Updated November 18, 2016

In 2006, we got serious about our long-standing debt and decided to tackle it intentionally. We owed approximately $150,000, including our (then) mortgage. At the time, we were a family of 5 with an annual income of $40,000.

How we got out of debt. Things we did, things we learned.

How we got into debt

Other than our mortgage, the bulk of our debt came from school loans, although some came from my own stupidity…

I had an idea for a business and somehow persuaded my husband to let me “invest” $5000 on our credit card. I was careful not to use terms like “borrow” or “debt.” That business never got off the ground but the debt stuck with us.

The first steps

I resisted tackling our debt for a long time because I thought,

I know what they’re going to tell us. ‘Get rid of cable, eat out less, cancel your gym membership, blah, blah, blah.’

We had already done all those things.

We were living frugally, but we were in a holding pattern. And we weren’t really looking for anything different. We were resigned to a slow crawl.

Somewhere in there I was introduced to Dave Ramsey. We began our journey following his Baby Steps. I am a penny counter so I was absolutely shocked when somehow, in the first month, we “found” an extra $1000 for a baby emergency fund (Baby Step 1). And it was relatively painless.

I was hooked.

You mean we can speed this process up?

In Baby Step 2 (a.k.a. our debt snowball, or, all debt but the house), we paid off $25,000 in less than 2 years. This was the most intense part of the journey. Not only was our income tight, I was going through a very difficult time.

The first $15,000 was paid off a penny at a time. It meant a lot of sacrifice and intentionality. My personal struggle eventually led us to sell our previous home. The amount we made on the sale of that house (about $10,000) got us over the last hump. Baby Step 2 was done.

After selling our home, moving across the country and deciding to settle here in Texas, we bought a modest home. It’s smaller than we’d like, but we didn’t want to get in over our heads again.

Where we are today

We’ve remained debt free (except for our current house, which we hope to pay off in 2016) and we have 3+ months’ worth of living expenses in the bank. Update: We made the final payment on our house on June 16, 2016. We’re 100% debt free!

For most of the last 10 years, our annual income fluctuated between $40,000 and $50,000. Once our children got older and once I felt well again, I focused my efforts on my online business. It has been completely bootstrapped. In the last couple of years, by God’s grace, it has increased our income substantially and accelerated our debt journey significantly until we’ve finally reached zero debt.

Our general money principles & tips

  • Live generously. An attitude of giving instead of getting changes everything. And it’s an absolute blast!
  • Planning is key. Without a plan, money tends to come in and go out unnoticed. I honestly thought I had a great handle on things. Then we started writing things down.
  • Understand the 10/90 Rule. 10% of our financial success is due to our wise choices, 90% is due to God’s grace. Our job is to obey, trust and pray. His job is to make ends meet.

1. Tithe

Call me cheesy or too religious if you’d like, but I will talk about the benefits of tithing until the cows come home.

First, in my opinion, too many people quote Malachi 3:10 and use it in a weird way. They tithe because it’ll get them something (i.e. opened floodgates with blessings crashing through).

This makes me a little crazy.

To me, tithing is about connecting. It’s “putting my money where my mouth is”—a physical reminder I’m gettin’ on God’s bus. Not my own bus. Not someone else’s bus. God’s bus. And He’s drivin’. Yeehaw!

Once I got over letting go of driving my own bus, I could enjoy the ride. The actual money part of it became secondary.

The best part was being on God’s bus. He’s a great driver y’all. The best actually. Because He knows places no one else does.

We give at least 10% of our gross income every month, even when it doesn’t make sense on paper. (Believe me, there were times when it didn’t make sense on paper.) I don’t really know how it works, but God fills in the gaps every time. Try it, you’ll see.

2. Read The Total Money Makeover

I don’t agree with everything in it, but The Total Money Makeover by Dave Ramsey was a huge motivator for us. It’s a quick read and the stories of real people are inspiring.

3. Write and stick to a budget

This is imperative and it doesn’t have to be scary. Use the tools here, here or here.

4. Use the envelope system

Each month, dole out your money to your different budget category envelopes. Once the money in an envelope is gone, you’re done spending in that category.

I’m a computer geek so I must have tried every computerized envelope budgeting system available. Then I found software called Budget. There’s a bit of a learning curve at first, but it’s the best and cheapest software I’ve found that works with the envelope system. We still use it.

5. Follow financially like-minded people

Their stories will inspire you and keep you motivated. Listen to Dave’s radio show (especially on Fridays when people call in to share their stories) or do some googling and find some blogs.

6. Splurge on purpose

Build some breathing room into your budget for feasible luxuries and the well-being of your soul. Total deprivation today leads to excess spending later. My luxury? A slightly higher setting on the furnace.

7. Think upside down

Instead of asking the question, “How much can we afford?” ask “How little can we reasonably get by with?”

8. Model well for your children

Instead of saying, “We can’t afford it,” say, “We’re choosing to spend our money on something else.” The former breeds a victim mentality, the latter, responsibility and freedom of choice.

9. Purge and organize your stuff

First, get rid of stuff regularly. It costs time, money & energy to store it, maintain it and move it. Then, keep it organized so you won’t buy stuff you already own. (Clothes and food in the pantry/freezer are big potential pitfalls here.)

10. Don’t assume

Buying in bulk is not always more economical. Generic brands are not always cheaper than name brands. Eating out is not always more expensive than eating in. Figure out costs per unit or per person to make the better choice.


There are far more spectacular becoming-debt-free stories for sure. But it’s all relative I suppose.

When we started, we were barely scraping by and financial freedom felt like a dream. We discovered it’s not just a dream. With a little sacrifice and creative thinking, it can be a reality.

Here’s my point: just start, then press on.

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