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Our Get out of Debt Plan: Intro
Confession: I am not out of debt. But we do have a plan, and I want to share with you how you can get your own plan. I want to inspire you that if you have even $50/month (and you probably do!), you can start the process. Every story is different, and this is ours. If you’re willing, I would love for you to take this journey with me! I’m going to walk you through our steps of financial planning and progress, and I hope you’ll share yours as well.
When you have a mortgage (or other large debt), seeing the end of it can start to look like the pot of gold at the end of the rainbow—something you spend your whole life chasing after, but never find. When I first started thinking about living on a budget and paying down debt, I researched a lot online. I stumbled across Dave Ramsey’s site in the midst of this research, where I read stories of doctors, lawyers, and families with two fat incomes. People who were making an average of $100,000+ each year. I read stories of people who inherited $20,000 unexpectedly from long lost relatives, people who had received a new car as a gift, or in some cases even free housing. I read of people who had $35,000 items sitting in their basement just waiting to be sold for extra cash.
They had large resources and many areas in which they could easily cut back.
We didn’t have any of that. We already had a bare bones budget. On his site with all those high-income debt free stories, Dave Ramsey says that becoming debt free is for everyone and not just the rich, so I sent an email through his site with our numbers, hoping he could refer me to a lower-income family who had done it, or give us some tips I might be missing. I never received a reply.
We were stuck, and each new success story left me feeling more disheartened. I could easily see how people making $100,000+ per year could dial back spending and get out of debt. But what about us? My husband’s salary is around $36,000/year before taxes, much less than all the other stories we were reading. Despite seeing the repeated message that “anyone can get out of debt,” I continued to only see stories of people with double our income.
Despite being discouraged, I continued with our frugal budget, and maintained an emergency savings account of around $1000 (funded mostly by tax refund money each year). I thought that was the best we could do and celebrated the fact that we now made our meager budget stretch enough for necessities. This continued for about 3-4 years, but I lost hope of getting out of debt, because we were already living with every dollar accounted for. Throughout this time, finances became a source of constant tension in our family. My husband comes from a family that loves credit cards and never had to pinch pennies. He’s never really had to consider his purchases, so getting used to a frugal lifestyle on a budget was an adjustment for him.
However, when it came down to it, numbers don’t lie. Our bills ate up most of our paycheck and we were left with precious little to live on after that. There was (and is) no wiggle room. We got a breakthrough one night when I was lying in bed, unable to sleep, and pondering our budget. After crunching some numbers in my head, I realized that with SMALL, affordable changes in our budget, we could be debt-free (including our mortgage!), in about 6-7 years! That is what I’m going to share with you in this series, how small affordable changes can make a big difference in debt reduction. So, for anyone who ever wished for a story of how a lower income family can get out of debt, I’m excited to share our journey with you!
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Other topics in this series:
~Debt Discouragement
~Why Debt-free? (What the Bible says about debt)
~Frugal Living (The Grocery Budget)
-Poor is in the attitude, not the bank account.
~Frugal Living (Saving on other expenses)
-Is Frugality Worth It?
~Create Your Own Budget
~Why We don’t use coupons
-Our Snowball Plan (to be debt free in 7 years)
-How we “Found” an extra $190 in our budget
-When Life Throws a Curve Ball (& How we “found” an extra $440 in our budget) (A big move, adding rent to our other bills!)
-Debt Reduction Update (Feb 2013)
(Disclaimer: I am NOT a financial advisor. I am just a mom with a family living on a single income and I want to encourage others that it is possible to live on a tight budget and still have your needs met and be content…and get out of debt! I really hope that our personal budget information will help someone.)
Can’t wait to see how it turns out! My family is a one-income family as well because of health reasons and we struggle to make ends meet.
We are too and it is one income that is part time. We had to move in with his mother to make ends meet. I am a full time student and work part time (looking for full time but it is just not there) adding student loan debt has hard as I can go but this is our future that I am building. I don’t see our lifestyle changing until I have paid off my student load debt and part of my daughters.
Tracy, praying for God’s wisdom and guidance; and peace in your situation. God bless you and your family! What are you studying?
I’m quite sure you will come out of this much wiser, stronger and be able to help and encourage others as a result.
“For the Lord God is a sun and shield:
the Lord will give grace and glory:
no good thing will He withhold from them that walk uprightly.
O Lord of hosts,
blessed is the man that trusts in Thee.”
Psalm 84:11-12
AMEN
Amen, Wendy! Thanks so much for your kind words and encouragement!
Right now I work from home to allow me the benefit of being home with my children but to also contribute to the monthly expenses.
So looking forward to following your journey and getting ideas on how to reduce our debt!
Blessings
Awesome, Kerri! That’s great that you can contribute to finances while staying home! I do a bit of freelance writing, but it’s very sporadic.
Thank you so much for doing this!!!!
I too have wondered how a low income family can ever be debt free. While we do not have a mortgage, we do have a sizeable student loan debt. I’ve listened to Dave Ramsey and thought the same thing: his advice is for families with triple our income. We feed our family of four on around 100 a week. I am wondering how we could even lower that lol!
Can’t wait to read the rest of the series!
Blessings,
Marcia
Marcia, I am very excited to share the rest of the story, and excited for you and others who will be making the journey along with me
I am a single parent with one young adult with a learning disability, i can do it for 100.oo a month, But we both are on a pension and pinch pennies as well, Love checking out discount produce like bananas for a big bag for 99 cents, for lunches and banana
bread as well
Oh! I am so looking forward to the sequel! If there’s a will, there’s a way, especially when we serve a God who can do all things!
Thanks for linking up at Thrifty Thursday!
