How Were We Able to Pay Off $332,000 in Debt?

We’re often asked asked how we were able to pay off $332,000 in debt in 8 years while saving over 25 times our annual expenses. The answer is we made we made paying off the debt a priority! We literally viewed it like our future was at stake. Do you know why? Because our future literally was at stake! ¬†We knew that if we didn’t fix this problem we weren’t going to have much of a future. At least one that was worth living. And being an indentured servant to Bank of America, Citibank and MBNA for the rest of your life is not living. Jon Gruden, nor anyone else, would be standing there saying, “Pete & Maria, their future’s so bright, I gotta wear shades.”

So how did we do it? Teamwork. When we were first married, we managed money separately. Pete had “Pete’s Bills” which “Pete” paid with “Pete’s Money” and Maria had “Maria’s Bills” which “Maria” paid with “Maria’s Money.” I once heard Dave Ramsey say, “When people are married, the preacher says, ‘And now you are one.’ He doesn’t pronounce you a joint venture.” I specifically put some key words above in quotes so those words would stand out. Did you notice them? It’s not “Pete’s Bills” or Maria’s Money”… it’s OUR MONEY!!!! WE ARE ONE!!! And once we started acting like it and agreeing on common goals and a long term vision, we worked TOGETHER.

Have you heard the analogy of the Belgian Draft Horse? They are the strongest horses in the world. One Belgian Draft Horse can pull 8,000 pounds. But get this, if you put two Belgian Draft Horses together, they don’t just pull twice as much. They actually pull 20,000 to 24,000 pounds. Almost three times as much! Now, here’s the real kicker. If you put those two horses together and actually train them to work and think as one, they can actually pull 30,000 to 32,000 pounds. Almost four times as much as one horse by itself!

So, the key is to work together. Only by doing so can you achieve such a monumental goal as buying back your freedom. Which is exactly what you’re doing when you’re working your way out of debt. But remember, just as unity and teamwork are the keys to success, disunity can disrupt the team due to self-centeredness — and the end result will be that the team loses. Keep disunity on the sidelines by communicating well and having a shared purpose or dream. Unity can only be created when each person is willing to give up their own gain for the good of each other.

4 thoughts on “How Were We Able to Pay Off $332,000 in Debt?”

  1. Coming across this blog was almost like kismet. I lost my job of 24 years a week before me and my fiance closed on our new “older” home. Absolutely terrible timing considering neither one of us had much in savings and each had our own credit card debts racked up. I still have yet to find a job (it’s been 4 months), we’ve taken on more debt because, as you know, buying an older home comes with its needs and now I’m really struggling with the idea that we could be in trouble. I’d love to hear more about how you guys did it. We’re working off just one income currently while I try to find employment.

    1. Joy,
      I’m sorry to hear about your current situation. I can honestly say that there were times that I felt despair and had negative thoughts thinking we were never going to get out of the mess we were in. Reading books like The Noticer and other books that reinforced positivity, and also having a spouse that always supported me and found the brightness in the dark times were huge.
      When we began our journey, we simply knew that we had to get our income up and our outgo down. I worked as much overtime as was approved, did landscaping work, mowed people’s yards and umpired youth baseball games to increase income. I knew working these jobs wasn’t a long-term deal, just a short term fix to get our heads above water. Have you considered taking one or two part time jobs just to supplement your income as you look for your next full time position? Have you ever read Dave Ramsey’s The Total Money Makeover? If not, I’ll send you a copy. Just send me an email with your address. We’re pulling for you!


  2. How specifically did you pay off your mortgage in 8 years? Did you make double payments…? Thank you!

    1. Hi Janice,
      I hope this isn’t too long winded. After we paid off our short term debt we were about $50K underwater on our residence and stuck in a terrible mortgage that was prime plus 2%. No banks would even consider refinancing as the housing market had yet to fully recover. We made it a goal to get Wells Fargo out of our lives for good and never do business with them again. I disliked this company so much that getting them out of our lives was THE GOAL. We reduced our 401k contributions to just enough to get the match and paid off 58K in about a year. We were able to refinance to a 2.5% interest rate with a credit union which reduced our payment by almost half. I increased my 401k contributions up to 15% and we chunked whatever was left over in our budget on the mortgage.
      I will say that automating our budget was one of the keys to our success. By automating, I mean we figured out what our monthly spending was on certain items like gas, tolls, food/household items, personal care entertainment etc. We opened separate accounts with different banks and had direct deposits sent to those accounts for the amounts we budgeted and never overspent on those accounts. For example: gas/tolls, taxes/insurance, food/household items have separate bank accounts with debit cards. For entertainment, vacation, Christmas, car repairs we had envelopes set aside that we put cash into each paycheck. The left over money in the checking account was used to pay down the mortgage.

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