How to Become Debt Free: My Personal Tips and Advice for Debt Free Living

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What is it like to be debt free? I’m sharing my own journey on how I became debt free and how it totally changed me and my family’s life.

In 1996, we started our first business. I was 22 and my husband was 24. My husband and I were both working full-time and part-time in our business. In 1999, my husband left working for someone else and went full-time in our business. When our daughter turned 11 months old in 2000, I left my full-time corporate job. I remember telling my husband we had to be on a strict budget. But the truth was, I really didn't know how to budget. I would only pay us what we needed to pay our monthly bills and whenever I started with the budget I would pull all the bills out and then I would pay us, but at the end of the month we would always be short. I couldn't figure out why we were always short.

It wasn’t until 2015, that I learned how to budget. In 2012, I started hearing about “Dave Ramsey's Financial Peace” course, becoming debt-free. In 2015, I got my husband on board and we did the online version. We watched every episode streamed from my Mac to our Apple TV and did all the work. I printed out the workbooks and we each had our own and followed along answering all the questions. We got so excited and wanted to do as much as we could as fast as possible. We sometimes watched more than 1 lesson per week! It took a while for us to get used to it. This course teaches you to start making a budget; it takes about three months for that to stick and you to figure out exactly what you're doing.  

In January 2017, I convinced my husband and our daughter (17 at the time) to move out of our home that we’d been in for 18 years, and move into our RV in my parents driveway for a year so that we could pay off our debt. I know, how crazy was that? I can't believe we did that and I don’t expect everybody to do the same. But that was the turning point for everything. 

In that same year, we paid down $62,000 in debt, which was all of our debt at the time except for our mortgage. We saved $8,000 at the total of $70,000 for the year.


3 Positive Things Happened That Year When We Were Living On One Paycheck:


  1. We were able to lease out our house for double the amount of our mortgage. I was able to pay our mortgage plus we were then able to pay down debt along with one of our other paychecks added. Everything went to paying off debt!
  2. My daddy was the one who encouraged us to get an RV. Our daughter was playing Judo at the time, and so we split it with him and he basically said we're buying this and you're paying for half of it and so we did.  
  3. In 2017, I was able to pay off that debt, early. It was very important to me to make sure everything that I had ever borrowed from my Daddy, I paid off before he died. Though, it was just on principle, because I knew I didn't have a lot of time left with him, but it was important because he had always taken care of me and I wanted to make sure that he knew that I appreciated it and how important it was for me to pay him back. I also got to spend a year with my parents that I'll never forget.


What was the result of us starting and making a budget? We followed “Dave Ramsey’s 7 Baby Steps” and paid off all our debt by the end of 2017. In the beginning of 2018, we fully funded our emergency fund with 6 months of expenses. In March of 2018, we started saving for our retirement (something we had not done since being self-employed in1996). We created a retirement fund with $15k for our daughter that will grow with compound interest for 40+ years and will eventually be worth $2+ million when she retires. We paid off our home in September of 2020! Now we only have to pay the taxes and insurance ourselves, whereas before it was coming out of the mortgage every month. 


Here are My Tips and Advice To Be Debt Free and Live A Debt Free Life:

Learn how to budget with a zero-based budget - This does not mean having $0 in your bank, but it's knowing where to spend every dollar so that you “tell your money where to go instead of wondering where it went” - Dave Ramsey. Dave Ramsey's big message is that “you know you have to plan”.

Plan your budget ahead of the following month -  This gives you time to discuss anything that you need to add or take away. Have a budget committee meeting with your spouse/partner or if you are single find an accountability buddy. Schedule a specific day in a month to pay your bills. On the 1st of each month, I have it on my schedule to pay us for the month, go to the bank, pay my bills, go to the vet, order dog food & cookies, order groceries, do my cash envelopes, do my budget binder and record everything in Quicken. I do all these things so that I can have everything done on the first day of the month and will have less worries or bills to pay for the rest of the month.

Divide out your difference and create Sinking funds -  We have this for things that come up throughout the year, for example, I have set an amount that I will spend on Christmas, Christmas lights, Vacation, RV repair, RV insurance, and so on. Our sinking funds are in our savings account at our bank and our emergency fund is at a separate bank that we don’t see constantly so that we aren’t tempted to make something an emergency that truly is not: like Christmas or that new shiny thing. Cash envelopes are for what we pay with cash each month and only used for what it is earmarked for. If you run out of money in that envelope, stop spending. You will have to wait until next month to budget for it. If you don’t have cash, don’t buy it. A perfect example came up recently that one of my guests said to someone (that I mentor) that wanted to have breast enhancement that they could just use Care Credit. I said, “No, because you don’t own your boobs, Care Credit does.” Just because you pay with a card or can make the payments doesn’t mean that you can “afford” or “deserve” to have that thing. If you don’t pay cash, YOU don’t own it, someone else does.

When paying yearly taxes and insurance, divide that up every month - This becomes very efficient because you will know at the end of the year, every year, when it's time to pay, you’ll have that money available. If you happen to be a little short then it would not be devastating because you’ve already set aside that money and could still budget a little more.

Create an emergency fund - As mentioned above, we have a six-month emergency fund in a money market account and we just continue to let it grow. This fund is not to “make you money” like an investment, it is there to be liquid and available for an emergency. You have to be disciplined to not spend money that you put aside.  

Do not get credit cards - Dave Ramsey also teaches not to have credit cards. If you have credit cards, it makes you think that you can buy anything anytime. You just put this or that on the credit card and you'll pay that next month or pay when the bill comes, and something else always comes up. Before you know it, your bill accumulates and you realize you don’t have enough money to pay for it. You spend money that you don't have and you just keep buying thinking that you have money, so whenever you spend with a credit card it doesn’t hurt but if you spend it with cash it hurts your wallet to give away that cash. You will pay more attention to what you're doing or buying when you're spending with cash.

Start saving for a retirement account - We followed the way that Dave Ramsey teaches on how to save. It is incredible how the funds have grown! We maxed out our Roth IRAs and then once we did that we created one for our daughter. No one else is going to support you in retirement, that is your responsibility. When all your debt is paid, you are now paying yourself, not someone else!

Start saving for a non-retirement account - Once our retirement account was funded, we started saving an additional amount every month for a non-retirement account that could grow as well.  Dave Ramsey suggests that you put 15% of your income towards your retirement. Since we’ve exceeded that amount, every month we put $2,500 to $2,600 a month into our retirement and then just let it continue to grow with compound interest. We have a lot of making up to do! If we would have started when we were young, we would be so much further along! The key is to start!


We own our cars outright, we own our building for our business outright, and we own our home. We own everything. We don't owe any bank or anybody anything.

Soon we will go on a vacation and we'll have the money to pay for it. We won't have to worry about whether or not there's enough money to go or whether we'll have enough money when we come back, because we'll just spend the money from our vacation fund for our vacation. I can’t wait to feel free to truly enjoy our vacation! We have been saving since 2018 for our vacation fund and a trip budget will be made. At any point, we can just take off and have a weekend getaway but we have continued to keep our heads down for when we can just go!

It has been very hard work starting from 2015 up to present time, but it's really not in the grand scheme of things. I haven’t completely totalled everything up but I estimate that we have paid off $500,000+. You have to stay positive and you have to keep reminding yourself of the end goal. You can do this!

How about you? Have you started living a debt free life?  If I can help you on your journey or be an encouraging voice on how to become debt free and still save money, let me know!