Thanks, Anna, I completely agree with that statement! Thanks for the encouragement
I’m so thankful that you and your husband have a plan to become debt free – every goal starts with a beginning!
I recently wrote a very similar series, essentially OUR story of how we became debt free (and our income was very similar to yours!).
http://dontwastethecrumbs.com/2012/04/how-to-create-a-budget-1/
My very best wishes for your journey. I look forward to following along!
Great post! I feel strongly that getting out of debt is possible for even those of us with the smallest incomes. There’s always ways to save, always places to trim. Excited to hear how your family does it. Good luck to you.
Okay, you hooked me! I can’t wait to hear more!
Boy is this relevant stuff, Crystal. I think Americans are starting to really think through our debt problems after all the problems of these last few years. And getting out of debt is so important in being a good steward of God’s resources. Thanks for sharing such a needed series on your blog. And thanks for linking up to B&BB. May God richly bless you this week! Gail
Gail, thank you for your kind words!
Thank you so much for being willing to share your journey! I have had the same experience as you when trying to apply a total money makeover approach to our life-you can’t cut back when there is nowhere to cut! So excited to see where this takes you and am hopeful (again) that we might just be able to get ahead for once!
I am excited to read your story! I’ll be subscribing so I don’t miss it.
Like you, we have been on a limited income since our oldest was born. Our numbers are a smidgeon higher but not much (under 50k most of the past 10 years). We HAVE become debt free and are working on the emergency fund and it is very HARD to stay motivated. One recent change we’ve made is to Dream Big and it’s really helping us to be motivated to continue to live frugally AND to find ways of increasing our income. Those big dreams were what I shared for Frugal Friday.
Eden, Congratulations on being debt-free! It’s such an exciting prospect
I just subscribed. Looking forward to keeping up with you and grabbing some tips for our family as well!
I just subscribed. Can’t wait to see how we can use some of your tips for our family. We are family of four on a 21000 before taxes.
I’ll be subscribing too and can’t wait to hear your story. Our family is very familiar with DR and have listened to his podcast, but it is very discouraging to hear the incomes of all the debt-free people and our is 1/2 to 1/3 of theirs.
Such a timely post.
Looking forward to this! I too am frustrated by seeing all these wonderful “get out of debt” plans where everybody involved has cable to cancel, has fancy phones, etc. We cancelled all that long ago and still have very little to spare. Still, what we do have spare we are investing wisely, and like you look to be out of debt in about 6-7yrs.
I’m looking forward to this series! I actually just did the same topic on my blog last month! Nonetheless, I’m always up for learning new tips and tricks from others. I agree that though Dave Ramsey has great advice, it is geared more towards those with larger salaries. I know all the tools, but yet can’t seem to get beyond paycheck to paycheck living. When income is on the lower end, it’s a challenge to find that extra to really put towards debt because every dollar is already obligated elsewhere. I hate that Ramsey’s company never replied back to you. Perhaps it was for the best as now you can share that rare but highly needed story of getting out of debt on a lower income. Thanks!
Where there is the will to be debt free, there is a way to be debt free. It might take longer on a smaller budget but there is a good chance too that the amount of debt is smaller than someone who is a two income/large income person will have.
Have you checked out the livingonadime web site? Their story is very much like yours. They have one income, the wife has an illness, there are 3 kids…they live debt free…very good site.
I look forward to reading your series.
Roxie, thanks for the site recommendation. I’ll check it out
I hope you can help me. I am desperate.
Paige, I hope so as well! I have no miracle cure for finances, but with dedication and sacrifice, I believe it’s possible to stretch a small budget. Saying a prayer for you, now. Our Heavenly Father knows what we need. Blessings to you!
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I am so excited that I found this and look forward to your series!
We are also on this debt free journey with a wee little income. It’s hard not to worry about how to make ends meet, much less how to get out of debt. But I’m learning to take our money one paycheck at a time, pray for wisdom and keep plugging along. Looking forward to reading your journey.
Yes, Cheryl, that’s all we can do and I believe God will provide the finances and wisdom if we follow His guidance. Blessings to you and your family!
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Thanks for the feature, Angell!
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I thank God for how you look to Him in your struggles and how you encourage others.
I just found you today. It sounds like you are are real person in the same position we are. I will be following you and seeing how I can get a fresh perspective and try again.
I am so glad I stumbled across your blog. I need this series. We are a 1 income household. We are at that level where we make just enough to not qualify for any assistance programs (which I’m not sure I would apply for, but would be nice to know it was available if we were in need). And we live rent “free” in a mobile home we are paying my inlaws for by giving them a small amount of cash each month and then covering their internet, cable and trash collection for them. Which means we can’t cut internet or cable to lower our monthly bills. And I am diabetic & pregnant with our 2nd child, so that means we can’t cut our grocery budget by going meatless or eating a lot of rice and beans. So I am in the market for some good frugal ideas that are not the “normal” ones.
Hi – we are also a lower income family and paying down debt. We are a few years into it and finally have breathing room – you can read up on our journey as I post every Friday morning on what I did that week to pay off our debt and save for a home bigger than a 2-bedroom for our family of 6
Blessings to you and your family.
Thanks, Carrie! I will definitely check it out…for some encouragement
We are just now starting our journey and already life is throwing us some curveballs, but we’ll get there 
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I just want to say thank you and I'm with you. We are a family of six and as I was pinteresting my butt off so I could get inspired to make my new years resolution happen I came to a quick realization that every get out of debt site was for people who make four times what we do and my favorite part is they want me to buy a book or buy a computer program. Lol what part of out of debt are they not getting? I'm pretty sure me charging another 49.95 is a bad idea lol. So thank you for posting this….. I found it right before I was about to give up
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