We started this blog to show that normal everyday people can become free from debt by hard work and careful planning, without inheriting large sums of money along the way. We got to where we are today without getting lots of help from our families who both struggled financially. When we started our new life together we were still both attending college. We were both working as many hours as possible while attending classes full-time. One big help we did get along the way is our Aunt and Uncle rented a single-wide trailer to us for around $150 a month. That allowed us to have extra money to help pay most of our tuition along the way. When we finished up our undergraduate programs we were carrying about $15,000 in student loans. After graduation, we were both very lucky to get positions in our fields right away, although we did have to relocate. One job even gave a sign on bonus of $10,000, which we used to purchase a single-wide trailer for about $17,000. The trailer was located on a rental lot. Because our housing expenses were so cheap we were able to pay off both the trailer and the student loan the first year after graduation.
We lived in that trailer for our first five years in our new location. We were able to purchase a used SUV and save for a twenty percent down payment on a new home in that five years. When we bought our new home we borrowed about $140,000 with a 30 year loan. We also had to purchase a new vehicle not long after moving into our new home. We borrowed approximately $20,000 for five years on the vehicle.
We were now in more debt than anytime in our lives. One thing we learned real quick was that we didn't like having to shell out over $1,500 a month just to pay for a place to stay and a way to get around. We started looking a how much interest we would pay on our home if we didn't pay extra on the principle. We would have had to pay over $100,000 interest if we made our monthly payments for 30 years. This is when we made our decision to create a strict budget and start sending every extra dollar towards paying extra on the mortgage. I took us six and a half years to make that happen. Paying extra saved us over $80,000 in interest. Now, with an additional $700 a month available we applied it towards the auto loan which we paid off early this year making us completely debt free!
We were also able to achieve all of this by not accruing any credit card debt. Credit card debt happens to be the worst debt that one can attain and should be the FIRST thing that is paid off.
Next we will talk about our current financial goals and our plan to reach them.
