How We Paid off over $100,000 of Debt

When we first met, Michael and I both were laden with our exes’ financial faux pas. I hate debt because debt creates poverty in many cases.

After making a huge mistake going into debt when I first starting keeping house, I haven’t since been materialistic enough to go in debt for a lot of possessions. However, as a single mother and trying to support two kids alone with no child support help, there were other things I was snowed under with.

I kept getting hit with unexpected debts that my ex had incurred. When it comes to back taxes the government just TAKES it from you. No questions asked. Tax refunds I was depending on to pay off credit card debts would suddenly disappear.

Then two car wrecks in the same year caused by distracted drivers totaled both of my cars leaving me with major medical expenses for the next 6 years and paying on a brand new car I no longer owned.

Gap insurance? Sphhhh. Unexpected debts were hitting me like hail in a rainstorm.

MONEY? WHAT MONEY?

Michael & Valerie

Right after Michael and I moved into our current house and I posted pics, someone said to me, “Did you marry him for his money?” I just said, “Ha, What?!”

Our house was a foreclosure and the road to buying it was a long one that he and I both worked very hard for.

Let me tell you how this marriage of mine started out

Michael, my husband, (whom I was obviously dating at the time) was living in an almost empty repo house in Fultondale that had not seen an update in more than 40 years.

He grew up in Lewisburg (edge of Birmingham), right up the road from where my mother lives. A, uh-hum, well let’s see how I can describe this in a polite way? — A drug infested inferno. Yes, that about wraps it up. 🤔

He was paying the majority of his income toward alimony, child support, and medical/school support for his kids. Every time we turned around his ex was asking him to pay for something.

On top of that, he had more than $60,000 worth of what was mostly her debts that he accepted as part of his divorce agreement.

You don’t have to be a mathematical genius to figure out if you owe as much as you make each month, this math problem doesn’t work out to the positive.

What I saw at the time was not money, as there was no money to see. What I saw at the time was debt.

We were both so broke while we were dating he used coupons on our dates. C-O-U-P-O-N-S!!! It’s a good thing he was so darn cute and that we matched like two peas in a pod. 😍

While we were dating, would you like to know what did have my attention?

He paid everything he owed every month, EVERY SINGLE BILL; whether he could afford it or not. Even his doctor’s bills were all paid as soon as they came in, even if he had to just make payments on them until they were all paid off.

Even though he carried a lot of debt, I saw a man who worked hard and paid his bills. He would choose to be broke at the end of the month rather than not pay what he owed.

When his two girls called or texted needing something, he was right there providing their needs whether he could afford it or not; even though their mother wasn’t allowing them to have a relationship with him at the time.

That’s integrity, my friends, and that is what I fell in love with. He was responsible and that was extremely important to me because my ex wasn’t.

HOW WE DID IT

Determined to get out of debt we came up with a plan that worked in less than five years.

Step #1: Pay off the house.

Our first home together was a flip house that he already owned. Like I said, it had never been updated so we had A LOT of work to do. I moved in with him and we got married sooner than we had planned so that we could go ahead and get our debt removing plan into action.

We quickly spent all of our extra time making repairs and doing remodeling projects. Our first year of marriage was spent literally on our knees in blood, sweat, and on my part- tears! I would go to bed completely exhausted.

Once the house was sold we paid off about $40,000 of debt above what we owed on the house. Boom!

Step #2: Be frugal.

HIS ROLE:

Pay the immediate bills, don’t kill the kids, and keep the wife from buying shoes.

MY ROLE:

Pay for all of the extra stuff like home remodeling projects, groceries & kids needs, don’t kill the husband for buying another old car, create money-making ideas so we can pay stuff off.

Oh, and don’t buy shoes (I know they’re cute, but don’t buy them).

As debts were stacking up while we were dating, we both realized the need to be frugal while we were engaged and especially after we were married. As soon as we were married, we stopped going out or eating out much and put all of our money into remodeling the house.

Step #3: Pay the smallest debts first.

Once the smallest debt is paid off, use that monthly payment amount toward the next largest debt. Until finally you are left with only your mortgage.

Our first mortgage was so inexpensive, I was able to put all of my income toward debts. This may not be the case with you but I can assure you there is money you can pull from your extra spending if you look closely enough.

Step #4: Create an emergency fund.

I feel that you should have an emergency fund in your bank account- One years worth at a minimum. So, the next step is to bank the money until you have an entire years worth of income sitting in your account.

Then after one year, take the majority of the payments you would have normally been paying toward bills and put it toward the mortgage. Keep a portion of it going into savings.

Determine that you are going to have integrity and pay everyone you owe; even if you have to make small payments each month. Medical debts included.

Step #5: Be a giver.

Make it a habit to give things away. Be on the lookout for people with needs and try to meet them not only to remind yourself that there are other people in this world who have needs besides you, but also because we all reap what we sow.

Step #6: Buy used.

We both agreed that spending a lot of money on things is a bad financial move unless you can pay cash or buy it with equity already in it (a learned lesson from our past mistakes). We sold our newest car and bought a used one. $10,000 worth of debt GONE!

So, we buy used. “You buy used- what?” You may ask? We would buy used everything. Except for personal necessities. 

