Nothing kills honeymoon bliss like $52,000 of debt. But that’s exactly what Deacon and Kim Hayes of Phoenix, Ariz. faced once they combined their finances as new husband and wife.
The couple buckled down hard and set an ambitious and audacious goal to be free and clear within 18 months. “The reason we picked 18 months is that I knew we had to have a goal to aim for, otherwise it would take us forever to pay off the debt,” says Deacon. “Putting a time frame on getting out of debt created a sense of urgency that didn’t exist without that time frame.”
So, gone were the credit cards, the cable and a never-used gym membership—and, a year-and-a-half later, so were the lenders.
Money Living: What was your total debt?
Deacon & Kim: $52,000
ML: How long did it take to pay off?
D&K: 18 months
ML: How did you do it?
D&K: We put our entire financial picture on one piece of paper, the Financial Game Plan form, which I now provide for free on my blog. Having all of our finances in one place made it easy for us to figure out what we needed to change to get ahead. We went through each line on the form and we asked ourselves, “How can we make this number smaller?” The goal was to increase our surplus any way we could to expedite paying down our debt.
I did sell my brand new car, which was hard, but definitely worth it. That got rid of about $18,000 in debt. I also got a second job delivering pizzas toward the end of paying down our debt in order to hit the 18-month deadline.
ML: How did you stay motivated during the process?
D&K: We never considered quitting, but we did doubt that we would be able to pay our debt off in 18 months. Since we were paying down the debt as a team, it made it easier to say “no” to all the fun stuff—especially since we knew we would only be saying no for a short period of time. We even had a spreadsheet on the fridge that showed our progress, which helped keep us motivated. It started with $52,000, and each month I would color in how much debt we had left. It was exciting to see the progress visually on a monthly basis.
ML: What is the best part about being debt free?
D&K: Freedom. When we were in debt, we felt restricted. We had so much going out each month in debt payments that it was difficult to do anything fun without incurring more debt. Now that we are debt free, we have been able to do much more than we ever imagined. We were able to go on vacation for our four-year anniversary to Singapore and Hong Kong last year. We have been able to give more to our church and to worthy causes. I was even able to quit my job and start my own business, which has been a lifelong dream come true.
ML: What advice do you have for others who want to get out of debt?
D&K: The best advice I can give is to surround yourself with people that you want to be like. If you want to get out of debt, hang out with people who are debt-free. It is amazing how much the people you hang around can influence your decisions.