DEBT FREE

[Kforce]

Congrats !!

1)  Being debt free is more important than fico scores.

2)  Not everyone's profile suffers the same from becoming debt free.

     I lost about 15 points and a year later only about 5 down.

    For me the score loss was very small.

[JTC-137]

Thanks! And I completely agree finances > fico. That’s a surprisingly small drop you experienced; I’ll know in about a month what happens in my case. Over the course of this journey I’ve learned, in my case at least, that it only takes about $10k in the bank to mitigate almost all contingencies...from meeting max out of pocket for healthcare expenses to complete vehicle replacement.

Worst case would be losing my job, but we’re now building up to 6 full months of expenses to cover that. I’ve been there over a decade and we’ve never had a lay-off in our 100 year history, so there’s no reasonable expectation that scenario would come to fruition. Still want it covered though. Now with no debt, the income needed to run our household should be easy to replace. If my wife were to also get a job we’re talking a total non-issue. That’s a good feeling 😁

[Anonymous]

Congrats

[Anonymous]

Congratulations on paying off all that debt! That’s awesome.

[Anonymous]

Congrats!

[Anonymous]

---

@JTC-137 wrote:
Over the last 13 months we paid off roughly $55k in debt and cash flowed about another $20k in other (mostly) unexpected expenses.

It was a simple path to get there, nothing new or groundbreaking. We made a budget and stuck to it religiously, and also worked like a crazy person soaking up every minute of overtime available. It can be done.

---

That is insane! My fiance and I are in $55k debt accross her student loans and our car loan. Do you use a budgeting software or do you follow your own budget? We have been using YNAB to budget for the last 9 months and it has paid off quite a bit so far. I just received a raise and she will be due one soon so we're planning on using a good portion of that additional income for debt paydown. Your story gives me motivaiton to get become debt free as soon as possible! 

[Anonymous]

Excellent! Congratulations!

[JTC-137]

We tried using several different apps but it didn’t work in our case because we would forget to track expenses. So we opted for a written budget just because that’s what worked for us. First and foremost we said our goal is to have no debt. Once we were on the same page everything went so much more smoothly. We sit down a day or two before payday and have a budget meeting. If something came up between paydays we would meet again to discuss it. On payday I immediately paid all the bills and she pulled out cash for us to live off of until next payday. Groceries are tricky because we have a million kids lol so we shoot for +- 10%. A couple of times we ran out of cash and were literally digging for change in the couch. Our budget (stuff we pulled out the cash for) categories are:

1. Groceries
2. Fuel
3. “Pocket money” for each of us (most of the time these funds were reallocated to the random things that would pop up like school pictures, doctor visits, etc)
4. A VERY modest entertainment category

Everything else was listed out as a bill, even the kids’ activities. Then anything extra went to our debt. We haven’t taken any vacations or bought anything for ourselves that weren’t absolutely necessary. We only ate out a handful of times. I looked at it like this short term sacrifice would set us up for the rest of our life. Also we cut up all credit cards.

If yall can allocate 100% of your raises towards your debt that’ll go a long way in paying it down faster. You can do it!! Making the budget and sticking to it is the hardest part which you’ve already done. Now just keep chipping away at it! Please keep us posted of your progress

[Anonymous]

---

@JTC-137 wrote:
I looked at it like this short term sacrifice would set us up for the rest of our life. Also we cut up all credit cards.

---

I really like your analogy here and I think that goal setting will go a long way convincing my fiance to jump on board. It's hard to keep her on the same page as far as finances go since she is a big spender and I was raised to be frugal and value money. We are planning on getting married within the next 1.5 years and and hoping to be able to buy a house in 3. I think she will be able to get behind the idea of short term sacrifices setting us up for success in the long term. We are both still very young and and have a long road ahead of us, I just want to make sure that road is a lot easier to travel!

Edit: I wanted to add that while I think cutting up your credit cards can be a good idea for some people who have a bad habit of over spending when using cards but when used responsibly can reap huge rewards. I look at credit card spending as cash out the door since I pay in full and responsibly budget all of my spending. I am pooling all of the cash back we earn to pay for vacations or to help justify a large purchase.

[Anonymous]

Congratulations!