How We Did It – A Financial Freedom Story
By Kyle Osborne, Financial Literacy Coordinator, TS Institute
In last week’s post, I shared with you all the things I did wrong in preparing for college - and for life, for that matter! After graduating from college in 2006, I was $85,000 in debt from student loans. Two years later, I married my wife who was $25,000 in debt with student loans. We were a financial disaster waiting to happen.
I was able to pay off $75,000, save $20,000, buy two vehicles, start a college savings fund for each of our kids, and buy our first house.
It’s important to recognize that the above sentence was not without its difficulties; it took a great deal of work, a lot of tears, and quite a few errors along the way. I know that when we read things like, “I paid off $70,000 in 7 years and…etc.,” we think to ourselves that there’s no way I could never do that. Well you can. Here’s how:
- Write it out. To start, my wife and I sat down and wrote down two things we didn’t want to have any more in our marriage. One was the fighting over finances and the other was debt. From there, we were able to set out to find out how to eliminate both.
- Build that budget. The first step to eliminating our biggest struggles was to operate our finances on a budget system instead of a cash flow system. We were living paycheck to paycheck and not even planning 30 days out what we were going to spend on groceries, out to eat, gas, etc. We were spending what we had and making due. We made a budget 30 days before I received my paycheck and “spent” our money before we received it.
- Find a debt repayment plan that works – and stick to it! What matters most is that you are on the same page about the plan and that it fits into the budget you’ve built. Not every system will work for you. Pick and choose from different sources and make it work for you.
- Don’t beat yourself up when mistakes or failures happen. Give yourself grace. In fact, schedule in time to celebrate the successes that you experience along the way! There was one month where my wife and I ended up $500 over budget. But we didn’t give up! We licked our wounds and pressed on towards our goal of financial freedom. Those happy celebrations help keep the work from getting too stressful or tiresome.
Using these straightforward steps, we have paid off $75,000 in seven years with three kids and an average income of $35,000.
Remember life is a marathon and not a sprint, so don’t forget to enjoy life as it happens. Take it slow, be serious in your efforts, and remember you’re in this this for the long hall – slow and steady wins the race. With a mix of smart planning and strategic savings, you, too, can experience the financial freedom my wife and I have experienced, and celebrate the victories along the way.