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Meet Brian and his family from DebtDiscipline.com and find out how they paid off 109K in 50 months!
1. Tell us about yourself. Where are you from? What do you do for a living if you’re not a full-time blogger? What do you do for fun?
We’re a family of five, including, me, my wife and 3 children, 15-year-old fraternal twins and a 12-year-old son. We live in New York. I work full-time in IT and my wife works part-time in retail. I started my blog Debt Discipline to help keep us accountable while paying off our debt. We are a close family that likes to laugh. We have involved out children in our money discussion once we decided to become debt free.
2. How much debt did you pay off? What type of debt was it – credit cards, student loans, mortgage? How long did it take you to pay off the debt?
We have paid off $109,000 in 50 months. It was all consumer debt spread over 5 credit cards. It was many years of over spending and not having a plan for our money that led us to that point.
3. What finally propelled you into action to become debt free?
In June of 2010, we hit our rock bottom point. We were planning our family summer vacation and came to the conclusion that we had no money to pay for it. After trying to extend credit to finance the vacation and we were denied (best thing to ever happen to us) we realized we made too much money to be living like this and something had to change.
4. How did you get out of debt? Did you use a system like Dave Ramsey? If not, how did you figure out what you needed to do?
I found as much information as I could on-line about personal finance from personal finance blogs and I read Dave Ramsey’s book “The Total Money Makeover” which really made sense to me. I was looking for a get-out-of-debt-free-card, but quickly realized managing money was really all common sense. Having a plan for your money in the form of a budget, spend less than you make. With those principles in mind, we enrolled in a debt management program (DMP) through our local credit union and reduced our interest rates on all of our credit cards and began paying them off. We used the debt snowball technique to help build momentum. We cut up our credit cards and never used them again.
5. What were your top 3-5 ways you cut your budget to pay off debt? Did you take a second job?
The first steps are to understand how much money you have coming in and going out. So we got a budget together in an excel spreadsheet. We evaluated it and began to make cuts. Prioritizing needs over wants, by doing this it, freed up cash to help pay down debt. My wife also took a P/T job to increase our income, which allowed more cash to be thrown on the debt.
6. What are the top 3-5 money-saving tips you used to pay off your debt?
If you track your spending for 2-3 months, saving every receipt you get, gives a good idea where every dollar is going. Little things like coffee, lunches, fast food, etc., add up and can kill your budget. We tried to avoid these things by packing our lunch, cooking meals at home, shopping with a list to avoid overspending and wasting money.
7. For married/partner folk: Who initiated getting out of debt? Did you fight a lot about money when you were working on your debt? How did you resolve the tension and arguments?
I initiated the get out of debt wishes in our house. It was difficult at first, because it required a lot of changes for the entire family. The key is communication. We included our 3 children in the discussion immediately because we wanted them to understand when we said “no” to things there was good reason. The short-term sacrifice was for the long-term goal of being debt free. Once we all understood what debt-free meant for our family, it was easy to work toward it.
8. Who handles the day-to-day finances in your home? How often do you and your spouse/significant other discuss your finances, review your budget and spending?
I used to handle it, but today it’s a joint discussion. We make decision together about our money.
9. What life changing habits did you form while working on becoming debt free that you have stuck with?
Borrowing money. If we want something today, we save for it and then buy it. In the past, we would charge it and then try to figure out how to pay for it.
10. What did you give up to become debt-free? Have you taken up those habits again now that you’re debt-free?
We cut way back on entertainment and vacations during debt repayment. We have a budget item for those things now. As long as we can save for it we enjoy it.
11. Did you change your relationship with money and, if so, how?
Absolutely, we have a plan and purpose for our money now. In the past, it was just spend whatever came in and if we ran out, borrow to cover the shortages. We are done living like that and are teaching our children to have a plan for their money as they begin their financial lives.
12. What are your current money goals?
We are now building wealth and would like to help our 3 children fund College, if that’s the path they choose. Having a plan with our money gives us better choices in the future.
13. What advice do you have for someone who is paralyzed by their debt, but wants to be debt-free?
Stop accumulating new debt immediately and begin working on your plan. They call it personal finance for a reason, what worked best for us may not work for you, but you have to start somewhere. I’m more then happy to help anyone that has any questions.
14. Anything else you would like to add?
My goal with sharing our story and maintaining a blog is to hopefully help someone else out there in need. Since becoming debt-free, I’ve been involved with our local community, school district, as well as my company to help spread the financial literacy word. So, if you need help, please don’t hesitate to contact me.