Last updated on January 14th, 2020 at 11:53 am
(Links in this post are affiliate links. I will be compensated when you make a purchase by clicking those links. See my disclosure page for more information)
My family’s journey to becoming debt free won’t make the news. It won’t become a book. It isn’t the type of story you scream about on The Dave Ramsey Show.
Honestly, I don’t even like talking about our debt-free journey because when I do mention it, I can tell it makes people feel uncomfortable. It leaves them grasping for words. There instantly becomes this awkward pause in conversation when I mention it.
In fact, I am only sharing it here today because I feel God tugging at my sleeves asking me to talk to you about the importance of handling financial windfalls well and I can’t seem to write a word about it without first telling you our family’s story. How we have managed financial blessings both well and poorly, and what we have learned from our mistakes and our successes.
If I had to put our debt-free journey into a sentence this would be it: My family is 100% debt free today because people died.
Yes, that statement is blunt–but making inheritances smell like flowers in springtime isn’t something I can do.
Why I Rarely Talk About Our Debt-Free Journey
Don’t get me wrong, I am so thankful for family members who paid their bills and left no debt unpaid. For family members who left behind life insurance policies to cover their funeral expenses and more. For family members who paid off their homes in full before they passed away so proceeds from the sale of their homes could be enjoyed by those left on earth.
But it still hurts. I will never forget the day the inheritance check came from my mother’s estate; I was crying so hard as I took it to the bank that the bank teller had to wait for me to stop sobbing to explain what I wanted to do with the check. She even had to go searching for tissues so I could dry my eyes enough to see the forms I was signing.
At that moment all I could think was, “God, would you take this check and just let me spend one more day with my mom?” I know I will see her in heaven one day, but on that day in the bank all I wanted to do was exchange that check for another day with her here on earth with me.
But I couldn’t. What I could do, however, was make sure I used the financial gift she left me wisely. To make it count. I knew what I wanted to do. My husband had been working 60 to 70+ hours a week for years to pay our bills. I wanted to give our family the gift of a dad and husband who was home more. I knew to do that I needed to reduce our monthly bills and the only way to do that was to reduce our debts.
Read an update on where we are now financially.
Our Lives Before We Became Debt Free
First, let me tell you our debt wasn’t high to begin with. We had around $5,000 in car loans, $10,000 in student loans and $60,000 in a mortgage. Roughly $75,000 in debt including the mortgage or $15,000 without. Not large debt numbers, since we have always been thrifty people who have lived on a budget, refusing to carry a credit card balance from month to month. Our month to month payments were right around 25% of our take-home pay before overtime and the second job. These numbers sound conservative–comfortable even–but we had a few challenges.
One challenge was we wanted children raised in a home with a full-time parent present. My husband is an RN, a good job with good pay, but still one job in a two income world is hard.
We had also been paying cash for one child and me at a time to make the 3,000 mile trip to my mom’s several times a year during her four year battle with cancer, and that wasn’t cheap.
These trips had left us paying minimum payments only on our debts, which was a first for us in many years of our marriage. They also left us unable to fix a home that was so badly in need of repair the ceiling was falling on our heads (well thankfully just the dining room table and no one was hurt).
I knew my inheritance check was coming months before it arrived and I spent the time praying to God about how to wisely use it in a way that would best benefit my family and honor my mother.
For a list of 52 different websites, apps, and stores our thrifty family uses to help us keep our expenses low, click here to visit our Thrifty Tools Resource Page.
Our Plan To Become Debt-Free
Our plan ended up being a bit crazy, but it worked–almost. With my inheritance check from my mom, I bought a $9,900 home, paid off the rest of our student loans and paid off our car loans.
The plan was to renovate and then move into the $9,900 home. Once moved we would fix the house we currently had mortgaged. In the end, we were going to decide which one we liked best and sell the other to pay off the mortgage and be 100% debt free.
With no debts, we would have lowered our expenses enough for my husband to quit his second job and work a 40 to 50+ hour week (there is hardly an RN position out there that doesn’t require you to work some overtime). The children and I would see him more and our family could still live life thriftily yet comfortably.
The plan sounded great, but those who have renovated before would have seen our error right away. We were not at all realistic about the cost of restoring two homes. Our money ran out just as the first house was finished.
We were moving into our newly fixed, paid in full home and trying to figure out how to raise the cash to repair our original house when my maternal grandmother died. She left the share of her estate that should have been my mother’s to my sister and me.
With a grieving yet grateful heart I took the money my grandmother left me and set aside enough to fix our original home, as well as pay off its mortgage while we were working on it, and the inheritance stretched just far enough to buy a 3rd home for $15,000 and fix it up to rent.
We were now 100% debt free with two rentals.
Yes, I know our debt free story should end there, BUT it doesn’t.
Make sure to read part 2 of our debt free story where I share our $40,000+ stupid tax story, what we learned from it, and how we became 100% debt free again and plan to stay that way.
I mentioned two Dave Ramsey terms in this post. In case you don’t know who he is, Dave Ramsey is the author of The Total Money Makeover as well as Financial Peace University and has a talk show, The Dave Ramsey Show. He shares wisdom on getting out of debt and staying out of debt. You can check him out at daveramsey.com
Read More About Our Debt-Free Journey:
- Our Debt-Free Story Part 2: Back Into Debt & Out Again
- What Debt-Free Living Really Looks Like For Our Family
- 10 Tools To Help You With Your Debt-Free Journey
Looking for ways to save money? Join my Thrifty People Of Snail Pace Transformations Facebook group where I share thrifty tips, thrifty finds and more!