Avoiding Debt

This is What Crushing $109,000 of Debt Looks Like

We paid off $109,000 of debt

I’ve noticed that people tend to glorify their debt-free journey.  Making it seem like a good time, I even saw a post relating it to visiting Disney.

Well, now that I think about it… paying off debt is exactly like a trip to Disney.  It’s filled with sweaty, angry adults trying to manage situations they wildly regret getting themselves into.

Personally, I relate it to a road trip.  A long, bumpy road trip without bathroom breaks…  It sucks, but it’s a necessary part of a healthy life.  Sorta like a colonoscopy…

man picking up debtLife before our debt-free journey

Life before we decided to kick our debt in the teeth was pretty normal.  We made great money and we owed a bunch of it to pretty much everybody.  We were newly married and incredibly ignorant to our finances.

I assumed my wife was mindlessly spending, and she probably assumed I was a financial dipshit.

Our household income was over six figures and we were sitting on a turd to the tune of $109,000(ish) in debt.  I’m not bragging about our income, if anything… I’m embarrassed we were so financially irresponsible.

The point of my rambling is that just because someone makes great money, doesn’t mean they’re financially successful.

Although we had a huge financial hole to dig our way out of, we were lucky to be equipped with a big shovel.

The good news is that my wife hadn’t beat me to death with her shovel yet, so we started utilizing the steps below to take control of our financial lives.

That’s a shit-ton of debt


By the time my eyes were opened to the fact that consumer debt wasn’t normal, we had amassed a shit-ton of it.  If you aren’t familiar with the term “shit-ton”, it’s equal to 24 metric ass-loads or 1/10th a F**K ton.  It’s a lot.

It wasn’t that we wanted to be in debt, We just thought it was normal.  My mom once told me to “always use the banks money when making a purchase”.  Financial ignorance can be taught just as easy as financial literacy…

After creating a debt tracker spreadsheet, we quickly realized we had a lot of debt…

Our debt was broken down as follows:

  • Vehicles:  $43,340
  • Tractor:  $22,260
  • Student Loans:  $30,300
  • Credit Cards:  $13,450
  • Total:  $109,350 (barf sound)

sad woman with her head in her handsO-M-G we’re so screwed

When staring $109,000 in the face it would have been  easy to just say “we’re screwed” and give up.  After all, ignoring a problem is easy and totally healthy (eye roll).

Around this time, I stumbled upon Dave Ramsey’s The Total Money Makeover.  That booked sucked me in.  Reading it cover to cover in a day or 2.  I got a general idea around his baby steps and pitched it to my wife.

It wasn’t hard to convince my wife to pursue a debt-free life, all I had to do was show her that we were paying out almost $2,000 a month in minimum debt payments.  Imagine a life where that $2,000 a month was actually ours and not being shipped off to a lender.  We couldn’t even fathom it.

If you aren’t familiar with Dave Ramsey, check him out.  He’s definitely in the debt-free niche, and he’s rather… opinionated.  People in soul crushing debt need that kind of direction, I know I sure as hell did.

  Dave has 7 baby steps:

  1. Saving up a $1,000 emergency fund
  2. Paying off all of your consumer debt (smallest to largest)
  3. Save up a 3-6 month emergency fund
  4. Invest 15% toward retirement
  5. Start savings for your kids college
  6. Pay off your mortgage
  7. Grow and share your wealth

dave chapelle holding moneyBaby Step 1(ish)

Baby step 1 made me incredibly nervous.  $1,000 would barely cover a mild emergency…

We had about $10,000 in our savings account and I wanted to keep it there.  Sure, I realize not everyone in debt has that kind of savings, and that’s ok, you can still win at this game.

We owned a home and if anything broke, that $10,000 could cover most emergencies with cash and we wouldn’t need to go further into debt.

Having that extra cash gave me some mental security and I figured using that $9,000 wouldn’t help speed us up THAT much.  More on that later.

If we didn’t have that money saved I highly doubt I would have been willing to prolong the start of baby step 2 in order to save it.  We were just fortunate that we had it and able to start baby step 2 quickly.

snowballWhy the debt-snowball works so well

I don’t think the concept of snowballing payments is new.  In my opinion it’s probably common sense to anyone with any level of financial savviness.

It works incredibly well for a few reason.  For starters, it’s easy to understand.  Just add up your balances, and start paying off the lowest one.  Easy Peasy.

