Cassie Shepherd

April 14, 2014

WE'RE DEBT FREE!

Last Financial Aid Check
"Give no sleep to your eyes, nor slumber to your eyelids. Deliver yourself like a gazelle from the hand of the hunter, and like bird from the hand of the fowler." 
--Proverbs 6:4-5



This is the summer we were dating and Mitch was living in Cali.
Work as hard to get out of debt as a gazelle works to run from a cheetah. We've followed Dave Ramsey for many years. For date nights, we used to listen to his show. Admittedly, Mitch was always the fan. I would roll my eyes and pretend not to listen. However, the stories shared were depressing, inspiring, and addicting. Eventually, I couldn't help but silently listen; touched by the dedication people made to live free from the bonds of debt.

When we were dating, our first fight was about money. We were living in separate states and I wanted to fly out and visit Mitch. Seeing him would be worth every penny. He wanted me to stay, save the money, and wait a few more months before we reunited. We were almost complete opposites when it came to finances. We had similar end goals. But, I was fine taking ten years to get there and Mitch acted like he'd have a heart attack if it took longer than six months. To this day, we still struggle to find a healthy balance. It is one the most difficult parts to juggle in our marriage, but we've come along way. 

And, just for the record, Mitch ended up buying my plane ticket and flying me out to see him three different times after our fight. :)

We entered into our marriage debt free, but we both needed to make lifestyle changes. I yearned for Mitch to be more financially spontaneous and he wanted to reign in my spontaneity. And, quite frankly, I think we've done a fairly good job at accomplishing both. However, ultimately, we wouldn't be where we are at if it wasn't for Mitch. While I was out in left field, Mitch spent years working hard and practicing healthy financial habits. He's always believed to "live like no one now, so you can live like no one else later."

We worked hard to remain debt free until Mitch started graduate school. Really, we made some crazy sacrifices that were really hard, but totally worth it. When Mitch got accepted into a private University in Georgia it didn't matter how frugal we lived - we were forced to take out student loans. But, we reviewed all of the loan information before we accepted the seat in his class and decided we could make it work.

Technically, the loans started three years ago -- when Mitch started school in January of 2011. Mitch graduated in April of 2013. Our original goal was to have them completely paid off by December of 2014. We dreamed and joked about this since day 1. "How cool would it be if..." But, as our financial situation changed we realized it could be a reality and were pretty confident we could actually have it paid off by July 4. "Independence" Day. The tables continued to turn for the better, we worked a little harder, and were able to reach our goal by the end of March (2014) -- so we like to say we were able to have all the loans paid off within a year of graduation. Oh, and we also threw in having two kids that year. Not bad, eh?

I think that beats the standard 10 year plan. I'm not going to say how much money we were loaned, but I will tell you this - if we had taken ten years to pay off our loans we would've paid an additional $30,000 in interest. In actuality, we paid less than $1000.

I've had a few people reach out to me about some tips or to share our "secrets." I could spend hours going into every little detail and sacrifice we've made, but I'll try to summarize the best I can.

1. Make it a habit. We've created living financially safe a lifestyle. Even though at certain times we had a good savings account or cash flow - we still pretended like we didn't. Then, when times were tough, it seemed like everything was normal. Ultimately what this has done is allowed us to cut corners in one area so we have a little more freedom in another.

2. Live within your means. We've both worked hard to make sure our income is greater than our expenditures. In the five years we've been married, we've had one credit card we use for all our expenses. We've never paid a single penny in credit card interest. We pay in full every month. And each year we get cash-back from the points we've accrued on the card. Our credit card has literally made us money. (BUT, financial gurus would say no credit cards and use a cash system. I agree that this would be the smartest way to go. We could control it, but we've even made a lot of unnecessary purchases simply because its easier to pull out the card.)

3. Pay cash for vehicles. We've never had a car payment. We've driven everything from a sporty red BMW convertible to the crapiest of crap cars with cracked dashboards and a sticky gas pedal. We sold the Beamer shortly after we were married and haven't driven anything too luxurious sense. Just a good car to get us from A to B. In one instance, we purchased a car for $1500 dollars, received a state tax credit on it for $3000 dollars, drove it for two years only paying $0.69 a gallon for gas (while everyone else was paying $3) and then resold the car for $4000. I don't know many people who can say they made money off their vehicles after driving it for two years.

Our BMW on the left and our CNG Cavalier on the right
Our next goal is when: "...the paid off home mortgage takes the place of the BMW as the status symbol of choice."

