Today I am introducing the new Debt Free Stories series on Centsibly Rich. The series will feature stories of those who have paid off debt and how they did it. No better way to kick off the series than with Ms. Montana from Montana Money Adventures! Not only did her family successfully kick their debt to the curb, they also paid cash for their house, bought rental properties and built a nest egg to boot! Take it away Ms. Montana!
How one family paid off over $50,000 debt and paid cash for their house
When we married, Mr. Mt had $35,000 in student loans, plus over $10,000 on credit cards. He had started a debt consolidation program and was working to pay them down. I had just over $10,000 in medical bills, although I wasn’t aware of that at the time. I thought insurance had paid the bills, and wouldn’t find out till 2 years later that it went to collections.
Our breakthrough moment came when Mr. Mt received the statement that said how much his tuition repayment would be for the next 10 years. I wanted to cry.
Mr. Mt had earned his bachelor’s degree in Social Service Ministry and was planning on being a youth pastor for a few years. That starting salary was a whopping $20k a year. I felt so defeated. How were we going to be able to pay this off and do the other things we had dreamed of? Adopt kids, buy a home, and travel the world.
That first year we were married we moved into a travel trailer help to pay down our debt faster. Our only entertainment was the $1 movie theater, or grocery shopping. We were making slow progress beings we were both still in college. But we had started our journey.
Sometimes you have to look for creative solutions. We found ours at an Army recruiter’s office. The Army would give him the kind of job he was looking for (Chaplains Assistant) and pay off 1/3 of his student loans every year he served. He joined right after graduation.
We saved up every penny we could while he was in basic training. By the time he finished we were able to pay of the remainder of our credit card debt. Things were starting to get better. We thought about buying a home. After having our credit run to be preapproved, I got my first collection letter.
It was a discouraging set back. It seemed like we were really starting to make traction. After a lot of longs talks with the hospital about the confusion and just receiving my first bill 3 years after the fact, they lowered the bill. Thankfully we had enough saved up to cover it.
We were finally debt free, but we didn’t want to stop there. We still had big dreams. We kept saving aggressively. Our coworkers and friends thought all the frugal things were a bit odd. We rarely ate out. We carefully budgeted and tracked every penny we spent. Never went out to movies. While all the other young soldiers were buying new shiny cars, we were buying their older ones. But it was working.
4 years after we married, not only were we debt free but had saved our first $100,000. All our coworkers were either broke or in debt, but we were gaining traction. We adopted our first son. We had a biological child. We moved to Europe, and travel through 27 counties.
It was amazing being debt free. We wanted to keep it that way.
So we set another crazy goal.
Pay cash for our first home.
I gave a personal finance presentation 2 years before we bought our home, and boldly told the audience that we were going to try to pay cash for a home. I had no idea if it could come to fruition. But we were going to do everything we could to get there.
In 2012 we bought our first home, with cash. It was a major milestone. We actually had so much cash left over that we bought our first rental property (we financed 50% of the investment property.)
Owning a 4 bedroom home, and now 2 rentals, we were able to adopt 3 kids in 2015. Of course fate is a funny thing, and that same year we found out we were pregnant.
Being out of debt is an incredible thing. Our fixed expenses per month are about $650. It’s enabled us to live out the life we always dreamed of. We were able to adopt, travel and own a home. Our net worth just blew past 500,000. This year we have been able to enjoy a full year of time off, and took a 6 week road trip.
Advice for becoming debt free
If I could offer any advice to other folks trying to pay down their debt it would be this.
- Live as frugally as possible, while enjoying life as much as possible. There is always a cheaper way to hit the same goal. Be creative. Find fun things to do that are free. Learn 10 recipes with rice and beans. We ate rice and beans every Monday, and it was a great way to try new recipes and save money.
- Don’t feel discouraged if people belittle your actions. We had a lot of friends with big student loans, and told all of them about joining the military. Not a single one liked the idea. When we lived in DC, after we had our first child, we got a roommate. It helped us invest TONS of money. None of our friends wanted to do the same. Mr. Mt never went out to lunch at work, and everyone kidded him. All those little things grew into bigger things. It’s ok if the steps you’re taking seem little.
- It’s ok to dream big. It’s better to be a dreamer than a victim. We have faced a lot of setbacks and obstacles. But those don’t define us. Instead we set big goals, and worked like crazy to get there. Even if we fall short, we are still further ahead than those who don’t try.
I turned 33 this year. Honestly, I never would have imagined how much life we could to squeeze into these years. There is no fancy car or big house I would trade in exchange for all the good things that have happened. Being debt free was the catalyst that helped make it all happen. And I have no regrets about that.