When I think about our debt payoff story, it really does put a lump in my throat. Not just because of what Erik and I accomplished, but because I think about how we’re setting up our future grandkids and great-grandkids to be better off than we are.

I think every generation has this desire for their kids to be better off than they were. I know our parents did.

Today, I’m sharing the full story of how my husband Erik and I paid off $65,000 in debt in about 2.5 years while making a combined gross income of just $76,000.

Let Me Set the Stage

First, I want to make this VERY CLEAR: Erik and I are middle class. So middle class that it should encourage you that this is possible for everyone.

Erik is a high school teacher and football coach currently in his 14th year. He just transitioned to a new high school here in Alabama where he’s the Offensive Coordinator.

I’m a business owner, which means I get kicked in the teeth with taxes every year.

The year we made our final debt payment (bringing our total to $65k paid off), we were making a combined gross income of $76,000. That’s before taxes.

To put that in perspective, with taxes between 25-30%, our actual take-home pay was between $53,000 – $57,000 per year.

We became debt-free except for our mortgage in September 2018.

The Nerd and the Free Spirit

Dave Ramsey says that all marriages generally have a nerd and a free spirit. A saver and a spender.

Erik is definitely a nerd and a saver. He can go months (literal months) without spending any money other than on gas for his car.

I am a mesh between a nerd and a spender. I genuinely like the numbers and budgeting side of things, but I AM A SPENDER THROUGH AND THROUGH. If two of MY PERSONALITY were married, we’d probably be in debt up to our eyeballs. I’m being so for real.

But a budget gives us both guardrails to keep us in check while still giving us freedom to spend.

How We Accumulated $65k in Debt

Our debt was entirely from college loans.

Erik played baseball his first two years of college, then transferred to the University of Alabama and took out loans for each of his final three years there. My loans were personal loans to my parents and not interest-accruing loans.

Don’t worry – I went to college four years out of state, so the amount I had to pay them back was still a nice chunk of change. I actually owed more for college than Erik did with his interest-accruing loans.

My $5k Credit Card Mistake

This is so embarrassing, but I need to tell you about it.

My first big girl job after college was as a department manager at Belk, a family department store in the southeast. I signed up for a credit card when I started working there. I DID NOT UNDERSTAND credit cards or interest rates or anything.

Before I knew it, I had racked up over $5,000 in credit card debt just from buying clothes over the course of the one year I worked there.

I got these credit card statements in the mail and was making the minimum payment of $25 each month. And then one month I got my statement and my balance had gone UP.

I was like… I’m sorry, WHAT? I simply didn’t know what I didn’t know.

In the meantime, Erik and I had started dating, got engaged, and were planning our wedding. I was TERRIFIED of him finding out that I had spent over $5k on clothes in one year, so I drained money out of my savings account just to pay that off before we got married and got a joint bank account.

Our Introduction to Dave Ramsey

Erik and I got married in 2015, and just a few months after that, some friends told us about Dave Ramsey. We had both heard the name but knew nothing about his philosophy on debt.

Erik dove in head-first and learned all about Dave’s plan, investing, and financial freedom. I was kind of just along for the ride and was willing to play my part, which was to spend less. (Ha!)

The Baby Steps We Followed

Here are Dave Ramsey’s Baby Steps that we followed in order:

Step 1: Save $1,000 for your starter emergency fund.

Step 2: Pay off all debt (except the house) using the debt snowball.

Step 3: Save 3-6 months of expenses in a fully funded emergency fund.

Step 4: Invest 15% of your household income in retirement.

Step 5: Save for your children’s college fund.

Step 6: Pay off your home early.

Step 7: Build wealth and give.

We are now in Steps 4-6, doing all of them simultaneously. We’re currently investing 15% of our household income in retirement, saving for both our kids’ college funds, paying off our home early, and building wealth while giving to our church. 

Starting Step 1: The $1,000 Emergency Fund

We already had more than $1,000 in our bank account when we started, which meant we immediately began paying off Erik’s student loans by draining our bank account down to $1,000.

This is going to make some of you break out in hives. You’re thinking, “BUT WHAT IF AN EMERGENCY HAPPENS?”

And that’s literally the point – it puts a fire under your butt to pay these loans off so you can build your savings account back up and breathe again.

All of that hard-earned savings I had built up in high school and college? Gone.

All of Erik’s savings from summer jobs and his first year of teaching? Gone.

We went all in right away.

Step 2: The Debt Snowball

The debt snowball method means you pay off your debts from smallest to largest, regardless of interest rate.

Dave suggests this because debt payoff isn’t a math problem – if it were, you wouldn’t be in debt in the first place. It’s a behavior problem. Paying off the smallest debt first gives you quick wins that keep you motivated.

There’s the initial excitement of starting the debt payoff journey, and then there’s the final payment made at the end. But the middle? THE ACTUAL JOURNEY is an absolute grind.

