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From Government Assistance to Debt Freedom

#Debtfree



How it all began...


Financial freedom seemed a distant dream in 2013 when my husband and I found ourselves unable to make ends meet. I'd recently left the workforce to care for our newborn son and a loan against my husband's 401(k) coupled with increased health care costs reduced our household income to a meager $325 a week. Forced to seek government assistance, we were at rock bottom and it was here we knew we needed to make a change.


Unsure of where to start, we began to analyze each line of our bank statement. While taking note of each expense and transaction we noticed a twenty-dollar withdrawal that made all the difference. We remembered we’d been contributing to an outside savings account each month for years. As newlyweds in 2007, a relative approached us about life insurance and setting up a savings account. Reluctantly, we enrolled. We thought it’d be a favor to them, but it turned out to be a lifeline for us. This Ram in the bush, so to speak, immediately taught us the importance of an emergency fund. The account had grown to roughly $2,000 and for months we used it to cover our monthly deficit. Soon after, my husband, a musician began playing keyboard at a local church for a small stipend. We were grateful to have our heads above water but lingering in the distance was the reality of the $110,000 debt we'd accumulated over the course of our marriage.


Surprise, Surprise...


When our son was nine months we discovered we were expecting our daughter. She was one of life's surprises! It was during this second pregnancy that I considered reentering the workforce. I was five months pregnant when I came across a job on craigslist that I thought would be perfect. I applied and received a call for an interview the next day. Being self-conscious about my pregnancy, I decided to wear a size too big blazer. I interviewed and got the job! After receiving the offer, I popped and nothing could conceal the fact I was pregnant. My first day of work I got a few stares but thankfully my employer was more than accommodating.


Mo' Money, Mo' Money, Mo' Money...


My husband and I were overjoyed at the prospect of more income. In fact, we began to think of ways to spend the money before we'd even received a check. Then reality set in. We remembered the stress of not knowing how we'd pay our bills. We remembered the shame of having to redeem vouchers just to be able to afford milk, cheese and baby food despite having a college degree. We remembered the sinking feeling of worry and my growing belly was a constant reminder that'd we'd soon have two children under the age of 2. It was time to go beyond talking about change. Now was our time to act. This is when we decided to do the unconventional; live on one income and pay off our debts in totality.


Ready, Set, Go...


We knew how to get by with little means so though our income increased we didn't adjust our lifestyle. Additionally, my husband found employment with higher pay and a schedule that allowed for him to watch the kids during the day. This saved us over $1,000 in monthly childcare costs. He also found a way to tap into his talents, creating a profitable online business which generated consistent income for our household allowing us to put even more towards our debt.


We began to attack each individual debt starting with the smallest and eventually making our way to the largest, our home mortgage. We were fortunate to purchase a condo in 2009 for $87,000 after the real estate market crash. When we started the process of paying it off the remaining balance was $79,000. As we did with our other debts we began to chip away at it month after month paying above and beyond the minimum payment. Many times, we thought about getting something bigger and better, but we reminded ourselves of our goal and that was to become completely debt free. We stayed the course, denying ourselves of life's luxuries knowing the delayed gratification would one day be worth it all.

In June of 2017, we made our last mortgage payment to become completely debt free after 2 1/2 years of working diligently towards this goal. In reflecting over our experience, there were a few things we did that were instrumental in our pursuit to financial freedom. We share these tips in the post, “5 steps to start your debt free journey.”


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