How We Paid Off $12,000 of Debt in 6 Months

As I’ve watched my wife go through this journey of weight loss and learning how to see herself in a whole new way over this past year, I’ve been struck with the similarities between physical health and financial fitness. Almost everyone is familiar with that nagging feeling of knowing that you’re not the weight you should be or that you haven’t been making the best of food choices. But we lie to ourselves about how bad it really is because denial feels easier than confronting the facts.

The only way to make any progress in getting healthier and starting to lose some weight is to face reality and admit that you must make some serious changes. The same is true for most Americans today and their finances. We have become a financially flabby society. It is so much easier to throw that vacation on the credit card rather than working a few extra hours or cutting something out of your lifestyle for a few months and saving up to pay cash for it. After all, you’ve had a tough year and you really NEED this vacation. You deserve it just like you deserve that late-night trip to the drive thru or that extra cocktail.

In our marriage, Sara and I have always had the head knowledge when it comes to how to be wise with money. Sadly, that hasn’t always translated into our actual decision making. By the end of last year, we found ourselves in a situation where we weren’t investing and basically living paycheck to paycheck with 2 car loans and a total debt of $65,000. And that was with me making a gross salary of $64,000/year. Not good!! To make matters even worse, we live in Douglas County, Colorado which is just south of Denver and housing pricing have been skyrocketing making rent and the cost of living increase much faster than our income and putting us in an increasingly unsustainable financial situation. After going the previous 9 years of marriage without any debt, I found myself in a state of shock wondering what in the world had happened. How could things get so out of hand so quickly?

I knew that financing those cars was dumb. I knew we were living beyond our means. But we did nothing. We stuck our heads in the sand and pretended that somehow things would just “work out”. News flash, you can’t put your debt under your pillow and expect the credit card fairy to come at night and exchange that high interest rate debt for cash!

So what changed? How did we finally get on track with our finances? Well, as our marriage was in complete turmoil, we had to make a choice. Either we give up on our relationship, our money situation and our health. Or, we face the brutal facts and do what it takes to move in the right direction. What was the first step you might ask? I decided to quit my corporate job of course! Nope, that’s not a typo. I quit my job in December of 2016 without another job lined up. You might be wondering how on earth that could ever be a good decision. The truth is that I was too stressed out with everything that going on at work and home to of any use in either of those arenas and my first step in becoming more emotionally healthy was to make a workplace change.

Since I have a wife and two children, I couldn’t simply wait around for someone else to hire me so I started delivering pizza for Domino’s full time and then some. I worked about­­­­­­­ 55 hours/week. It turns out that if you’re willing to do what it takes you can make about $40,000-50,000/year just delivering pizza! Now that’s not life changing kind of money. But it did pay the bills. And because w­­e made serious cuts to our lifestyle at the same time, we still had extra at the end of the month to pay off debt.

Okay, now for the good part….. You decided that you’ve finally had it with being constantly stressed out about your financial future and you want to take control and do something about it! Where do you start? Well, these are 5 key things you need to do to give yourself a financial wake up call and put a plan in place

1.) Define Your “Why”

This will be unique for everyone. The main parts of our “why” can be broken into two parts:

-Invest enough for our kids to go to college (no student loans!)

-Bless people with generous giving

Your “why” may be that you are a two-income family but being debt free would allow one of you to stay home with the kids. Or maybe you want to finally save that down payment for your first home. Truth is, it doesn’t matter what your why is as much as it does just having one. Confronting the facts that you are financially out of shape, or that you really need to lose weight is not fun. And the steps you need to take aren’t exactly pleasant. Each scenario involves tough decisions and serious sacrifice. You need to make sure you know exactly why you are wanting to take control of your money. The tough times will come and when your car breaks down, what is going to keep you from running to the dealer to take out a car loan that will totally derail your progress? (been there, done that, really regret it) That’s what your “why” is for. It needs to be stronger of a motivation than the desire to buy that car, go on that trip, or shop at that store.

2.) Cash Flow Analysis

Okay full disclosure, I’m a finance nerd with a business degree so I love this stuff! Cash flow analysis is just a fancy term for sitting down and honestly looking at exactly how much money is coming in, how much is being spent and where it is going each month. Frighteningly, 7 out of 10 Americans live paycheck to paycheck and chances are, if you were to ask them where the money is going you will hear an answer that sounds something like, “I dunno, it just goes”. That is not okay. You need to know down to the dollar, where each one is going and why. This is the foundational building block to creating a monthly cash flow plan (fancy word for budget) that will be your playbook for winning with money.

