Living that Debt-Free Life

Free yourself, like a gazelle from the hand of the hunter,
    like a bird from the snare of the fowler.

Proverbs 6:5

I’ve told you this before, but when Mason and I got married, we had negative dollars to our names.  Student loans and credit cards- ya’ll know this song.  We made our payments, trudged along, hoping to pay off Wells Fargo sometime in our 40s.  And then our friends bullied us into taking Financial Peace University (thank you, friends; readers- consider yourselves bullied) and decided to get Gazelle Intense about living that debt-free life.  We made a lot of sacrifices, worked a few jobs we hated, said no to some fun things (not all, we are but mere mortals), and came out the other side saying “it’s so worth it.”  Friends, I want this feeling for you, too.  You can get out from under those monthly payments and oppressive interest rates.  Here’s an outrageous thought- you can get away from (insert ominous music here) car payments.  For real.  Let’s talk about how.

Define your Why

As with any ambitious, long-term, lofty goal, defining your WHY makes all the difference when mucking it out seems pointless and impossible.  Deciding to go debt-free MUST be about something bigger than “Dave Ramsey told me to.”  For us, it was about freedom.  We were trapped by Sallie-Freaking-Mae and wanted out.  Debt was a barrier to our bigger goals and dreams for life.  We wanted to vacation, be less stressed about money, and give generously without the worm of doubt whispering that we owed Visa that donation.

Organize

Get your ducks in a row so you can shoot them.  Know exactly what your debt looks like.  Make a list of who you owe and how much, the interest rates, and your minimum payment.  Use this form to make it easy.

Craft a plan

The debt snowball worked for us.  It gave us clarity and more importantly, it gave us momentum.  Like rolling a snowball downhill, using this method gives your debt-fighting powers speed and heft.  Here are the step-by-step instructions on how this works.

Side note: you’ve also got to swear on a stack of Bibles and good coffee that you won’t accrue any more debt during this process.  Once your credit card is paid off, cut it up or “put it somewhere safe” and immediately forget where it is.  (Actually, that’s terrible advice.  Don’t lose your credit card.  Just cut it.)

Negotiate

Did you know that you can negotiate debt?  Neither did I until the Internet told me so- you’re welcome.  Our most recent experience with this was the medical bills from a C-section and three days in the hospital (most expensive hotel of all time: 2 stars).  The tactic we used was, “We want to pay you in full right now because we don’t believe in debt.  The full $10-hundred million is a little out of reach for us.  Would you be willing to meet us at $8-hundred million and call it good?”   

Make ruthless budget cuts

Okay, so here’s where things get serious.  This is where you start telling yourself no for a while.  If you want to make real progress quickly, eliminate the things you don’t need: cable, lobster, clothes (check your closet, you’re fine), eating out.  It’s not forever, this is just a season of sacrifice for the big picture.  This is where Defining Your Why matters so much.

This assumes that you already have a budget to cut.  If you don’t yet have a working budget, start here.

Save on necessary expenses

Until we return to the barter system (which you can do in some cases), the goods and services necessary to live still cost dollars.  So, here are a handful of ways you can save money on the things you still have to purchase: coupons, Groupons, clearance, imitation vanilla, off brand groceries (not toilet paper, you’re not an animal), garage sales, consignment stores.  If the thrill of deal hunting gets your blood pumping, this can be a lifestyle.  Otherwise, again, this is just for a season.

See: Your Why.

Establish a reward system

This was so key in our success.  Getting out of debt can take years, guys.  You have got to celebrate wins along the way, or face serious burnout.  Our student loan debt was comprised of 1000 smaller loans.  Each time we paid off a small loan, we rewarded ourselves with the minimum payment of that loan the next month, and then applied it to our Debt Snowball to keep our momentum up.  At first this was a dinner out, or seeing a movie.  Eventually it became camping gear and a desperately needed dining table.  And of course our Debt-Free reward was a (cash flowed) trip to Ireland with friends.  That was my Why.

Here’s a fun list of reward ideas that won’t break the bank.

A word on collections

The strategy we just discussed is designed with active debt in mind.  There’s another strategy to employ if you’re facing bad debt or collections.  Hear me- THERE IS A WAY OUT.  You. Can. Do. This.  I am cheering for you.  Freedom is for you, too.  Check out this video for some advice on your specific situation.

You guys, I know that staring at Debt Mountain is daunting.  But I also know that you can get out of that life.  It’s worth the work.  And you’ve got a foaming-at-the-mouth lunatic cheering section over here.  Like Huskers Student Section nuts.  You’ve got this.  Now get to work (and close that Amazon tab).