that has been excited for us and/or started their own journey with FPU through my blogging. I’ve loved the encouragement and the inspiration & I’m so thankful for you.
- For all my friends that I’ve had to ditch any fundraiser/ pampered chef/ jewelry/ scentsy party the past year and a half
- If I left anyone out, just know I’m beyond thankful for you!