Brian and I Are Debt Free

by Kim on September 8, 2011 · 37 comments

I’ve tried to be open and honest about our travel budget.  It’s uncomfortable to talk about money, but when I first started dreaming about traveling around the world I thought it would be absolutely impossible.  I was sure that long-term travel was something that only rich people could afford to do, and I wasn’t rich (I’m still not!).  I’m keeping our budget transparent because I want others to see that saving for a dream is possible.  It takes time and commitment and a bit of sacrifice, but if you are willing to make funding your dream your highest priority you will get there eventually.

Over time, and through a series of small steps, Brian and I have been able to eliminate bills and almost all of our debt.  When we moved to Oregon seven years ago we had less than $1,000.  We lived very minimally at first, but we still didn’t have enough money.  We had to use our credit cards to get by.  In fact, we’re thankful that we had them because we couldn’t have made ends meet without them.

It was at this time in our lives, however, that we decided that as soon as we possibly could we would pay off our credit cards and never use them again.  The way we did this was to start a savings account.  It seems counter-intuitive but by setting money aside, instead of putting as much money as possible towards paying down our credit cards, we were able to create a little “oh crap” fund.  Before, if a tire blew on the car and we didn’t have the cash for a new one we’d have to charge it.  After, we could take the money from the “oh crap” fund instead.  In this way we were able to whittle down our credit card debt and finally eliminate it (it took four years!).  

(By the way, we do still use our credit cards from time to time in order to maintain a good credit rating, but we pay the balance off in full at the end of the month).

Other Steps to Eliminate Debt

At the same time that we were paying down our credit card debt we looked for other ways to eliminate unnecessary expenditures.  We got rid of every single unnecessary bill.  When we finally got jobs we could bike to, we sold the car with the car payment and kept the beater we owned outright.  We put ourselves on a tight budget.  Finally, and most recently, we sold our home.  Each time we were able to eliminate a bill or debt we took the money we were paying and stuck it in our savings account.  Over time the money that we saved each month began to eclipse the money that we spent.

We sold this awesome little car because we had a car payment on it.

And we kept this one.  I don’t have a good photo of it but let’s just say that it has seen better days.  This picture was taken right after someone rear ended me last summer.  Luckily, Brian was able to pretty-it-up a little.  

The key word here is TIME.  This doesn’t happen over night people.  But today, as I was paying the bills, I had a realization:

Brian and I are no longer in debt.

We actually have, in the bank, more money than we owe to anyone else in the world.  We still have student loans, but even with the balance on our loans, we’re still, for the first time in our lives, in the black.  We have no car payment, no house payment, no credit card payments.  We have no consumer debt. We might not have a ton of money but the money that we do have doesn’t have anyone else’s name on it.  

Having financial freedom feels amazing.

I wanted to share with you a little page that stays well hidden on the blog.  I keep a savings spreadsheet on my personal computer that I update each time we put any money into savings.  The spreadsheet automatically calculates the percent we’ve saved towards our total goal.  This is great because even when I transfer $10 into my savings account I can watch the total amount saved go up by 0.02% and it’s quite rewarding.  Saving money is addictive!

Anyway, at the beginning of each month I update our savings total on this page.  Over time it’s begun to tell a story.  You can see our savings grow slowly.  Each month we get 2%-4% closer to our total goal.  You can see where we’ve had setbacks and where we’ve had good months.  Check it out and make sure you start from the bottom of the page!