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!

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{ 34 comments… read them below or add one }

Michelle @ a whole lot of life September 8, 2011 at 4:38 pm

Oh. My. Gosh. This is so, so inspiring. I can’t wait until I can write the same post on my blog. I’ve read through your archives and feel so empowered by how honestly you have written about your entire process of following your dream. Congratulations to you for reaching (yet another) milestone!

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Kim September 8, 2011 at 7:49 pm

Hi Michelle, thank you so much, that whole comment makes me smile. Here’s hoping that you will soon get to write the same post on your blog!

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Annette | Bucket List Journey September 8, 2011 at 5:19 pm

Congrats, congrats, congrats!!!! What a major accomplishment and inspiration. I can’t even imagine the freedom you must feel and I hope it’s contagious ;)
Annette | Bucket List Journey recently posted..A Romantic Dinner Alone at the BLD | Arizona

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Kim September 8, 2011 at 7:50 pm

Thank you Annette. It does feel wonderful. Mostly, it is very freeing to NEVER stress about money. I grew up in a household where money was very tight and there was always stress. Knowing that there is “enough” is very freeing.

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Amy September 8, 2011 at 5:50 pm

Congrats! It’s an awesome feeling, isn’t it? And I hear you on transparency – I finally just wrote up a comprehensive budget post the other day even though money is a weird subject. But like you, hearing actual specifics was the only thing that convinced me we could do it. I felt like I owed the travel community since other people’s information was so valuable to me. Kudos to you to tracking your entire journey, not just the part when you are reaping the benefits.
Amy recently posted..The Cost to Take a Trip Around the World

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Kim September 8, 2011 at 7:52 pm

Thanks Amy. I’m so glad that you wrote about your RTW cost, I’m going to go check it out right now. As I was starting to plan I searched and searched and had such a hard time finding anyplace that mentioned how much it cost. I think we should all be transparent so that others can follow in our footsteps more easily!

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Carmel September 8, 2011 at 6:47 pm

Oh. my. lord. Are you reading my mind lady?? I was just talking to Shawn about finances. We’ve had a couple of stumbles recently because of car expenses and Shawn taking some time off this summer…anyway, we talked it out and despite our upcoming trip to NY and these budget pitfalls, we are determined to make it work. Things never turn out the way we expect them to, but I told him, I feel like I’m giving 100% and that’s all I can do. I can’t wait to have that debt freedom. Congratulations! You are such an inspiration to me.

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Kim September 8, 2011 at 7:55 pm

Awww, I can’t wait to see you on Sunday! Yeah, you know, there are setbacks and there are unexpected expenses and sometimes you will feel like you will NEVER.GET.THERE (as you know, because I complain about this all the time). The sad truth is that money grows money. In other words, once you have a stack of money to spend on emergencies instead of using a card, then you’ll never have to use a card again, which means you won’t have interest and you will no longer be in that spiral of paying everything to everyone. Save, save, save… even when there is barely anything to save!

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Carmel September 9, 2011 at 11:43 am

I can’t wait either!

Once we’re actually seeing our money grow rather than paying it off, I think I’ll get more excited. I started a spreadsheet awhile ago to show what we’re saving. We bought a CD with our wedding presents last year, so that’s the only thing we have saved technically, but I put it in as a percentage and see that we are 10% of the way there. Makes me feel pretty proud, actually.

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Kim September 9, 2011 at 4:39 pm

You were so smart to do that with your wedding money. 10% is good!!! You should feel proud :)

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Gillian @OneGiantStep September 8, 2011 at 6:52 pm

I love money transparency! If we all talked honestly about it, money wouldn’t have such a hold over us all. I wish, wish, wished people were more transparent when we were planning and I responded by posting our budget for our RTW on our blog.

Transparency = Power
No Debt = Freedom!!!
Yay!!
Gillian @OneGiantStep recently posted..And So It Starts

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Kim September 8, 2011 at 7:56 pm

Gillian… I know I’ve said this before but your blog was the first blog where I actually found a real-life list of expenses. It was BEYOND helpful. You have been a mentor and inspiration to me.

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Matt September 8, 2011 at 8:09 pm

Awesome to hear. We’ll be completely debt free this next month as well. All that is left is $1800 in credit card debt. We owe nothing else. Now we’re just trying to sell the car which we hope will not be a problem as it’s a 2003 Honda Civic with only 39K miles on it. We’ll be on the road soon! Congrats on all the movement you guys have been making on realizing your dreams.
Matt recently posted..5 Lessons Learned From Our First Garage Sale

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Kim September 9, 2011 at 4:35 pm

Wow Matt, congrats! Did you sell your house or do you own it outright?

You’ll definitely be able to sell that car right away!

Can’t wait to read about your adventures… so close!

