While everyone celebrates debt-paying success stories, many don’t tell you how HARD they worked to get there. Paying off your debts is not easy, as is becoming a millionaire.
It takes perseverance, determination and sacrifice. But the result is worth it. Getting rid of debt is the first step to financial freedom.
That’s why I love Ashley’s story. She made a plan and stuck to it, even through the ups and downs.
Read on to find out how Ashley was able to pay off her $ 45,000 debt in a record 18 months!
Tell us a little about yourself (age, background, family life, place of residence, etc.)
I was a police officer and detective for 10 years before I decided to stay at home with my kids. I am now the head financial coach of Ramsey Solutions and the owner of Budgets Made Easy.
What do you do? Do you have an advanced degree, and if so, do you use it in your work?
I am a financial trainer and blogger. I have a bachelor’s degree in psychology. I started my master’s degree, but did not finish. I have never used my degree directly.
In fact, during the last semester of my undergraduate degree, I decided that I had finished my studies and would be doing law enforcement instead. I originally wanted to be a consultant, but I would have had to continue my graduate studies, and that’s where I ended.
So I never used my degree directly, but it came in handy during my career in law enforcement and in my career as a financial coach.
What is your income if you are comfortable with sharing?
Our family now has an income of about $ 90,000 a year.
Before you embarked on your debt settlement journey, how much and how much debt did you have?
When we started paying off, we had a debt of $ 45,000. Of these, $ 25,000 were my student loans, $ 14,000 were my car loans, and $ 6,000 were my credit card.
Was there a defining moment when you made the decision to live debt free?
The defining moment for me was the credit card. It all started with a 401 (k) loan, which turned out to be a disaster. My husband lost his job shortly after receiving the loan. We were then told that we have 60 days to return the money, but we could not.
This led to the fact that we owed the IRS a lot of money in fines and taxes. To pay the IRS, I used a 0% credit card for 18 months. As soon as I started getting my credit card bill, I realized that I had no idea how we would pay it in 18 months.
This led me to find Dave Ramsey and the snowball of debt. I created a zero budget and got to work. I was able to not only pay off this credit card before 18 months expired, but ALL my consumer debts!
What strategies have you used to pay off the debt (the more details, the better)?
We used the snowball of debt that pays the lowest balance first. So we focused all our energy and money on the smallest debt, that damn credit card. We paid off in just a couple of months.
The next largest loan was a car loan. By the end of the year, we paid for it. I don’t remember exactly how long it took us to pay each one, but we paid by credit card and vehicle in 7 months.
The biggest debt was my student degree loans, which I didn’t even use! It took us 10 months to pay off the $ 25,000 student loan.
The sad thing is that I paid off this student loan almost 10 years before and only paid back $ 3,000! I was making almost $ 5 a day with interest only. The payment paid almost no principal.
Then we started making extra money. My husband worked a lot of overtime and moonlighting. We also sold everything we could. I even sold my wall decor and all the lamps in my house. It looks like we just moved, but paying off the debt was more important to me than these things.
We also sold a trailer and an ATV and of course all the baby stuff that people would buy.
How are you still motivated to pay off the debt? What problems did you face along the way?
I did a few things to keep myself motivated.
I read success stories on debt repayment every night. I also made visuals to track my progress and kept them where I could see them every day.
I joined Dave Ramsey’s Facebook groups to be “close” to like-minded people.
I also listened to Dave Ramsey’s podcast almost every time I was in the car. It was so bad that my kids were crying in the car: “I don’t want to listen to Dave Ramsey!”
I even had people telling me to “stop acting like I was destitute.” But I really didn’t care what anyone thought about what we were doing. I knew that paying off debt was more important to our family and our future.
What has changed in your life after you paid off the debt?
I was able to stay at home with my kids! I couldn’t quit my stressful job if I still had debt. I no longer have to sit in terrible traffic every day, deal with jerks, or see the worst things you can imagine.
I can be here with my kids and live the way I want without the stress of money because I paid off all my debt.
Do you have a budget? Has it helped you pay off your debts faster?
Aha! The budget is your financial foundation. Everything you do starts with your budget. I made a zero-base budget and that was incredibly important when paying off debt.
In attacking your debt, have you focused on making more, spending less, or a combination of both? Why?
We focused on combining it all. I cut everything I could from the budget. I cut my magazine subscriptions, pay radio, dining out, cut my grocery bill in half, and even canceled Amazon Prime.
We worked hard to make more money from part-time jobs and overtime and sell our best.
We even cut pension contributions for a while.
All this helped to speed up the payment of debts by a year! I was constantly using debt snowball calculators and looking at what I needed to add to cut down on my free time. Then I did everything I could to beat that goal.
What advice would you give to those who, at the beginning of their debt repayment journey, are in a similar situation with you?
Create a zero budget and start tracking your spending. I used the monthly budget template and started working on my budget. Paying off your debt starts with your budget. You will be able to see where your money is going.
This will allow you to see where you can save money and cut costs. It’s all about prioritizing every dollar to meet your goals.
In retrospect, what would you like to know before you started accumulating debt? What would you say to those who are just starting their lives?
I wonder if there really is no “good debt”. I wish I knew about all the dangers and problems with 401 (k) loans and that they really are not a good idea.
I would advise beginners to avoid debt at all costs. The only “good debt” is a mortgage, and even that should be limited. Save as much money as possible in investment accounts and pay off any debts as quickly as possible.
Donate now so you can enjoy your life later and do what you really want to do without holding back monetary stress.
Anything else you want to share?
Paying off your debt starts with a budget and a plan. The budget doesn’t have to be something that you avoid or hate.
The budget will allow you to have fun later without feeling guilty. It’s all about prioritizing and letting your money work towards your goals.
A budget is simply prioritizing your money over what matters to you.
Ashley Patrick is the head finance coach at Ramsey Solutions and owner of Budgets Made Easy. She helps families get out of debt with simple strategies so they can be less nervous and live the life they want.