The reason it works isn’t some kind of financial wizardry.

Honestly, it would probably make better mathematical sense to pay off the highest interest rates first (debt avalanche) but, math isn’t as important as emotions, at least not yet.

After all, those stupid emotions are the reason we had all this debt to begin with.

The debt snowball creates momentum because it reduces a large goal down to smaller bite sized chunks.  This creates motivation to chase down the next goal as it doesn’t appear to be THAT far out of reach.

As we paid off each debt, we became more and more intense.  That intensity acted as a catalyst for lifestyle changes.  Those lifestyle changes led to more intelligent financial decisions and ultimately more money to throw at debt and that led to more victories!

It started to turn into something we looked forward to.  Pay day would come and we’d knock down that debt balance and inch closer to the finish line.  It was kind of addicting…

Every Dollar Budget ApplicationBudgeting 101

If the debt snowball is the cake, then the budget is the recipe.  Unless you want to make a shitty cake, you better follow a damn recipe!

Our budgeting evolved over the years.  We began by simply tracking our bill due dates.  It wasn’t a budget, it was just tracking our bills.  Although, it was a start to some tiny level of financial intelligence.

This type of budgeting failed constantly, we weren’t tracking our spending and kept over drafting our account. Oy…

We became frustrated because we weren’t making any progress.  Our first debt payment was just barely above minimum.

The good thing about frustration is that it leads to exploring new ideas.  Enter the Every Dollar App.  My wife and I each downloaded the app, created a REAL budget and started tracking every penny.

Holy shit…  It was really, really hard!!  For starters, having to actually talk about money for the first time with my wife was uncomfortable.

We both had to get past the feeling of answering to each other and just team up to kill the debt.  The goal wasn’t to restrict the others spending, it was to get rid of this financial parasite.

It took us a awhile to nail down how much we actually spend on groceries, gas and other “necessary” items.

If you’re new to budgeting and you haven’t nailed own your numbers, don’t stress.  One of the biggest benefits of budgeting is that you can create a plan that works for you!

It took us about 3-4 months before we had a handle on it.  Even then, we messed up every once and a while.  We’re all human.  Don’t beat yourself up.

ninjaNext level debt assassins

Eventually we got tired of the Every Dollar App.  As I’ve written about before… monthly budgeting just doesn’t work for us.  We get paid bi-weekly and like to budget around each pay day.

Bi-weekly budgeting is so much easier.  You aren’t trying to plan for an entire month, you are just planning for 2 weeks.

This reduces potential budgeting failures, and if you’ve ever had a budget failure you know how aggravating it is.

So, we started budgeting bi-weekly using our own excel form.  When we started budgeting bi-weekly another funny thing happened, we started celebrating financial wins more often and the process didn’t seem so tedious.

Every other Friday became our “high five day”.  I don’t know if my wife ever noticed this but, I’d make her high five me after each debt payment.

We’d complete our budget, plan for the next 2 weeks, take ALL of the remaining cash and throw it at the debt.  Update our debt balance sheet and watch those balances fall [high five].

Hey Dave!

If I ever have the opportunity to talk to Dave, I’d like to get his opinion on this part.  Well, I don’t know if I’d like to get his opinion, I’ve heard him talk to anybody who disagrees with him and he’s sort of a jerk… Either way… I think I have a valid point.

We carried a savings account of $10,000 throughout baby step 2.  We never really needed it, it just sat there for years, comforting my anxieties and accruing massive 0.01% interest… (eye roll)

Once our final debt balance was under $10,000, I planned to pull our savings and pay it off.  Putting an exclamation mark on our debt-free journey!

I’m not arguing with Dave’s methods, obviously they work.  We paid off $109,000 by utilizing his general principles.  I just don’t know that I could have gone years with only $1,000 in our savings account.

The anxiety that would have caused would have been crippling for me.  Having that $10,000 was comforting.  It just sat there, reassuring me that we could handle most emergencies without being forced to open new credit cards and accrue new debt.

I’d argue that it wouldn’t add any time what-so-ever to our journey because it would be used at the END to pay off the last debt.

Sure, our savings account would be diminished at that point but, it would only be that way for a few weeks and then built back up rapidly.  Less time for my brain to conjure up anxiety inducing hypothetical situations.

cat high five womanFinal Round Up

Don’t ever confuse a good income with financial intelligence, they aren’t related… at all.

