how we paid off all our debt

Well, we've had some people ask us how we went about paying off all our debt... So I figured I would write a post about our personal experience, rather than emailing each person and having jumbled responses to different people. If this is completely boring to you, come back later and I'll talk about beauty supplies or something ;)

First of all, Dave Ramsey's Debt Snowball Plan is what we shaped our goals around. Before we planned to do this, we were trying to make higher payments on loans with higher interest rates. But we really weren't being very aggressive about making higher payments, and were mostly making minimum payments on all our loans. The main problem is we didn't have a definite/clear goal, and steps to work up to that goal.

To give a background, here is what we had in debt:

6 medical bills (infamous kidney stone of 2010, and having a baby)
5 student loans (Josh)
5 student loans (Jess)

This list could look very different for you. There could be credit cards, store accounts, second-mortgages, whatever. But what it comes down to is debt is debt is debt. Boo. Also, side note: we did not include our mortgage on our list of debt. If we were planning on living there for the rest of our lives, then I might. I haven't looked into what little Davey thinks about that, but mostly because I didn't want to get involved ;)

So the first step you need to take is to save up an emergency fund. Dave Ramsey suggests a $1000 emergency fund. We saved up a bit more than that so we'd feel more comfortable (considering that alone would be our mortgage payment!). The second step is to write out every bill you have, and the amount. Then organize the list from lowest amount to highest amount. Tackle your list, starting with your lowest bill, and work your way up. You can make minimum payments on all the other bills while making larger payments on the lowest bill.

i guess this is what a debt snowball looks like. gimme that money!!

Since Josh and I are both working full time, we did a little math... We made sure we could pay all of our regular monthly bills (mortgage, Dish, internet, groceries, etc) with just one of our paychecks. Since Josh makes a little more than I do (INEQUALITY IN THE WORKFORCE, WHAT!?! haha just kidding...mostly...I gave up a raise so I could cut my hours a little bit after having Henry), we chose to keep his whole paycheck to go towards our monthly expenses. My entire paycheck went to childcare and paying off debt. To make this easier for ourselves, we set up an auto-transfer to our savings account every week (that came out the day after our paychecks were deposited) of the total amount we set aside to go to loans. When it was time for us to make a big payment on a bill/loan, we would transfer that amount back to our checking account, and make the payment. That way the extra money was untouchable to us. Out of sight [of your checking account], out of mind...

For single-income families, it might be a bit more involved to figure out how much to set aside strictly for loans. You would have to be a lot better about doing a monthly budget, so you could know a definite monetary amount to allocate just to debt. Just figure out how much you need for all your monthly bills, giving a little lee-way for extra expenses that might come up, and think about what kind of lifestyle you want to have. Dave Ramsey would say every single extra penny needs to go towards debt. But what do you define as "extra"? We like to go out to eat at restaurants on the weekends and hang out with our friends. (And I like to buy candy...what?!) This factored into our monthly bills, as this is not something we wanted to give up. Shopping trips to the mall or Ikea, however, were virtually cut off. So do your budget, make some hard decisions of any "extra" things you can afford to include in that budget, and then take all the rest of your money and put it towards debt.

Once you start crossing off bills on that master list, it feels awesome! It really does make the overall goal feel that much more achievable, even if you only paid off a $300 bill. Stay consistent with your goals, and communicate about your progress with your significant other (if applicable). Talking about your accomplishments with another person increases your enthusiasm and drive, so feel free to remind eachother how amazing you are at life. Because, for reals, you're getting out of debt. You're taking control of your money and your future. Therefore, you ARE amazing at life. ;)

Best of luck, friends!! And of course, I am not an expert, nor am I pretending to be one. I am just someone who has experienced this, and would love to be your cheerleader.  Some great resources for your financial journey that we liked are Dave Ramsey's website, and Suze Orman's website. They both have tons of tools, advice, and links to additional resources. Feel free to ask us any questions, although like I said--I'm no expert!