Welcome back to another week of The Teacher’s Salary series.
Click HERE to see links to some of my previous posts from this series.
Today’s topic is Debt-Free Living and has become something that really excites me! I’m convinced that this is one of the main ways that we are able to live on The Teacher’s Salary. Since Kev’s paycheck is modest, it’s important to us that every penny of it goes towards our current living expenses or either building wealth and saving.
A Little Background
For as long as I can remember, I’ve never liked debt. There is something about owing someone money that has always bothered me, even if it’s a minor amount. Maybe it goes back to when I was in a fender bender my sophomore year of high school (my fault). My mother required I give her every single paycheck from my summer job in order to pay her back for the repair bill at the body shop. I definitely understood her reasons behind it, but it was terrible having to hand over my paycheck on payday. It took me the entire summer to pay her back.
When I first discovered Dave Ramsey, one of the topics that really resonated with me was his stance on debt. He is so passionate about it that it’s actually Baby Step 2 of his Seven Baby Steps to financial peace. It really clicked with me that you can’t maximize your efforts to build wealth if you are constantly paying other people for past purchases. Needless to say, I was pretty quickly on the bandwagon to becoming debt-free myself.
Our Journey to Become Debt-Free
At that point in our lives, we were very blessed to have a relatively small amount of debt. My parents blessed me tremendously by paying for my college education. The Teacher paid for the majority of his schooling using the G.I. bill benefit from his service in the Marine Corps. He graduated from college with very little student loan debt. Other than a small car payment and school loan, we weren’t in terrible shape. I realize not everyone is this fortunate.
As Dave Ramsey suggests, we focused any extra money we could onto paying off the smallest of the debts first. We still paid the minimums on everything, but any extra went to our smallest loan. This is what Dave calls the debt snowball. The idea is that you gain momentum as you see progress and are more motivated to pay off the larger ones. I found it to be very true in our case. We were able to pay off The Teacher’s student loans relatively quickly. It helped that we were both working full-time and we did not have children. Then, we moved onto paying off my car early.
In our case, becoming debt-free wasn’t excruciatingly hard as it is for some people. Our debt wasn’t enormous we were in a good position to focus our efforts on it. It was sometimes tempting to splurge on things like vacations or expensive new clothes since we were both working, but we kept creating and working our monthly budget so that we could put as much money towards our debt as possible. Dave had influenced our thinking enough that we made paying off our debt a huge priority in our spending habits. As I recall, we even put some of our Christmas, birthday, and tax refund money towards our debt during that time.
I wish I could say that it has been easy to stay debt-free, but it hasn’t been. We did well for a while, but we incurred some unforeseen debts when we first purchased and renovated our current home. We spent a year paying it off as quickly as possible. It’s a really long story, but needless to say, I’m even more convinced that living debt-free is a must for us. Trying to pay off debts as a single-income family has been tough and took us much longer than when we had two incomes.
I tell you that story to remind you that it doesn’t stop with getting debt-free. You have to work hard to stay debt-free. Sometimes surprises come up, but hopefully your emergency fund will help absorb those things so you can avoid incurring debt. It’s better to pay back your emergency fund at zero interest than to pay back someone else.
The good news is that as of this month, we are now back to living debt-free and focusing on other Baby Steps.
Living debt-free is such a wonderful feeling and something I would encourage everyone to work towards. I know every situation is different and I understand that there are some situations where debt is simply unavoidable. However, I would encourage you to make changes (even drastic ones if necessary) in your spending habits so that you can not only live debt-free, but put yourself in a position where emergencies will not cause you to become riddled with debt yet again.
If you do end up in debt after once being debt-free, just remember that each day is a new beginning. With hard work, it is possible to become debt-free again, so don’t loose heart and beat yourself up too much. If you find yourself in this situation, just go back to the drawing board and work on a plan to pay down your debt as quickly as possible. Once you’ve paid off your debts for the second time, I can almost guarantee your desire to live debt-free for life will be solidified even more!!
Do any of you have any tips for becoming debt-free or staying debt-free?
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