Last week I had a conversation with someone that included this question: “You and your wife are in your forties and are debt-free. My spouse and I are in our thirties and are not on course to be debt-free that soon. How did you do that?”
Maybe this is something you’d like to achieve. If so, I hope these simple tips help.
- Both spouses need to agree on a target.
This may not come naturally. Take some time individually to write up your ideal life/lifestyle. Get back together and see where you agree and where you differ. Compromise on the differences then set up goals.
If you can make this a project you both can work on together, it can be a big plus for your marriage. Often one spouse is a saver and one is a spender. This creates tension. Agreeing on priorities that you both see as important can lesson the tension as you both work toward a common goal.
- Learn to live on a lot less than you earn.
This may require some lifestyle changes. If you really want to be debt-free you’ll find these tweaks are not really sacrifices. Don’t eat out as much. Brown bag your lunches. Don’t pay for cable(at least not premium channels). Spend less time shopping. Take a walk outside instead.
This really is the key. Spend less than you earn. The more creative you get with saving, the faster you’ll be out of debt. Then if you want to get rich, keep up those frugal lifestyle adjustments. You’ll find you’re just as happy. This is really about consciously spending money and time on the things that bring you long-term happiness rather than the mindless consumerism most people practice.
- Aggressively attack the debt.
Now that you’re spending less than you earn, use the difference to attack the debts. Focus on one at a time (usually the one with the highest interest rate). Make it a game to see how fast you can pay it off. After the first one is paid off, you have even more money each month to pay on the next one. You’ll pick up speed with each one.
- Keep at it even when you get pushed off course.
It can be discouraging when an unexpected expense occurs–like a car breaking down or an appliance dies. But don’t let that surprise stop you. It’s only a slight delay, maybe a month or two of extra expense instead of extra debt payments.
You’ve probably heard that commercial airplanes do not go in a straight course from point A to point B. They are not able to keep a simple arc for even a short flight. Airflows push them one way or the other. They have to go around or over storms. They need to avoid flight paths of other planes. Pilots must keep their destination in front of them and continually make little adjustments to bring the plane back on course.
Life is just like that. If you keep your goal in front of you, and make continual little adjustments(and sometimes big ones), eventually you’ll pilot your finances to your destination.
Which brings me to the last tip…
- Have another goal.
My experience with paying off debt was bitter-sweet. While I was elated that we did it, and proud of our hard work and persistence, I also went through a bit of a funk after sending the last payment. Working so hard for so long at a big project like that becomes part of your identity. Without that activity to focus on each month, somehow part of me was missing. When the monster is finally dead, it’s important to celebrate. Then quickly move on to the next quest.
The good news is that ANYONE can do this. The person I was speaking with last week has a higher household income than I’ve ever had. I’m sure they have nowhere near as much debt as we had at various points. If they choose to make financial freedom a goal and stay focused on that goal, they WILL arrive quickly.
Thank you so much for writing about this and being so transparent! I will continue to read all of your posts. Becky is an inspiration to me just with her infectious personality and now you both are inspirations with the way you handle finances too! I’m three and a half months away from being a “Mrs.” and I’m eager to learn all I can about being smart with money (especially couponing) because I will be putting my husband through school the next couple years while still paying off my own school loans. Keep posting and writing you two! People are reading!
Congratulations Stephanie! I remember the days of working multiple jobs as Becky and I worked to help each other finish college. Good for you! You’ll learn a ton through that experience and come out as a better team.
Also, thank you for the encouragement!