What Those Few Years Actually Looked Like

Erik and I made decisions that most people would consider “not normal.”

We drove older cars – a 2003 Lexus and a 2004 Honda Pilot. We refused to have a car loan.

I remember working at a corporate retail office (at this point I had left Belk and was working at Hibbett Sports in Birmingham, Alabama). I wanted to make friends, so at first I would go out to lunch with them. But once I got to know everyone, I just stopped going.

A lot of them knew I was saving money, but I don’t think they all knew the extremes Erik and I were going to in our effort to pay off debt.

A ton of Erik’s time was tied up with football. At this point he was coaching middle school and attending every varsity practice at his school. So I had a lot of time to myself (remember, this was 2016-2018, so we didn’t have kids yet). I was into fitness, so I became a certified group fitness instructor and was teaching five classes per week at one point. It wasn’t much, but it made us about an extra $400 per month, and when you’re working to pay off debt, that really adds up.

We just kept chipping away, paying off the smallest loans first, then working our way up.

Making the Final Payment

I haven’t mentioned this yet, but my parents let us hold off on paying them back for my college since those weren’t interest-accruing loans. After we paid off all of Erik’s loans, we started in on mine.

And let me say this: Tina and Jerome Beggs, my parents… they did not overlook a single thing. And honestly, I’m glad they did this, as crazy as this is going to sound.

They had a spreadsheet of every single purchase I made using their money while in college. I’m talking textbooks, apartment rent payments. Every single item was accounted for.

And rightfully so. I knew they were giving me a set amount of money for college, and anything beyond that I had to pay back. I was simply doing what I said I would do. And it taught me the value of a dollar and hard work.

By now, Erik and I were each making a little more money – we were maybe one year into our debt payoff. I would have a recurring payment through my bank sent to my parents each month, and if we were able to save or make more money that month, I would write them another personal check on top of that.

My mom would send me spreadsheet updates of what I had paid and what I still owed.

Finally, in September 2018, we wrote my parents the final check to pay off all our debt (outside of our mortgage).

That was one of the most elating feelings ever. You feel like you get this massive pay raise and like you have so much money when, in reality, we were and still are very middle class. But when you’re used to paying hundreds of dollars each month and then you don’t have to, it feels like a raise.

Life After Debt: Not Letting Lifestyle Creep In

The key for us was to not let our lifestyle creep up after paying off debt. I have to admit, for me at times it definitely did.

We still had so many goals as we continued in the Baby Steps, and if we had let our lifestyle creep up, that extra money we were no longer having to pay towards debt would easily disappear.

After we paid off debt, we immediately started investing. Erik opened Roth IRAs for both of us, I started contributing to my 401k, and we began saving aggressively.

Another thing I haven’t mentioned until now is that during this entire debt payoff journey, Erik was completing his Master’s Degree, so we were cash-flowing that as well. He now has his EdS degree (Education Specialist), and we were able to avoid taking out any loans for both of those degrees.

The Two Ways We Disappointed Dave Ramsey

There are two parts of our story that Dave Ramsey would frown upon:

ONE: We didn’t wait until we paid off all our debt before we bought a house.

TWO: We didn’t initially sign up for a 15-year mortgage like Dave suggests. (We now have a 15-year mortgage, but when we bought our first home, we got a 30-year mortgage.)

I’m sorry, Dave. We let you down.

Buying Our First Home

My parents gifted us $11,000 to put towards a down payment on a house. We found a nice little starter home on the outskirts of Birmingham and lived there from 2016-2021.

So we actually moved in there right after we began our debt payoff journey. Looking back, it would have been wiser to tell my parents to put that $11k towards what I owed them for college, but I didn’t want to because I was impatient living in an apartment.

Erik was the wise one and suggested we wait to buy a house, but like any nagging wife, I wore him down!

We bought our starter home for $146,000 at less than a 3% interest rate, so payments were very low.

The Insane 2021 Housing Market

We lived at that starter home from 2016-2021. If you remember what the housing market was like in 2021, it was absolutely insane. Houses on our street were selling within 24 hours.

At this time, I was pregnant with Rafe (we got pregnant in March 2021), and I was working a fully remote position. I needed my dedicated home office, but now we also needed a nursery AND we wanted to keep our guest room.

We got a quote from a contractor to close in our screened porch to add onto our house, but he quoted us almost $40,000. We did NOT have that kind of money.

My parents own a lake house here in Alabama, so they suggested we move in there in the meantime for more room.

We sold our home for $110,000 MORE than what we paid for it. We put $100k into a Money Market Account (MMA) and used $10k towards my car.

In September 2021, we moved to my parents’ lake house. When you factor in everything we were paying for while living there, it was between $850-$900 per month, which was actually more than we were paying on our mortgage at our starter home. But we weren’t losing money to interest every month, so that did give us a leg up.

Our plan was to stay at the lake house for a small amount of time, but then the housing market stayed insane. We ended up staying there 2.5 years – way longer than expected.

