I’m thrilled to share another story of Debt Slayers and Victors! Lady Joanna is a super sweet and wonderful friend I met through Twitter and the Blogosphere and love hanging out with in real life, too. This girl’s got convictions and moxie and I like it. Last year, she blew me away as she and her husband set out on a journey of a No Spend Month during August. She makes me look like a wild spender, Lords and Ladies! Learn from her wisdom and find encouragement that you don’t have to wait until you’re in your 30s to pay off debt. She and Sir Josh are debt free except for their mortgage and still young pups (age reveal at the end of the post).
Hey everybody. So glad you stopped by today. Freedom Friday is when I bi-weekly let you in on how we’re doing with our pursuit of paying off debt. It’s also when many of you have e-mailed me with your story (with either “Freedom in Progress” or “Freedom Achieved” in the subject line) so I can share your story to encourage others, too.
It all started in college. That’s where my husband and I met and fell in love, as young people tend to do. While preparing for marriage, we took a couple classes, and both had sessions about money and budgeting. Talking about money even before we tied the knot was important, and set a good foundation for communication going forward.
 |
| Credit Card “Artwork” at Dave Ramsey’s Financial Peace Plaza |
We come from very different money backgrounds- I have a father who climbed the corporate ladder, and I grew up comfortably in the suburbs with a stay-at-home mom. I learned about saving and giving and investing from an early age. I remember my parents paying off our house when I was just starting junior high! My husband’s family, on the other hand, struggled to make ends meet through much of his childhood and adolescence. He saw his parents work hard, make sacrifices, and live very, very frugally. They’ve struggled with credit card debt mostly due to health costs. We brought together these very different backgrounds and taken lessons from both: stay out of debt, work hard, live below our means, save, give.
When we got married in June 2006, we thankfully had two paid-for cars, no credit card debt, and an exceedingly-normal amount of college debt, from my husband’s state school- about $20,000. About $4,000 of this was a bank loan rather than a government loan- which means it was closer to a 9% interest rate rather than the government’s 3%. As soon as we could get settled and muster the savings from our entry-level paychecks, we paid back the $4,000 loan, because we had done the math and knew the loan would cost us thousands of more dollars if we just paid the principal.
I became a big believer in a budget, and Dave Ramsey’s cash system worked for us. We paid extra toward the school loan, but wanted to save up a down payment for a house, too. When we had $10,000 saved toward a house, we began house-shopping, and ended up buying in October of ’07. Was it the right choice to buy a home, with outstanding debt and less than a 20% down payment? Maybe, maybe not, but we bought conservatively, and weren’t stretched thin. We still had room in the budget to tackle Debt.
After the first of the year in 2008, we started aggressively paying off the remaining school loans. We sent extra principal payments with our monthly payment, and saved an extra fund on the side. Family members and even a financial-advisor friend thought we were crazy for paying off such low-interest debt, but we were determined. We became non-mortgage-debt free in July of 2008, just over two years after we graduated!
So, what now? We rewarded ourselves by saving up for a trip to the place I spent part of my childhood- Hawaii – in February ’09. Since then, we’ve been socking away money toward a hefty emergency fund, and just completed our 6-month emergency fund last week! If we were to both lose our jobs, we’d be able to get by living (frugally) on savings alone for half of a year. Not bad for a couple 26-year-olds.
Next up: Mortgage and home improvements. This one will take a while.
WOW. All I can say is WOW. Non-Mortgage-debt free with a 6 month emergency fund and cash paid trip to Hawaii?! COME ON NOW people, let’s get excited. Everyone give Lady Joanna and Sir Josh a big HUZZAH! They have lived like no one else and now they can give like no one else because that’s simply who they are. The Money Saving Lords and Ladies in the court of the Queen of Free salute you! And the Queen strikes a Wayne’s World-esque “We’re not worthy” pose. Thanks for sharing your story.
I’ve heard a rumor that the King of Free is stopping by next week to share a bit of our story from his angle. I don’t think you want to miss that one.
www.queenoffree.net