4. Live modestly. We rented where we could afford and then stepped it down a notch. We didn't pay rent until we were living in Georgia which was about two and a half years after we were married. We lived everywhere from a 250 sq foot studio apartment with no oven to sharing a house with two guys and another couple. And, we lived with family twice. We could've had our own place. We had money in the bank for rent, but we chose not to. In hindsight, I'm not sure I would do this the same though. It was really hard on our marriage - moving so much, not having our own space...it did pay off in the end, but this is probably one of the areas where we needed a little bit more balance. The money wasn't worth the many many many tears I shed during our first two years of marriage.

Our first apartment - the whole 250 sq ft.
Our storage was also our closet, appliance holders, bookshelves, and pantry.
5. Work. Duh. We almost always worked and worked hard. We both worked in the summers. While Mitch was finishing his bachelors, we didn't work during the school year, but we also didn't have to pay rent so we just lived off the savings from the summer jobs. And, I should note Mitch worked really hard long hours in the summer so we could do this. And then when I wanted to finish my bachelor's and Mitch was in grad school, I worked full time and went to school full time. And, my on-line schooling was not cheap. We were blessed and able to use grant money to compliment my school fees. Further, we were especially fortunate that one of the families I worked for as a nanny actually helped pay for me to finish school. Without these two additional resources, I'm not sure I would've been able to finish without taking loans. We were living pretty close to the edge. But, we were blessed and one day we will help someone in the same way.

6. Find balance. We have fun, but we don't go over the top. We go out to eat at least a few times a month, but we try to keep it reasonable. We split meals, hardly ever order soda, watch for deals and clip coupons. And, then occasionally we'll splurge and do a grand night out. We've also traveled through and visited over half of the United States together and been to Mexico twice. Every travel deal has been just about the best deal you can get and, again, we go and have fun, but do our best to stick within a budget.

Traveling

7. Family support. There has been more than one occasion where we've gotten stuck in a bind. It's always been temporary, but we've been able to reach out for support from our family. We've also received gifts and tender mercies from family members which has allowed us to get ahead a little quicker. We've paid for all our expenses with the money we've earned, but we've also had family step in and make things easier in other areas for us. I realize this is unique to our situation. Not everyone has this so its simply another area we've been blessed to have extra support.

8. Education. Mitch chose an educational pathway that pays back. Education can be really expensive and his was a hefty amount. But, he moved right into a job. I am a really strong believer in higher education, but it has to be done smartly. You can really get yourself into a mess. Thats a blog post for another day.

White Coat Ceremony

9. Instead of putting our money into a house first (which is what we would've wanted to do), we decided to put it all into our school loans. We're renting and before we purchase our own place we'll save up and put down money. We're at ground zero and we'll eventually be in debt again for a house, but the nice thing is....we won't have any other payments and both of us will still be working.

This is me and Deborah, one of my many amazing mentor coaches, at the DC health convention.
10. Two incomes. I think this was probably the final thing that really propelled us to reach our goal so quickly. Before I was even married, I knew I wanted to be a stay at home mom, but still be able to work. I chose the social sciences field with the idea that I could get my master's and then work evenings counseling or teaching others. When the opportunity to become a health coach was presented I NEVER thought it would become the career that would allow me to stay at home with my children. The business has been such a blessing in our lives and I am so grateful I can have the best of both worlds -- staying home with my girls while still being able to work part-time. I couldn't ask for more.

As you've read this, I hope you're inspired to work hard to become debt free. I can't emphasize enough how liberating it feels. Mitch and I were never forced into any of our situations. What I mean is that we didn't HAVE to live in a small apartment with no oven or drive a crappy car. We CHOSE to. Our situation has been very different compared to someone who is forced into a specific situation or chooses to live within their means, but still struggles to get ahead because of other environmental circumstances. There can also be other areas like medical or family emergencies that effect others. So, I recognize every situation is really really different. And, who's to say we will be invincible from financial hardships? Something terrible could happen tomorrow and our circumstances would be completely different. But, we do our best not to judge others and I hope the same favor is returned. I've had people say they're envious of our situation, but rest assured it hasn't come without a lot of sacrifice and a lot of tears. I think I cried at least once a week for the first few years of our marriage. It's been a bitter sweet journey and one that still isn't over. But, at the end of the day, I'm glad it's been a journey Mitch and I are taking together. I couldn't imagine a better person to reach my dreams with.

Now, I think I'm going to go do some research on how to call into Dave Ramsey and do a little Braveheart screaming....

1 comment:

  1. My sister Amanda (fellow twin mom) sent me this blog post--awesome! This kind of thing makes me so happy! Way to live within your means and make paying off debt a goal. :) Congratulations on your huge accomplishments!

    ReplyDelete