Buying Our Cars in Cash

Shortly after living at the lake, we bought my Kia Telluride in cash. We both refuse to ever have car payments. After we paid off all debt back in 2018, we just kept putting money in savings, and then after the sale of our home, we used $10k of that towards my car and used money in our checking/savings account to cover the rest.

There is nothing like driving a car off the lot and knowing you owe $0 on it.

Last week, on December 30th, we got Erik a 2024 Toyota Tacoma in cash, so we now own two cars that are completely paid for.

Throughout the years, we did a lot of home renovations, but for over a year we stopped all renovations knowing that we wanted to get Erik a new car.

The Manual Underwriting Process (because our credit score was 0)

Fast forward to 2023, when we decided we wanted to buy the house we’re living in now. It was harder than we expected.

When you pay off all your debt (and then we didn’t have a mortgage either), your credit score becomes zero.

With a zero credit score, you don’t qualify for a home loan through the traditional loan process because the lender doesn’t see you as someone who reliably makes payments on time.

With a zero credit score, you have to go through a process called manual underwriting.

The traditional home loan process uses software to scan things like your credit score and bank info. The manual underwriting process is an actual human reviewing all your info. It can take longer and it’s way more strenuous. You have to provide a ton of info.

At the time (and this is on us) we weren’t aware of all the info we needed to go through with that process. So we had to wait another six months before we could buy a home.

The manual underwriting process requires you to have 12 consecutive months of making payments on two separate line items. We were going to use my phone payments and Rafe’s daycare.

The only problem? When you’re self-employed like I was, you have to have two years of tax returns before you can qualify to be considered on a home loan. Until two years of tax returns, they don’t see your business as a stable business.

Since I launched my business in 2022, I had to wait until January 2024 before I could have my income counted towards being approved for our home loan. We also had to wait until Rafe had been in daycare for one full year.

It was an absolute mess, but that’s the process of how we eventually got the home we now live in.

We used all the money in that MMA towards the down payment. Unfortunately, it had dipped and then gained back but overall was around the same amount as when we deposited it (we lost a little bit). Looking back, we both agree we would have been better off just putting that in a high-yield savings account, but hindsight is 20/20.

Where We Are Now

We’ve been living in our current home for coming up on two years now, and we love it. It’s a 1959 build, so LOTS of updates are needed, but it has a great location and school system.

And the best part is we bought within our means. Dave Ramsey suggests that your monthly mortgage be no more than 25% of your combined take-home pay, and we are below that.

When we first bought the house, we got locked in at an 8.1% interest rate (yes, it makes me want to throw up too). We also signed up for a 30-year mortgage, which would make Dave Ramsey disappointed in us.

But last year we refinanced down to a 5.1% rate and a 15-year mortgage. Unless we pay that off early, we’ll pay it off right as Rafe is entering college.

We each invest in individual ROTH IRA’s, and at the time we retire they are projected to be somewhere between $3-3.5M. Once again, MIDDLE CLASS. We did this making very reasonable incomes.

We also contribute towards a 529 Plan for both of our children, which they will use for college and be able to attend without taking out student loans. 

The Bigger Why

As we wrap this up, I want to leave you with this: we are very middle class. We sacrificed for a few years to attack our debt with a vengeance, and now it has allowed us to cash flow everything in life except our mortgage.

We don’t have credit cards and haven’t since 2016. We operate strictly on debit cards. We bought a home we could afford. We live below our means.

Temporary discomfort sets you up for generational wealth.

Back in 2021, right before I found out I was pregnant with Rafe, Erik and I visited Ramsey Solutions in Franklin, Tennessee (Dave’s company). After that visit, I made an Instagram post, and I want to quote it here because I think it perfectly sums up this entire story:

“Visiting Ramsey Solutions in Nashville this weekend was wind in our sails. It brought everything full circle for me. The Ramsey team says, “If your ‘why’ doesn’t make you cry, then the price of commitment will.” My “why” is so much bigger than paying off student loans.

I want our great-great grandkids to be well-off because of the choices Erik and I made, and because our kids made those same decisions. I want us to be able to give generously and not think twice. I want us to be able to go on a trip wherever we want, whenever we want. I want us to never have a car payment.

We’re still following Dave’s plan. We’re still tithing, we’re investing 15% of our income, we’re working to pay off our home early, and we’re saving up to purchase a car in cash…

There is so much freedom in being debt free. A large income (or lack thereof) clearly had nothing to do with us paying off this debt…but determination and a larger “why” did. God always provided, no matter the income.

Proverbs 22:7 talks about the borrower being slave to the lender, and we felt that. We felt chained to our debt, and now we don’t. I pray this post gives you the hope + encouragement that you can do this too!”

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If we can do this, so can you. It’s not about making more money. It’s about having a bigger why and being willing to make temporary sacrifices for long-term freedom.