How We Destroyed $50,000 of Debt in 10 Months

Our story begins like many newlywed stories. We went on our carefree honeymoon and shortly after returned home to open gifts and write thank you letters to friends and family. It wasn’t long after settling into our new life together that we decided we were going to do this “adult” thing and we needed to start taking our money seriously. That meant learning how much debt we had.

Before getting married, we talked about our debts and assets a few times, just to be sure we knew what we were getting into, although we hadn’t given the conversation much weight.

What can you say? We were in love.

In order to make a concrete step towards understanding our finances better, we made a list of all our debts to see what we owed. That’s when we realized that our financial situation didn’t look so good.

We had $50,000 of debt from student loans, car payments, and other miscellaneous bills altogether. This was a lot of money to us. While we both had jobs, we were working for non-profits making average salaries.

When we did the math on how long it would take us to pay off our debt, we were devastated.

If you are anything like us, you probably have had or do have some debt. You may also be familiar with that feeling deep down inside of you that feels like someone else owns a part of you because you owe them money…

If you know what we’re talking about, it was precisely that feeling that drove us to take our financial situation seriously. We weren’t getting any breaks, so we knew we had to take ownership of our finances.

We went to the whiteboard and created a plan to get out of debt as fast as we could. Below are a few key lessons that we used to destroy our debt in just 11 months:

Step 1: List All Your Assets & Liabilities

First things first, we listed all of our assets and liabilities. We wrote down everything that we owned (personally) and everything that we owed (to other people). This helped us understand our cash flow or what was coming in and what was going out each and every month.

Step 2: Focus On The Largest Debt

Next, we identified the loans that we wanted to focus on paying down first. For us, it made sense to focus on making large payments on the highest interest rate loans first. That same loan also happened to be the smallest loan we had, so it made sense to tackle it first.

We made $2,000 payments each month towards that loan until it was fully paid off. This gave us a quick win early on and it also eliminated the highest interest rate loan, which saved us money over the long run.

Step 3: Cut Your Largest Expenses

We then identified ways to save on our largest reoccurring monthly expenses. By doing a quick 80/20 analysis about what the majority of your money goes you can learn a lot.

Look at your expenses and see what you can cut. You could start with things like:

  • Rent
  • Insurance
  • Phone plans
  • Eating out

We tried to cut everything out that we could.

We ended up cutting:

  • Netflix
  • Hulu
  • Audible
  • Monthly subscriptions

In addition, we found cheaper car insurance, internet, and phone service.

Doing this saved us hundreds each month.

By utilizing these strategies alone we were able to make considerable progress towards our goals… but progress was slow.

We had one major expense that we hadn’t figured out how to hack yet: our rent.

That changed one night when we were enjoying dinner together.

“Why don’t we downsize and live in a camper to focus on paying off our loans?”

We both laughed and smiled nervously at each other while I did the math on the back of a napkin…. “Nine months and we could be debt free,” I said to my beautiful and nervous looking wife.

We sat quietly smiling at each other and she said, “Let’s do it!”

You see, we had always dreamed of quitting our jobs and traveling. The idea had been thrown around but we just couldn’t make it happen financially. At the very least, we figured that we would learn what it’s like to live in an RV and by the end of the whole ordeal we would have our debt paid off so if we wanted to go traveling we could!

So we searched craigslist night and day for a new travel trailer.

We eventually found one for $4,000, which was a steal. It was a 1999 TrailManor that was owned by two sisters in South Oklahoma.

It was in decent shape but needed some work which helped in the negotiation of the deal.

Within a few weeks of our original conversation, we purchased the camper and began working around the clock to get it move in ready.

In order to make the transition, we sold a ton of our stuff, donated half our wardrobe, and rented a storage space for the rest.

(Below: picture of the inside of the camper when we bought it)

Pay off debt

We scrubbed. We painted. We worked hard.

We remodeled the camper just enough to call it home, and a week later we moved in.

(Below: what the inside of camper looked like after the remodel)

How We Destroyed Our Student Loan Debt

At first, the experience was a little bit like camping. Since we both like camping, we loved living in the camper! This is what we call the “honeymoon” phase. Like any honeymoon phases, it did not last.

pay off debt

(Above: If you are wondering what camper life looked like, this is it!)

We quickly learned that explaining to people that we lived in a camper is really sort of awkward. Yet it was funny because people always seemed to cheer us on and boast how they wish they would have done something like we were doing to get rid of their debt.

Nevertheless, we made it through the cold winters and hot summers, despite all the challenges we faced.

From having the initial conversation to emptying our savings account to buy the camper, remodeling it, and ultimately selling it for 2x what we bought it for; it was absolutely worth it.

Our goal was to be completely debt free in 11 months and we did it.

It was not easy by any means. The best part though?

Now, money no longer holds us back but gives us a reason to dream.

We learned a lot about ourselves and money on our 11-month journey to become debt free.

Mostly we are thankful that we don’t live in a camper anymore! We can now joke about taking cold showers in the winter because the pilot light went out or having to empty the black water tank (poo tank) on a weekly basis.

While those were real frustrations, they are memories we will forever carry with us and memories we can hopefully entertain our kids with someday as we tell them why they actually have a college fund.

Most of all, we learned that financial freedom is worth chasing.

We have more freedom to pursue what really matters to us: travel, family, and saving for our future. We don’t feel that feeling deep down that anyone owns us anymore.

That’s why we started this blog, so we can encourage you to take the leap of faith and take some risks when it comes to getting out of debt and finding financial freedom.

We aren’t saying you have to live in a camper but we are challenging you to think outside the box and dream of where you could be if you didn’t have debt holding you back. If you have credit card debt, look for ways to reduce it.

If we can do it, you can, too. Write out a plan that works for you and stick with it. If you have student loans, we recommend using LendEdu to refinance your loans to get a cheaper monthly payment. If you do refinance, you could save a ton of money on your overall bill.

We have friends that have done this and save nearly $10,000. If you’re interested, check out LendEdu and just fill out an application to see what rates you qualify for. There’s no commitment on your end if you decide not to go through with it but the upside could be huge.

The way we see it, if your plan is not challenging your lifestyle, it’s not changing the way you see your money. Just take action no matter what you do.

What about you? Are you in debt? Do you want to get out ASAP? Why or why not? Let us know in the comment section.


Zack & Jen

Originally published at Your Money Your Freedom.