How We Broke the Bondage of Debt
So we became debt free. But how did we do it? How did we really go from $43,000 consumer debt to $0 in 18 months?
This was by no means an easy process. Changing behaviors and adapting to a new way of living requires time. And you must be patient with yourself on your own journey.
In this post, I share four practical steps we took on our journey to breaking the bondage of debt. Why bother reading about our journey? You don’t have to. Seriously.
But if you can relate with debt, then our journey might connect with yours.
Courtesy of Images_of_Money | Flickr
We consolidated out debt
After our first baby step of believing we could be debt free, our next practical step was consolidate our multiple ‘single-life’ debt into one account.
In retrospect, it was the right thing for us. For us, marriage is an institution of one, including cash and debt accounts. Debt consolidation gave us single perspective on what we were dealing with.
If only that was the end…
We quit borrowing more money
Second thing we did, as part of our debt consolidation decision, was resolve NEVER to borrow more money for consumer spending. Not a penny more!
We performed ‘plastic surgery’ on our credit cards (cut them up). It was a statement of intent, one we have been graciously helped by divine providence to keep till this day.
We now have one credit card account and purchases are directly settled via our current account in full… by default. This way we only get to spend money we know we actually have, on things we can afford.
We got on a budget and stayed on it
Money management is about attitude and discipline. God is interested in our attitude and approach to managing resources. Money is a spiritual phenomenon for Christians; we are stewards.
Temi and I spent several days drafting a budget template (and content). We started by grouping our gross income and listed every monthly expenditure item. It didn’t take us long to realize the basic rule of money management: If you spend more than you earn, you will be in debt!
Easy, right?
Instead of settling for this rule, we took a different approach. If we were going to become debt free in the timeframe we desired and have the freedom to live the life we want, we had to do more than live within our means.
Here’s what we did:
We chose to live below our means.
That’s right. We cut down dramatically on our expenses and decided no family emergencies would make us break the bank ever again. This way of living has become our ‘new’ normal.
You can’t live the way that got you into debt and expect same way to lead you out of it. – Share this.
We saved money
By getting on a budget, cutting out all excesses and living below our means, we were able to start saving money each month. No premium shirts (didn’t buy one in two years), no weekend Indian curries and no eat outs at our favorite restaurant. We ‘gave every euro a name’.
Temi likes to tease me sometimes with: “Hmm, we make a business case for every cause”… but it worked. It was exactly what we needed.
The saving process taught us so many lessons, one of which was focusing on what was absolutely necessary to change our family tree. It wasn’t easy but worth it.
Take a look at this awesome video by Dave Ramsey. You will love it! Breaking the Bondage of Debt
Question: From your experience, which of the four steps have you found the most challenging when it comes to managing your money? Share in the comments.
About Joseph Iregbu
From a homeless, near-school-dropout to living a story worth telling. Purpose is my passion. What's your story?
Recently my wife and myself have been being more consistent in doing our budget together. It’s greatly helped us stay on budget. Great post and thoughts!
Budgeting is one of the toughest part of the process because it requires great discipline. But when you stay with it, it can be a great tool to help you stay focused. Thanks Dan for sharing.
I’ve found it a little easier with the help of my wife, many hands make the work light. Glad to share.
Great tips!
About four years ago we went down to one income.
At first we were scared we couldn’t do it. But we’ve discovered how faithful God is. We’ve even been shocked at the end of the year to see that we have actually given more back to God when we made less! And yet we never went without.
God is awesome.
Oh, and my husband likes charts. We use Mircosoft Money. Charts really help us to see where our money is going: Bills, Savings, Charity, Dining out, Clothes, Food and so on.
Hi TC, we used good old Excel with customised charts, etc. The awesome thing was how the color codes kept changing each month as our outstanding debt figure went down (from red to amber to green) 🙂
You made an important point: when we manage God’s resource better and give in the process (rather than withhold), God proves faithful. That’s amazing.
His ways are strange sometimes, but we can count on them! His word is true!
Thanks for detailing how you and your wife acted to become debt free. Congrats! This is encouraging for loads of people.
David, thanks. I sincerely hope it encourages people. I used to think only the rich could be debt free until we took the plunge. The process has changed us significantly.
Debt consolidation does provide perspective. There are some interest free options for 15 -18 months which can really help reduce the amount paid in general while hasting the process of being debt free.
Hi Yemi, true but debt consolidation, I must confess, doesn’t solve the problem. It’s an early step on the ladder. The biggest part is changing our behaviors and how we view/relate with money. Perspective is definitely a good way to start I must add. I know about the interest-free options and if you couple it with other practical tools, it helps. Thanks for sharing.
That’s fantastic! Congratulations. I’ve been working on my own consumer debt for the past year, and while I’ve made significant progress, it’s not even the same order of magnitude as you guys.
These fundamentals are just that, fundamentals. There’s no secret sauce or quick way about it. It’s about making a goal, setting the appropriate tasks, and following through consistently. It’s great to see stories like this that show it is in fact possible. Thanks for sharing.
Hi Ryan, thanks. You know, we always thought only rich people could be debt free. But you’re absolutely right about fundamentals and principles. When you set your mind to it, anything is possible. Thanks for reading and sharing.