How We Got Rid of $136,000 in Debt in 21 Months

getting out of debt
Courtesy Levi Ennis
By Levi Ennis, as told to Michele Lerner

When my wife, Jennifer, and I got married in March 2010, we thought we were OK financially, kind of like everyone else.

Jennifer was working two jobs, and I was working at one part-time job and looking for work. While Jennifer came into our marriage with a $20,000 car loan, I was the one who brought along a lot of debt: $20,000 for a car, $70,000 in student loans and $26,000 on a vehicle that I had co-signed on for my brother.

Yet even though we owed $136,000, we really weren't that concerned about our debt because it seemed normal to us to have car payments and student loans.

The Wake-Up Call

At our church, we signed up for a four-week mini introduction to Dave Ramsey's "Financial Peace University." At the first session we were asked to write down our total debt on a piece of paper.

There were five couples in the room, and the total debt for all of us was $300,000. We were pretty shocked that one-third of the debt in the room was ours.

I'd always been told that student loan debt was "good debt" and Jennifer thought that having a car loan was normal, but after this session we decided to get serious about paying it off.

The Plan

The first thing we did was write down a budget. We created two spreadsheets: one for our income and expenses and the other for our debt snowball. The snowball works by paying down one debt and then applying that payment to the next debt and so on until you're debt-free.

At first it looked like it would take us five to seven years to pay off our debts, but we decided to focus intently on it and eliminate it faster.

In the end, it took 21 months to pay off everything. That's because we devoted 70 percent of our income to paying off our bills.

First, we traded in both of our cars for one car. We carpooled for six months until we could save enough cash for me to buy a used car. Trading in those cars eliminated $21,000 in debt right away. That was a tough sacrifice for both of us because Jennifer loved her SUV and I loved my pickup truck, but it also got us off to a really big start.

Courtesy Levi Ennis
Courtesy Levi Ennis
Boosting Income

Jennifer and I have worked anywhere from two to six jobs at a time to bring in more money.

Jennifer works in human resources full-time and also serves tables at a restaurant for extra income. When we got married, I was driving a Zamboni machine, and then I got a full-time job in purchasing. I also teach private ice hockey lessons on the weekends to supplement my income, and coach a high school ice hockey team.

One of the more unusual things I did to bring in extra cash was to respond to ads on Craigslist looking for models. I was paid to be a "test dummy" so that techs could practice giving ultrasound tests.

We also started selling things that we didn't need, like a second computer, small appliances, and even my Xbox.

When we ran out of stuff to sell I started doing something a little more creative: dumpster diving for things we could sell. I would go around on trash pickup day and grab stuff that people had thrown out, like old TVs and a barbecue grill, and sell them on Craigslist to bring in extra cash.

Cutting Costs, But Not Fun

We made a pact to keep our expenses to less than 30 percent of our income, which meant we had to give up some luxuries.

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We didn't have cable TV or smartphones. We quit going to the movies and started borrowing them from the library. For entertainment, we'd go to parks, hike, go to the zoo on free admission days, and search for half-off deals.

We limited ourselves to $200 a month for spending money and $350 a month for food, including both groceries and eating out. Jennifer became an expert at clipping coupons and watching for buy-one-get-one-free deals.

I traded private ice hockey lessons in exchange for hotel points and airline miles. One parent didn't have the cash for the lessons, but he had millions of miles from his work travel. We were able to go to Seattle for our first wedding anniversary using those miles and go on another trip to visit Jennifer's family in Minnesota. We also went to Missouri for a long weekend by agreeing to take a time-share tour. We got a free hotel room and meal vouchers, and only had to spend an hour touring the time share.

The Payoff

Since April 2012 we've been debt-free. Once we were debt-free, and with God's favor and blessings, we kept up with our discipline and put that income into savings.

Now we have a contract on a house that's being built and we project that we'll have $80,000 in savings for the down payment and an emergency fund by the time it's ready in November. We're amazed that we're living debt-free and that we can buy a house when we're only 28 and 29.

Even more important to us, though, is how good it feels to have the security of money in the bank to tide us over if anything bad happens.

