Imagine having no monthly debt payments! If you’re tired of all your money going to pay off debt, then newlyweds Jessica and Matthias are proof change is possible. After getting married they paid off $61,000 in 20 months.
Here’s why Jessica and Matthias were on a mission to pay off debt
Jessica wanted financial stability and flexibility of no monthly debt payments. “I was tired of being run by my money. I felt like I’d get paid and it’d all go to bills.” said Jessica.
When they combined finances, around $3,000 monthly was going to debt. “In the future with starting a family and buying a house it’d be beneficial to not have money trapped with debt,” said Matthias.
How paralysis analysis initially held them back from making progress
They experienced paralysis analysis. Matthias, an engineer, ran four or five spreadsheets analyzing the best way to pay off debt. He showed them to Jessica, and they could. not. decide.
There were too many decisions to make. Did they want to buy a house right away, or hustle to pay off debt first? Is it better to pay off the smallest debt or highest interest debt first?
The indecision resulted in inaction. They only paid the minimum debt payment and didn’t make progress (even after taking Dave Ramsey’s class!). “We didn’t think we were going to be able to pay off debt fast,” said Jessica.
Jessica wanted outside help and to be able to talk to a real human, versus just a class recording.
The solution was from within, but they needed a specific, clear plan
Jessica is an instructional designer who creates training materials for American Airlines. She knew the first thing you include in a training is ensuring people have the right mindset to make a change.
“You have to tell yourself this is what you want, you’re excited, and ready for it,” said Jessica.
She explained your finances aren’t going to magically improve. Everything needs to change. You have to adjust your lifestyle to what your goals are.
They both had the mindset to get rid of debt. Now with a plan, it was game time.
How Jessica and Matthias Paid off $61,000 in 20 months
In a nutshell, “it was discipline and consistency,” said Jessica.
Every month they paid an extra Spartan amount of $500 to the highest interest debt. Then paid extra to the next highest interest debt plus the old debt payment.
To pay an extra $500 they started using weekly cash. Having a set amount of cash each week for groceries, eating out, and other day-to-day spending helped.
“Before we were spending a ton on eating out. Weekly cash forced us to do more grocery shopping,” said Matthias.
Every Sunday, after church they’d get $140 cash then go to the grocery store on Monday with a list and meal plan. Matthias avoided impulse purchases by only buying items on the list. They spent around $70 weekly for groceries and each had the remaining $35 for other purchases.
Learn more about weekly cash and this brilliant system for managing your money here.
“Whenever we came into more money with merit raises and tax refunds, we’d take a large percentage to go towards debt. We never thought of it as extra money,” said Jessica.
How Jessica and Matthias overcame roadblocks
When paying off debt, there’s always setbacks. They stayed motivated by seeing progress using their personal finance Balance Sheet from class.
They committed to stay on track even when unexpected expenses popped up.
For example, Matthias took his truck for an oil change and it needed extra work. Four or five months in a row they paid for car repairs from their emergency fund. They continued to pay the extra Spartan amount to debt.
It wasn’t all work without play. They relieved stress by hanging out with friends and traveling. They went to Disney, before the COVID pandemic started. “Balance is important,” said Jessica.
How it feels to be debt-free
“It feels relaxing, like a weight lift off our shoulders. You can do with money what you please. There’s no stress,” said Matthias.
Jessica feels blessed to be debt-free now. “With the pandemic there’s always a concern you won’t have a job,” said Jessica.
Having no debt payments lessens stress about the pandemic’s effect on jobs and the economy.
Next, by taking what they paid to debt to save for a home, they’ll have $18,000 saved in less than a year! “We’re excited to work towards buying a home,” said Jessica.
Jessica and Matthias’ advice if you’re paying off debt
Jessica recommends asking for a little ‘yes mam’ or ‘yes sir’ to confirm your partner hears and acknowledge your concerns. She said it’s extremely important to talk about money and be on the same page. They talk about finances weekly.
“Have faith the change is going to work. Change is hard and scary. Once you’re familiar with your new normal, it’s no longer hard,” said Jessica.
Congratulations to Jessica and Matthias for paying off $61,000 in 20 months! If you’re ready to pay off debt and have a “do-over” with money, you can too! Join me live for the next session of Best Money Class Ever.
