In May of this year, we made the unexpected decision to leave our positions as houseparents at a children’s home (due to safety concerns for our children) and move to a new nonprofit location. The switch brought us from two (still low-paying) nonprofit salaries to one, as we made the decision that I would stay home with our children. We were $32,000 in debt and needed to learn how to survive on $26,000 a year.
The debt consisted of a $10,000 car loan and two student loans totaling $22,000 (and change). I was pretty terrified. However, there are some major benefits in Mr. Sim’s benefits package. Due to the nature of his work, we were provided with free housing for our family, including the cost of rent, utilities, and internet. The company provides a generous medical package, and we qualified for Medicaid for the first time in our lives. We almost decided not to take it, but we learned that our new insurance would not provide for all of the treatments that our children require. Additionally, food in the summertime is 100% provided for. Obviously, these benefits help his salary to stretch.
We still knew that we needed to downsize some “stuff” in our lives. First to go was the car. We loved our 2015 Malibu, but we didn’t love the payment and high insurance that came with it or the fact that it couldn’t safely seat 3 full-size car seats rear facing. Due to some title issues, we decided to skip over private party and sell to Carmax. They paid us $70 more than we owed, so we called it a win! We were able to buy a 2004 Chrysler Town and Country van for $1000 from a family friend with the vacation pay we received from our prior employer.
At that point, I started doing calculations. It was June, and we had dropped our debt to $21,000 by selling the car and making larger loan payments. That was the lowest amount that we had ever owed in our marriage, and it got me excited! By my calculations, we could be out of debt in 2.5 years! While that was thrilling, I started reading Dave Ramsey (again) and realized that we could be more intense about our debt payoff. I kept finding little places to cut in our budget. I slashed our eating out and our groceries to $420/month total. We switched insurance companies and paid the 6-month term to save cash. We changed our phone plan to a no-contract, prepaid plan and saved even more. We chopped Hulu. I stopped buying essential oils on a monthly basis.
However, there’s only so much you can cut from your budget. I decided I needed to also bring in more cash. I started working part-time seasonally where we live because the hours were flexible enough to allow me to do so while our children sleep. I started a side photography business. I used money saving apps and games on my phone. I even started donating plasma!
After making all of these changes, we chopped down our debt free date by a year and landed at 1.5 years. That’s when we decided to get “radical.”
My husband and I are huge Disneyland fans. We love going and had been promising ourselves that we would take our kids to Disneyland after our 2019 tax return. When you make next to nothing and have three kids, those are pretty substantial. I started to feel a sinking in my stomach every time I thought about how much we would be putting toward our February Disney vacation and realized that we wouldn’t be able to fully enjoy ourselves worrying about the debt still hanging over our heads and pinching pennies to make it affordable. I approached Mr. Sim with my concerns, and we both made the decision to postpone the trip until we were debt free. However, by making the decision to use the money from our tax return to pay off debt, we were able to drop our debt free date to March 2019, or only 10 months after we started!
It’s funny how money seems to “magically” appear when you start watching where it’s going so closely. Since May, we’ve received a medical reimbursement check of $1800, a $550 weight loss prize check, and various smaller unexpected amounts that we were able to put towards debt.
As of today, we are just under $14,000 away from our goal of being debt free. That’s $18,000 paid off in 5 months! I’ll keep you updated as we are plugging away at this goal, and I’ll explain in more detail different components of our money-saving plan in the near future.
The moral of the story: don’t accept “good enough” from yourself. You are capable of doing incredible things. Don’t sell yourself short.