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Tricia(Geeky Explorers) September 9, 2011 at 6:21 am

Congrats on making such huge adjustments – we too had the period of “if we didn’t have credit cards we would starve”. Over the years, we’ve paid off everything (except my pesky student loan) and did it similar to you. Paid off the cars, sold the house, and started squirreling money away. In less than two months we move into our RV! With low overhead, we hope to get jobs after traveling for 3-6 months on our travel savings (not to be confused with the regular savings & emergency fund!) and continue the savings spree.
Tricia(Geeky Explorers) recently posted..What I can’t throw away…

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Kim September 9, 2011 at 4:37 pm

Damn student loans! Mine is about 4K that I am tempted to just pay off but Brian’s is around 15K… we won’t be getting rid of that anytime soon!

You have very low overhead with the RV! You guys have really set yourself up… yay for you!

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Runaway Brit September 9, 2011 at 7:17 am

Congratulations! I wrote a similar post not long ago about how I had overcome debt and I can fully appreciate the relief that you feel. Being in debt is a terrible burden and nothing can beat the feeling of paying it off.

Enjoy your new-found freedom :-)
Runaway Brit recently posted..Chilling in Colonia Del Sacramento

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Kim September 9, 2011 at 4:37 pm

Thanks. It also feels great to know that if something comes up we can deal with it financially, you know? I guess unless it was totally catastrophic and, in that case, we’ve got other things to worry about.

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twoOregonians September 9, 2011 at 10:22 am

Well done! So happy for you guys. It’s a brilliant feeling to be freed up from financial chains.

I love hearing about your spreadsheet efforts and progress monitoring, too. That boost of encouragement when it ticks forward – even by %0.02, as you say, is such a motivator. I have a spreadsheet tied directly to the number of hours I spend at work and on freelance gigs – it helps keep me on task when I’d rather be trip planning – or reading travel blogs ;)

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Kim September 9, 2011 at 4:38 pm

Oh lord, I would hate to know how much time I spend trip planning and reading travel blogs! You are brave to track all of that via spreadsheet!!

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Darcy @Sustainable Family Finances September 9, 2011 at 12:51 pm

Congrats! Way to challenge the American norm of living in debt. Nice to be lucky enough to have credit, but smart enough to not use it :-)

Darcy

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Kim September 9, 2011 at 4:39 pm

Hi Darcy! I like the way you put that. Thanks for your encouragement.

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PostcardFromBK September 10, 2011 at 1:55 pm

This post deserves a high five! We were also down to just student loans before we left and it’s great feeling to have. Congrats!

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Kim September 10, 2011 at 3:50 pm

Thanks! Congrats to you too. Now if we could just figure out a way to pay off those student loans…

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Amy C September 14, 2011 at 10:23 am

Congratulations you guys! Getting out of debt (and staying there!) is tough. Kudos to the hard work, sacrifice and commitment y’all show.

My husband and I are currently traveling around the US (and parts of Canada) and didn’t save anything, but rather kept working (part time), while paring our expenses down.

There is an assumption I think a lot of people have that traveling and living on the road is often cheaper, but for us, it hasn’t turned out that way. We’re still able to save a little, but the expenses have simply changed (more gas, more dining and groceries, less rent, utilities).

I totally admire your planning and diligence. :) We were more naive and optimistic, but it’s turning out pretty darn well.

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Kim September 15, 2011 at 8:08 pm

Thank you Amy!!! In some ways, I think we are overplanning, but at the same time being jobless and paycheck less is a big deal so I’d rather be overplanned than underplanned. Sounds like you guys are making it work!

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Amy September 15, 2011 at 7:57 am

Come manage my money!!!! Thanks for re inspiring me.

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Kim September 15, 2011 at 8:10 pm

hehe, I would love to! It’s so fun for me :)

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Miel September 17, 2011 at 8:57 pm

Excellent job! Great post, and very inspirational. I agree with others in that I love money transparency. I also appreciate the value of achieving dreams through setting goals, it is actually so much easier than it seems, but takes diligence and dreaming in the first place!

Congrats!

Miel

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Kim September 18, 2011 at 8:22 am

Thanks Miel!

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Dani | Globetrottergirls September 22, 2011 at 11:22 pm

Congratulations!! That’s a huge milestone. It must be so relieving to get rid off all these payments – I hate being in debt (it causes me sleepless nights knowing I owe money to anyone) and usually don’t use credit cards anymore at all, and if so, pay them off right away. I hope you two reach your savings goal soon and finally start your trip :)

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Kim September 23, 2011 at 4:48 pm

Debt is the worst, I don’t ever want to go back! We’re telling ourselves now that if we ever want to own a house again we will wait until we can buy it with cash. That’s the way it should be, right? If you don’t have the funds don’t buy it.

We are on track to leave at the beginning of June next year… still 9 months :( so hopefully time moves quickly!

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lana September 26, 2011 at 5:50 am

Everyone needs to read a success story like this! It feels unbelievable to be out from under someone else’s thumb! I share your joy and I know exactly how addicting saving can be! My hubby and I just paid off the FINAL school loan yesterday. I wanted to cry because I had never before felt so free.

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Kim September 26, 2011 at 12:22 pm

Wow, three cheers to you for paying off that school loan. I’ve got to say that we’ve got awhile before we can celebrate that, but even getting rid of all debt besides those students loans feels great. You must feel amazing!!

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