Friday, April 16, 2010

How Our Family Got Out of Debt

3 days ago my husband and I paid off our student loans over 6 years early. With a lot of work, we were able to eliminate our debt while living off of 1-income and raising 4 young children. Other than what we owe on our house, we are now debt free!

Here are some of the things we did to end the cycle of debt:

*My husband made the decision to work on a college degree he needed in order to receive a promotion with the fire department. Although he had college courses, most of them did not count towards this degree, which meant he had to start all over again. The years he spent in school were the hardest years I have ever been through (raising 3 children 3 and under and being pregnant with my 4th. while he was working at least 90 hours a week and going to school full-time).

*To pay for school without creating more student loan debt, (as we already had over $11k in student loans) my husband applied for grants through financial aid. With having such low-income to family size, he was able to not only finish school for free, he also received his books at no cost through the school!

*A family member gave us Dave Ramsey's Total Money Makeover book. Although we had already stopped keeping a revolving credit card debt, this book really gave both my husband and I the motivation to get rid of the rest of our debt. We don't use all the principals in the book, but we have used many of them. Had we not heard about Dave Ramsey, I'm not sure if we would have become debt free as quickly.

*We used our tax refunds towards paying off credit cards, putting money in the bank so we'd have enough to buy food and gasoline without having to use a credit card, and later to start a $1000 emergency fund.

*Once our credit cards were out of the way, we used tax refunds and stimulus checks towards our car loans.

*After my husband finished college and received his promotion at work, (and a raise), we put the extra money towards our car payment and paid the cars off over a year early!

*We made improvements to our house to increase equity knowing we would eventually sell. We used overtime and tax refunds to pay for the improvements.

*Last year, we sold our house and bought a bigger home that fit our growing family of 6. We found a foreclosure and acquired a low-interest rate which meant our new mortgage was not much more than we were paying before for our other house!

*With the car payments out of the way, we started focusing on our student loans. I upped our payments as much as I could, eventually increasing our payment to over triple what was required.

*This year, we put again put a large amount of our tax return towards student loans. We received money from a family member as a gift and put 100% of it towards the loans as well.

*2 days ago, I used savings to pay the remaining student loan balance off! I consider this to be only by God's grace as it would have been very easy to have continued on the path we had been early in our marriage. I'm thankful that he gave us the resources and wisdom to make a change when we did.

I believe the biggest help to getting out of debt is this: don't create more debt! Pay down debt as you can, and little by little you'll get rid of it. Buy only what you can afford right now, and if you can't afford it, don't buy it.

If you haven't checked out Dave Ramsey's site, do it now. The principals he teaches work, but you have to stay consistent. Things don't get better over night, it takes time and a lot of work. However, you can get out of debt. It was possible for us and I believe it's possible for others too.


  1. Its funny you mention all this...we just started Dave Ramsey's Financial Peace University at our church and had a class last night and my husband and I are totally ready and prepared to do what it takes to get out of debt and have a great financial life. Thank you for being honest and you have really encouraged me that it does work! Thanks!

  2. Way to go Morgan! We're Dave Ramsey followers too, and we even teach FPU at our church! We've got one student loan left to go... then we're debt free except the house! The only thing is now we're down to one income, so there goes the HUGE shovel we had, but we'll just keep chipping away at it and hopefully by the end of this year, POOF - buh-bye school debt!
    Great Post!

  3. Freeeeeeedooooooooom! ;)

    We subscribe to a lot of DR's teachings, but not all (we don't keep money in envelopes, for example). The only debt we have now is the remainder of our student loans and our recently acquired mortgage.

    Sounds like you've made some good decisions! Congratulations!

  4. Great post Morgan! We're about to pay off my husband's credit card with our tax return, too, and get new windows for the house to save on utilities (hopefully).

    I also wanted you to know that I nominated you for a Kreativ Blogger Award on my blog:
    You probably have already received this award since your blog is so awesome but I nominated you as well!

  5. Your post is very informative and I think that some are really suffering debt. Thank you for sharing your thoughts about it and I learn a lot from you.

  6. thanks for the tips, we have been trying to do some of these for a while but hadn't put it together as well

  7. We are trying to do the same. My sister just lent me her copy of Dave Ramsey's book and a few dvd's as well. I can't wait to learn more tips for getting out of debt faster!

  8. this is such great news ...congrats to you.

    You will inspire many with this post.

    Be well,


  9. Great advice! Sounds like you have worked hard and made a lot of sacrafices to pay off your debt! After I graduated from college I worked a bunch of extra shifts to pay off all my debt (i didn't have kiddos at the time). I am so glad I paid it off or I probably wouldn't be a stay-at-home mommy now!

  10. What a great post, what a encouragement to sahm's that we can make it and get out of debt on one income!

  11. yeah! Now you can start working on the house. I am going through this right now. Ive paid off alot of debt and am trying to get my husband on board. He is pretty stubborn because he likes to see instant success. This is a long process. Congrats!

  12. That is awesome!! Congratulation! I will be looking into that website for sure. Me and the hubs have made it our goal this year to manage our money better, which would be going good if our cars would stop breaking so we could stop spending thousands of dollars on them. Ugh! I hope I can get some grants for school like your hubby did, Congrats again. Great Blog! I hope you can visit mine at

  13. I know this is late, but I just came across your blog! We just paid off my car & are debt free but the house!!! LOVE DR! Congratulations! If you have time, check my story out at


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