  • We buy used vehicles instead of new because they depreciate the minute you drive it off the lot. That new car smell is NOT worth it.
  • We only bought name brand where it counts the most. For instance many name brands are made better than generic brands and last longer. In this instance we bought name brand because it was a better investment. When it didn’t count, we bought generic EVERYTHING. Did I just admit that? Yep! Because if you’re in debt you need to get real with yourself and STOP trying to impress the neighbors! Who cares what they think?! They’re in debt too so don’t try to keep up with that.
  • The only home furnishings I normally insist we buy new are the fabric pieces like sofas & mattresses. I like antiques and find great deals on them so most of the wood furnishings in our home are used and were bought at a great price.
  • I buy dollar tree or yard sale items for things that get used by the kids such as the dishes, glasses, or pots and pans. (This is mainly because I have a deep desire to not want to SCREAM when my plates are chipped during chore time). I mean, how do three plates get chipped all at once?! 🤣 If they cost $1, it doesn’t break the bank to replace them and I don’t cry.
  • We sold our newest car and bought a used one with cash, $750 to be exact (Michael drives it every day). $10,000 of debt, gone! I don’t complain about his old cars because sometimes they mean saving us money. 👍
  • We don’t get attached to things. That isn’t what your heart is meant for. There isn’t a thing that I own I wouldn’t part with in a second if it meant I could have freedom in return.

Ways to Make Extra Money

  • Start a side business.

I started my antique business with literally NO MONEY. I began by selling things out of our house. The very first thing I sold was our dining room set. I made $250 more than what I paid for it.

Before long, I was making $2000-$2400 a set and sometimes even more. Each dining room set, living room set, or extra piece of furniture I bought, we used it until it sold until eventually about three years later, we finally kept some of it. 🤪

Each time I made a profit I replaced my furniture and used the profit to buy more items to sell. I eventually had a garage full of antiques and had to put them in a vendors booth to be able to have room for them.

You can literally create a business from NOTHING with the right ideas and know-how. Look around your house, what are you willing to part with? Start there.

  • I clean out our entire house and basement about every six months to a year and post smaller clutter-some items on trading sites to sell them. I make around $300 every time I do this. I take that $300 and reinvest it into my furniture business which multiplies the money.
  • We take the money from our side businesses and reinvest it into our most profitable ventures, like my furniture business for example. It is the most profitable, easy to run business I’ve had to date. It has doubled, tripled or even quadrupled that money.

Ways to Save Money

  • Cut coupons for groceries and eating out.
  • Buy generic.
  • Turn off the television. It not only saves you money, it allows you more time to work.
  • Keep the lights off when you are not using them. Every little thing adds up when you have debt to pay.
  • Stop collecting junk. Stop buying stuff for your house unless you are getting a great deal you cannot pass up.
  • Sell your junk. 90 % of things people own are useless items.
  • Sign up for customer rewards in every venue possible.
  • Make homemade gifts instead of buying new ones. You may find a talent you didn’t know you have!
  • Take advantage of 0% interest credit cards. You can sometimes use them to pay off other debts or credit cards with higher interest rates.
  • I taught my kids starting at the age of fifteen to WORK. They both started their own lawn service and began paying their own way for things like outings & extra things they wanted to buy- which saved me money.
  • Our rule is if you are sixteen years of age, you get a job. They used this income to pay their own car insurance, fuel, and any EXTRA clothing they wanted. We bought them clothing at the beginning of school and then anything extra they wanted throughout the year would come out of their pockets. “Sorry son, mom’s got bills to pay, you want it you buy it,” was my answer. Sound harsh? We paid off more than $100,000 of debts. Do you think that was easy? Kids seriously need to learn to make their own way, it teaches them responsibility which is not only good for us, it’s good for them as well.
  • Once my oldest son started working full-time and when he turned 18 we then made him buy ALL of his clothing and shoes- which saved us money. Just because they live at home, doesn’t mean you have to provide everything for them. Teach them to man up, take care of themselves. They will not have you forever.
  • For my husband and I, we didn’t buy seasonal clothing like most people do. We bought our work clothes, of course, but for misc daily wear we bought the minimal amount needed. He and I would both keep clothes for a long time so we just wore what was in our closets until they were too worn to wear.
  • Apply the 30-day rule. If you want it, wait 30 days and see if you still want it. Then by all means, if it is affordable, buy it.
  • Stick to your shopping list. Strictly.

What it Requires

We worked extremely hard to get out of debt. I am talking working almost 24-7 on remodeling projects, side businesses, and at our regular job. It was well worth it though because now I am currently reaping the benefit of that hard work by being able to stay at home and pursue my writing career.

During the time that I felt like I was working my life away, I would go to bed so exhausted that I wanted to cry…and sometimes did cry. It looked as though the end of all of that debt would never be near. It looked hopeless at times. It looked like we would never make it, that our plan would not work.

Then, suddenly it did work. The longer we paid off debts the easier it got.

One morning we were able to look back at $100,000 worth of vanished debt and smile. We didn’t pick at our debt with an ice pick. We chopped at with a sharpened ax and continued to beat it until it was completely gone!

An ice pick won’t make you very tired. An ax will. So I am not going to sit here and tell you this will be easy if you have a lot of debt to pay.

Now that our bills are paid off we can rest more, take some time off, do a little shopping, and spend time with our kiddos (which is the best part). The freedom we have now is well worth the sacrifice we made to get here.

Oh and by the way, if you looked around my house you would have NO IDEA that I furnished nearly the entire four bedroom, four bath house with estate sales, yard sales, and thrift stores. It is as nice as anyone other house in my neighborhood.

We have worked extremely hard and put in long hours to get out of debt but our thrifty lives turned cash into debt paying power. The only thing we have left is our mortgage and we have a five year plan for that. My goal is to help you do the same. Follow me to see my future posts and I will share our business & debt paying ideas in detail.

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