it article reprinted by permission from NerdWallet. In this series, NerdWallet highlights people’s debt repayment journeys. This month, Jae Bratton tells how she and her husband brought a laser focus to eliminating debt, fueled by the prospect of starting a family.
My story of clearing more than $53,046 in debt on two teachers’ salaries is one of pain, perseverance and cooperation. But it’s also about love. My husband and I started paying off the loan shortly after we got married in 2016, and we paid off three years later, before our son was born.
I’m adamant that we won’t start a family until we get the debt to zero. Rumor has it that kids are expensive, so I want to free up space in our budget for the inevitable medical bills, childcare and college funds.
That rumor turned out to be a cold truth.
Our four main strategies provide a road map for others working towards financial independence.
1. Make a battle plan
Debt is an opponent, a monster to slay before you can move on to the next level. This requires a well thought out plan of attack.
First, we measured our opponent by identifying our debts and organizing them in a Google sheet. We have seven debts, including student loans, two car loans, a home improvement loan and the remaining balance on my engagement ring. As each debt is defeated, I delete it from the spreadsheet, and oh, the satisfaction.
We chose the debt snowball payment method, where you focus all the extra money on paying off the smallest debt while continuing to pay the minimums on the others. I need a few quick wins to keep me motivated before I face bigger, scarier balances. We cleared our smallest debt in the first three months, $926.
No sweat if you want the avalanche method, which takes the biggest debt first. The simple act of choosing one, which fits your lifestyle and personality, is more important than the method. Snowball and avalanche are just two different paths to the same result.
Relevant: Loaded with a ‘horrendous’ amount of debt, this chemical engineer cut his six-figure student loan and ‘loved life’
2. Always budget
After listing the debts and deciding on a strategy, we write a budget each month. First, we know our combined income. At the beginning of our debt-free journey in August 2016, my husband and I brought in $4,694 a month. By reducing mandatory expenses such as mortgage and utilities, groceries and minimum loan payments, we know how much money we have for additional loan payments.
A few months, we paid the minimums on the loans and that was it. Then, when there was more money, we made additional payments, some months as high as $3,500. In both instances, the budget determines how we spend each dollar and keeps us disciplined. Are we staying on budget every month? Absolutely not. But every month, we try. And when the month ends, we start again, trying to do better than the last.
Many budgeting strategies, tools and apps can help you draft and stick to a budget. Pen and paper are also good. (My budgets are on sticky notes and dry-erase boards.) Whether you like a 50/30/20 budget or love stuffing envelopes with money, know that any budget is better than nothing. Without it, you risk forgetting about bills, running out of money before payday and delaying your loan repayment date.
3. Make or find more money to pay off the debt more quickly
Send more money to the loan
Most of the big cash flows leave our bank accounts before we’re even tempted to spend them: tax refunds, job bonuses and income from second jobs. For example, my husband receives a stipend for coaching basketball and I teach summer school. We both sacrificed time to earn money, but in a way, I got it back with interest: Now, I can be with my son after my work day ends instead of going to another job. That time with him is really priceless.
Increase your income
I spent two years getting a professional certification that increased my salary by 12%, increasing my take home pay by $250. At that point, my car loan was worth $223 a month, so it was like an extra car payment.
Many jobs reward employees for adding certifications or credentials. If yours isn’t, consider negotiating a raise or finding another job that pays more.
Adjust the withholding tax, if necessary
If you get a refund after filing your taxes, that means the excess of your paycheck is going to the IRS, interest-free. Sure, that money will eventually be paid back in a lump sum, but you’ll receive smaller paychecks throughout the year.
After I got married, I filed a new W-4 to change my filing status from “single” to “married filing jointly.” At the same time, I adjusted my withholdings after using the IRS tax withholding estimator tool. That increases my take-home pay to $269.
Also read: This couple traded their house for an RV and paid off a $200,000 mortgage – then the money started rolling in
4. Cut expenses
“Just skip the daily trip to Starbucks.” SBUX,
That advice has become a cliche. But paying off thousands in debt requires a bolder move — and a more painful sacrifice — than passing on the lattes. So here’s what I did instead.
Stopped giving to charity
Some people don’t agree with my decision to eliminate giving time to pay off the loan. When to give, how much and to whom are very personal choices. For me and my husband, taking a break from giving generously has worked. You can decide if it is right for you.
Reducing or eliminating expenses is inevitable when you’re trying to pay off debt. The good news: there are many ways to do this. Check your bank and credit card statements and look for savings opportunities. Here are some ways to reduce the cost of living:
My husband found a job closer to home, cutting his commute from 31 miles to 6 miles and saving on gas.
We waited a year to go on a honeymoon, which was usually paid for with cash wedding gifts.
We save when possible: I started grocery shopping at a cheaper supermarket. My husband, an avid bowler, suspended playing in a league to save about $20 a week in fees. He even switched to a cheaper brand of razor.
See: 3 signs that indicate peak inflation is behind us
5. Save strategically
I have always built an emergency fund in my family, exceeding the $1,000 that some say is enough for those discharging debt.
This decision actually delayed our debt-free date, but on the other hand, a healthy emergency fund gave me a financial cushion and valuable peace of mind. I know that I can pay the expenses of a financial emergency without going back into debt.
Imagine your life after debt
Give yourself fuel for the debt-paying journey by imagining life after.
I felt light and a deep sense of accomplishment when I submitted the last loan payment in 2019. For three years, I was very focused on our journey. I alternate between blaming financial mistakes and belittling things I can’t afford. After paying off the $53,000 in debt, I turned my sights outward and continued to donate to causes and give back to others. Most of all, I was free to start a family.
More From NerdWallet
Jae Bratton writes for NerdWallet. Email: [email protected].