When Brad and I were married 5 1/2 years ago, we each brought a lot of (student loan) debt baggage.
And then we bought more.
Honestly, we weren’t trying to be irresponsible. We just did what we saw everyone else doing. We had two incomes, no children, and we were incurring “smart debt.” (What an oxymoron!)
Together, we had $70,000 in student debt (3 loans).
Then we bought a house with two mortgages for $150,000.
When Brad’s car died, we spent $18,000 on a used pick-up truck.
Before you knew it, we had $238,000 in debt!
So we got serious about our debt and paid off most of my graduate school bills as I incurred them (without interest).
We lived as if we had one income, and put the other income into our debts.
Then we moved to China as the American economy plummeted, and our house’s value turned “upside-down.”
Then we heard about Dave Ramsey’s Debt Snowball.
We paid the truck off as fast as we could, finishing in winter 2010.
When Brad was laid off, we moved in with my parents.
We paid off the two smallest student loans this past winter using our tax refund.
We also put a large payment into our smaller mortgage, with the highest interest rate.
Our next goal is to pay off the remaining $15,000 on the smaller mortgage.
As of today, we owe $26,000 on our last student loan.
We still owe $124,000 toward our two mortgages.
So we are $150,000 away from being 100% debt free,
And we are $41,000 away from paying off everything but our larger mortgage payment!
We have paid off $88,000 in debt (not including interest) in 5 1/2 years!
So we haven’t done too badly for being in full-time ministry for 3 years, half salary for 6 months, unemployed (or underemployed) for 9 months, and living on one income while adding two children over the last 2 years. We could not have done it without the support of our family and friends (and even strangers!), and God’s generous provision.
We are so excited for the day when we can do ministry without the hindrances of debt!
If there were any financial advice we would offer to those preparing to enter ministry or non-profit work, it would be this: “Be Debt-Free!”
What are your financial goals and how are you accomplishing them?