A strong income fueled our poor buying habits because “we could afford another payment”.

That mentality ended up costing us thousands of dollars a month and years of debt payments. I don’t even want to consider where we’d be if we wouldn’t have dug ourselves into that hole…

Becoming debt-free is an important part of achieving F.I but, don’t be afraid to do it in a way that works for YOU.

Sure, Dave preaches his steps, and yes they work but, not everyone has the same level of tolerance around their finances.

I don’t believe we would have succeeded with only $1,000 in our savings account.  The anxiety that would have caused would have surely led to poor spending habits.

Budget in a fashion that works for your life.  If that’s monthly, great. If it’s bi-weekly or weekly, wonderful.  Do it your way.  Don’t let a blanket statement from an app or financial guru dictate YOUR life.

Create small goals and celebrate them!  Celebrating wins will lead to momentum, and momentum will lead to more victories, which will lead to more celebrations!  Who doesn’t like to celebrate?

Finally, becoming debt-free isn’t easy, it’s a freaking grind that requires a shit-ton of sacrifice and life changes. 

Unless you’re wealthy, you have to prepare for a tedious but ultimately wonderful journey.

I know it’s really easy for me to say this stuff now but, I promise you… once you’re there, you’ll say it too.

How are you attacking debt? Let us know in the comments!!

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10 thoughts on “This is What Crushing $109,000 of Debt Looks Like

  1. I’ve heard the “debt avalanche” called the “economic approach” before because it’s rooted in rational decision-making. As a person approaches repaying financial obligations objectively, the focus should be on minimizing the cost of capital to be repaid. Therefore, paying off the highest-cost debt first (regardless of its allocation in your entire capital structure) is the most prudent.

    I can see the logic in paying off your smallest debt balances first to give yourself momentum. I’ve not had the experience of debt outside of a mortgage at this point in my life so I can’t relate to that feeling. However, if it worked for you and you reached your desired end state of being debt free, then kudos. It’s certainly a way better method than not getting out from under the burden.

    1. I agree. Paying off the highest interest rate makes the most sense. Dave will tell at folks and say “math doesn’t matter”. Ehh… I disagree at this point in my life. You’re right though. Getting out of debt is the goal, in my mind the path isn’t as important if you cross the finish line.

  2. Thanks for sharing so candidly about your journey! I appreciate how you tweaked the program ($10k instead of $1k savings) to work for you. I think that’s the same kind of tweaking that makes it OK to select either Debt Avalanche or Debt Snowball. Avalanche makes math sense, but Snowball makes emotional sense. Depending on what most motivates you, either could be appropriate. My husband and I are using real estate as a key part of our wealth plan, and I prioritize Debt Avalanche when I prepay our mortgages, but there is also a case for Snowball — it’s easier to stay on track, and if you can remove a debt completely in real estate, owning a property outright makes it much harder to repossess (there’s always property taxes but these are typically much smaller than the mortgage payments).

    1. Wow! Real estate is a goal of ours and it sounds like you’re doing awesome! Tweaking things keeps me motivated… maybe I don’t follow direction well lol!

    1. I hear you. His first few steps are solid and they’ve helped millions of people. I struggle with his close mindedness and general “holier than thou” attitude when challenged. Hey, he got me started so, I should be grateful!

  3. I am going through a snowball avalanche combo! I had debt spread across a couple credit cards (interest free balances robbing Peter to pay Paul) and a consolidated loan. I recently took a promotion, moved, sold my previous house, and am in the process of buying a new home. I am using this as my time to reset! I started with the smallest credit card and paid it off first and then attacked the consolidated loan. It wasn’t as economically friendly as they would like you to believe and it was a B%5<# to pay off. Even though I was a year and a half into the loan roughly 30% of my monthly payment was interest (gag). I would have liked to have had a larger down payment on my home but I decided that the high interest on the consolidated loan was more important to attack. I still have a lot of room for improvement, but I have almost 30k less in consumer debt now than I did 14 months ago and I still have a solid down payment for my new home! I am trying to read financial blogs instead of online shopping! Wish me luck!

  4. Very nice! I am impressed with what you have done. My wife and I tackled her student loans when we got married back in October 2016. I wouldn’t call it a shit-ton of debt but it was still $30,000. We managed to may all of it off in 6 months. It felt super nice to do it! I appreciate your story! Thanks for sharing! I look forward to reading more!

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