How A Family Of Four Manages To Live Well On Just $14,000 Per Year
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How We Got Rid of $136,000 in Debt in 21 Months

"My husband told me he'd heard about this book, ["America's Cheapest Family Gets You Right on the Money]," she said. "We talked about it over the phone and I read it and thought how it could apply to us."

The couple had a single savings goal in mind –– scraping together $30,000 for a downpayment on their home in their native Henderson, Nevada.

The mindless spending was out, and Wagasky came up with a budget she could make work.
"I changed the way I was grocery shopping and started working my way up, " she said.

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Wagasky barely knew her way around a kitchen when she started her money makeover.

Now she's an avid cookbook collector (she checks them out from libraries or asks for them as gifts to save), and it's one of the simplest ways she's managed to cutback on spending.

With a $7 bread-maker she scored at a local thrift shop, she never spends on store bought slices. She's not shy about professing her love for wholesale stores like Costco, which is her go-to source for baking ingredients.

Above Wagasky's twist on homemade Sloppy Joe's.

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"Everything must be budgeted," Wagasky wrote in a June entry on her blog. "From family outings, to toiletries to clothes purchases. It must be budgeted."

And she takes Do-It-Yourself to the extreme. Everything from laundry soap and clothing to the kitchen her husband installed in their new home was either crafted by hand or thrifted.
She swears by this home-made laundry detergent recipe. (pictured above)

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When it come to cutting costs, cable was as easy luxury to part ways with.

With two children aged 6 and 8 to entertain, Wagasky invests $14.99 in a Netflix plan and recently added Hulu to the mix.

The family also uses a simple antennae to pick up basic cable channels.

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With a single source of fixed income, there's no room for impulse purchases in the Wagasky household.

They budget $400 for groceries each month and that's it.

"Once that $400 is gone, it is gone," she writes. "There are no extra shopping trips made because there is no more money."

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Wagasky said they have no credit debt, but they do charge emergency expenses on plastic when absolutely necessary.

"We recently had some medical bills we had to pay, and we were able to take our savings and pay those down as fast as we could," she said.

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With gas prices creeping higher each all the time, the Wagaskys watch their mileage like hawks.

That means combining errands together and doing all they can to make one take of gas last a month.

"We know we don't get to drive and visit family often, so when we do we cherish it," she wrote in a blog entry.

"We don't go just for an hour, we stay and visit and even run errands that may be close to where we have family. We try to remember that when the gas is is gone."

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After Wagasky's husband left active duty and started school, the couple knew they would only have $14,000 per year to live on.

So they paid off the $8,000 he owed on his truck while he was earning more and they could afford the expense.

They also bought a van, which they saved $10,000 for initially and were able to pay the remaining $12,000 owed within a year.

Having zero car payments is a nice relief.

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Like anyone with simple math skills, Wagasky was quick to realize how much cash she was wasting on prepackaged snacks for her children.

She cut them out completely and whips up homemade granola bars and trail mix instead.

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If you're on a tight food budget, your freezer will become your best friend.

Wagasky chops vegetables and fruits and freezes them for a month. She actually does the same for dairy products like cheese, butter and yogurt.

"I am able to freeze about 8 gallons of milk each month," she writes. "They sit at the bottom of my freezer and we thaw them out when we need them." Baked goods get the same chilly treatment.

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Wagasky was dubious about joining a food co-op, but after three months, she realized she would never beat the savings or quality she found.

Food co-ops pool membership fees together in order to fund a monthly harvest that's distributed at designated pick-up points.

A couple of times per month, Wagasky gets a basketful of in-season produce for $15 –– way better bargain than she'd ever find in stores.

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By the time Wagasky's husband came home from Iraq, they had managed to scrape together the $30,000 they needed for a downpayment on a home.

"But we decided the best option would be not to have a mortgage payment at all," she said. "We found a fixer-upper that didn't have a kitchen ... and we paid cash."

Price tag: $28,000. With the leftover cash, they were able to finish the kitchen and install wood flooring throughout the house.

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