3.) Create a Zero-Based Budget

A zero-based budget is the cornerstone of success in your new financial life. If you are married, it is your contract with your spouse. You are agreeing that this will be where you will spend your hard earned money. It’s not always easy to agree on how much to allocate to each category or even which categories to have. Yet another reason you need a very strong “why”.

Contrary to common belief, a budget is not actually restricting. It’s liberating! YOU will now be in charge of telling YOUR money where to go and what to do. Once you are in agreement, you don’t have to feel guilty or stressed out about spending money because the budget told you it’s okay! The “zero-based” part just means that you have to allocate all your money down the last dollar. Every single dollar must have its own destination. No $500 “miscellaneous” funds. That will only give you an opportunity to continue to be financially flabby. You have to be intentional and really take charge, otherwise you will continue to struggle in making progress towards your goals. Admittedly, there are lot of nuances to budgeting and just like anything else that’s new, it does take some practice to get better at it. It might take you 3-4 months to hit your stride and work out all the kinks but the important thing is that each dollar you earn is now serving a purpose.

There are a lot of tools for creating a budget ranging from an old-fashioned yellow pad and pen to sophisticated software that can link to your bank accounts and track spending for you. Just know yourself and use what will work for you. If you’re like me, then a super sweet Excel spreadsheet might be fun and exciting (yes, I just called a spreadsheet exciting, I’m a nerd remember?). But if you’re more like my wife, that is way too annoying to update all the formulas all the time so we settled in the middle and use a budgeting building tool called Every Dollar. Check out or download the app, it’s free!

4.) Build a Starter Emergency Fund

This step is dependent on your current situation. If you don’t have a dime saved up in the bank, then you need to save a “starter” emergency fund immediately. Do not pay anything other than minimum payments on your debts until this is in place. If you already have money in a savings account, brokerage account or something else liquid, then use all of it but your starter emergency fund amount to jumpstart your debt-free journey. (note: DO NOT pull money out of retirement or educational investment accounts as they will be subject to penalties and likely taxes as well).

How much do you need in a starter emergency fund? It depends a little on your situation. Most people should be fine with $1,000. However, if you live on commission only and you know you’re about to enter the slow season for sales, then you may want to bump that up to $2,000. The point here is to have just enough that if a car breaks down you’re not going back to throwing that on the credit card and you also are using as much of your capital as possible to obtain financial freedom as quickly as possible.

Side note: Once you are debt free you will need to revisit this emergency fund and beef it up to 3-6 months of living expenses. You can go over 6 months if you want to, but don’t go below 3. Anything over a year is excessive and you should be using that money for something else such as buying a home or investing.

5.) Punch Debt in the Face

The Bible says, “…the borrower is slave to the lender.” (Proverbs 22:7) In other words, whoever holds your debt essentially owns you and your financial future. Time to change that! At this point you have established why you have had enough of making little to no progress with money, you have taken a close look at exactly how much money is coming each month and where it is going, you created your financial roadmap and compass (your budget) and you have a starter emergency fund in place. You’re ready to really roll your sleeves up and get to work.

If you’re already a grinder then this step won’t be quite as painful. But if you’re used to working a cushy 30 hr/week part time job, buckle up! It’s time kick things into overdrive. You need to list all your debts, except a primary residence mortgage, in order of smallest to largest (something my favorite financial personality, Dave Ramsey, calls a debt snowball). Now you work your butt off with overtime or pick up an additional job(s). You maximize your income and attack the smallest debt with a vengeance and pay minimum payments on everything else. As soon as that debt is paid off, you move to the next debt and continue snowballing down the list, building momentum until you’re free!

My secondary income stream of choice is pizza delivery because I was already doing it full time earlier this year, the schedule is flexible and you can usually make $15-20/hr. Right now, between my daytime finance job and Domino’s, I work something between 55-65 hours/week in a 5-day span which isn’t super fun and I’m usually pretty exhausted by the time my delivery shift is over on Friday night. But I have my “why” and I’m going to do whatever I can to make sure that I’m no longer a slave!

I realize that everyone has a different story with unique situations. That is why I am planning on launching my own personal financial coaching business in January of 2018! Keep that in mind if you’d ever like to work with me. In the meantime, if you have a financial question that you would like answered, I’d be more than happy to respond. Please post your questions in the comments section of this post. Thank you for reading!


Ryan (AKA The Bettered Blondie’s hubby)

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