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8 Things We Did to Pay Off $80,000 of Debt

Photograph by Twenty20

Eleven years ago I started dating a really awesome guy. We spent late nights at Red Robin getting to know one another and managed to complete mountains of homework amidst our blossoming romance. Life was all roses when we were living off student loans! It was an easy and carefree lifestyle. We laughed, loved and assumed finances would sort themselves out in the future. Then we decided to get married, and our financial reality arrived much sooner than we expected.

We married in August, honeymooned in September (thanks to my newly increased credit card limit) and finally assessed our finances that October. Collectively, at 20- and 21-years-old we had accumulated almost $80,000 worth of debt. Worst of all, we were both still in school so that number was growing each and every term.

Seeing that number put strain and stress on our relationship. Money, or lack there of, tends to do that. Through our early money talks, we agreed on one fundamental belief—we didn't want to be tied to debt! My husband and I had grand aspirations for our life together, and debt was not part of it. So, we got to work.

Over the course of three years, we meticulously paid off that $80,000. It wasn't easy and we made many sacrifices. But we did it and are so proud of ourselves for committing to a debt-free life. Financial freedom has opened doors we never would have expected, and now we have new and exciting goals related to our family's finances.

But, back to that $80,000. How exactly did newlywed students pay off that large chunk of change? Strategically, that's how. And, with these eight tips in mind:

Choose a Gimmick-Free Philosophy

Even though we were both business students, we knew we didn't have all the answers when it came to our personal finances. After all, we had found ourselves in a mix of car, credit and school debt so we couldn't be that wise! For us, Dave Ramsey's financial philosophy was the best fit. He doesn't encourage the credit game and preaches old-school delayed gratification. In our fast and furious world of more, more, more we found traditional money advice, like the kind our grandparents followed, to be most sound. So we committed to following his step-by-step philosophy.

Create a Zero-Based Budget

You often hear the phrase, "Too much month at the end of my money!" A zero-based budget fixes that. Every month, before the 1st, my husband and I would assess our income and expenses. Every dollar got a name based on our financial commitments and for us, lots of those dollars went to debt. Before we funded vacations, clothes, movies or eating out, we told our dollars to reduce our debt. And since we are the bosses of our money, they did what we said!

Budget Together

It's very difficult to be successful at finances when flying solo. I truly believe much of our success can be attributed to our team work. When two people are earning money and contributing to the same pool, they need to be evaluating it together on a frequent basis. It can't be up to one person to manage the money. As unromantic as it sounds, many of our early conversations revolved around finances. We chose to act as a team so we could accomplish our mutual goal.

Have Visible Goals

Just the idea of getting out of debt wasn't reason enough for us to stay committed. It sounds nice, but merely "getting out of debt" isn't the most fun life plan when you're in it for the long haul. We needed goals behind our plan and we needed to be reminded of them often. It was part of our budgeting routine to discuss our goals, our whys, and we pinned a printed list near our desk so we could keep the bigger picture in mind. For us, we wanted to own our own home. We also wanted me to be a stay-at-home mom someday so we needed to position ourselves to live off of one income. Both of those goals started with us getting out of debt, and picturing our ideal future kept us moving in the right direction.

Cash keeps our budget in check. And my Target runs within reason.

Get Rid of Credit

The moment we decided to get out of debt, we cut up our credit cards. Every last one of them. And trust me, it was hard to let my Gap credit card go! And my MasterCard that earned double points, eek! But, when the credit crutch was gone, we couldn't use it. Not being tempted to accrue debt was a big part of our plan to get out of debt.

Use Cash

A study of credit card use at McDonald's found that people spent 47 percent more when using credit instead of cash. If that statistic doesn't speak for itself, I don't know what does! So, while setting up a zero-based budget, we analyzed what we could use cash for and what we needed to set up as a debit payment. For many years now we have used cash for all of our food, clothing and personal purchases. We auto-pay our mortgage and utilities with our debit card. Cash keeps our budget in check. And my Target runs within reason.

Work More

During our race to debt freedom, my husband and I both took second jobs. I waitressed two nights a week after my regular 9-5, and my husband started a consulting business. All of our extra income went straight toward debt. We figured that if we had time to lounge and watch TV, we had time to work a little extra.

Decide on Sacrifices

When we buckled down to get out of debt we knew we would be giving up vacations, hobbies and convenience purchases. Mourning that loss and reminding ourselves of the reason behind our sacrifices helped us press on. It was a long road. Sometimes, a sad one. But delayed gratification has been a worthwhile practice for us both, and we're thankful for that priceless lesson. Even now, we are choosing to pay into retirement instead of purchasing the truck my husband wants. Long-term decision making with finances equates to long-term success.

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