How Two Teachers Wiped Out More Than $53,000

Jae Bratton

In this series, NerdWallet highlights people’s debt repayment journeys. This month, Jae Bratton tells how the couple focused on erasing debt, fueled by the prospect of starting a family.

Jae Bratton

Result: Over $53,000 in 3 years

My story of paying off more than $53,046 in debt for two teachers’ salaries is one of pain, perseverance and teamwork. But it’s also about love. My husband and I started paying off our mortgage shortly after our wedding in 2016, and we made our last payment three years later, before our son was born.

I was adamant that we would not start a family until we had paid off the debt. Rumor has it that kids are expensive, so I want to make room in our budget for the inevitable medical bills, childcare, and college savings.

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This rumor turned out to be true.

Our four main strategies provide a roadmap for others working toward financial independence.

1. Create a battle plan

Debt fighter, a monster to kill before you can advance to the next level. This requires a well-thought-out plan of attack.

First, we scaled our competitors by identifying our credit scores and organized them into a Google spreadsheet. We had seven debts, including student loans, two car loans, a home improvement loan and what was left of my engagement ring. As each debt was conquered, I erased it from the slate, and oh, the satisfaction.

We chose the snowball payment method, where all extra money is concentrated on the smallest debt and continues to pay the least on the others. I needed a few quick wins to get me motivated before I took on a bigger, scarier balance. We cleared our smallest debt in the first three months, $926.

No sweat if you like the avalanche method, which tackles the biggest debt first. The simple act of choosing one, which suits your lifestyle and personality, is more important than the procedure. Snowball and avalanche are two different paths to the same result.

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2. Fixed budget

After listing the debt and deciding on a strategy, we wrote a monthly budget. First, we considered our income. At the beginning of our debt-free journey in August 2016, my husband and I took home $4,694 a month. By deducting the necessary expenses such as the loan and utilities, groceries and the minimum payment, we know how much money we have for additional debt payments.

A few months, we paid off the minimum debt and that was it. Then, when we had a lot of money, we paid extra, some months up to $3,500. In both cases, the budget determined how we spent each dollar and kept us in check. Did we stick to a monthly budget? Not at all. But we tried every month. And when that month ended, we started again, aiming to do better than the last.

Many strategies, tools, and apps can help you develop and stick to a budget. Pen and paper also work well. (My budget was on sticky notes and dry erase boards.) Whether you like the 50/30/20 budget or love envelopes, know that any budget is better than nothing. Without it, you risk forgetting bills, running out of money before payday and delaying your payment date.

3. Make or find extra money to pay off the debt faster

Send extra money to the debt

Most of the money coming out of our bank accounts before we could be tempted to spend it: tax refunds, bonuses and income from second jobs. For example, my husband was paid to coach basketball and I taught summer school. We both sacrificed time to earn more money, but in a way I returned to the interest: Now, I can be with my son at the end of the working day instead of going to another job. That time with him is so precious.

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Increase your income

I spent two years earning a professional certification that increased my salary by 12%, increasing my take home pay by $250. At the time my car loan was $223 a month, so it was like an extra payment.

Many jobs reward employees for helping with certification or licensing. If yours doesn’t, consider negotiating for a raise or looking for another higher-paying job.

Adjust tax withholding, if necessary

If you get a refund after filing your taxes, that means more of your paycheck is going to the IRS, without interest. Sure, that money is paid back in one lump sum, but you get paid less over the course of the year.

After I got married, I filed a new W-4 to change my filing status from “single” to “married partnership.” Meanwhile, I adjusted my withholding after using the IRS tax withholding estimation tool. It increased my take home pay by $269.

4. Cut expenses

“Just forget about the daily trip to Starbucks.” That advice has become a cliche. But paying off thousands in debt requires more drastic action — and more painful sacrifices — than skipping a latte. So this is what I did.

Charitable donations have been discontinued

Some people will not agree with my decision to cancel the gift while paying the debt. When to give, how much and to whom is a personal choice. For my husband and I, the short break from charitable giving has worked. You can decide if it is right for you.

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Lived lean

Reducing or eliminating expenses is inevitable if you are trying to pay off debt. The good news: there are many ways to do this. Check your bank and credit card accounts and look for opportunities to cut back. Here are just a few ways we’ve reduced the cost of living:

  • My husband found a job closer to home, reducing his commute from 31 miles to 6 miles and saving on gas.
  • We waited a year to do our honeymoon, which was mostly a wedding gift.
  • We carried cash whenever possible: I started shopping for groceries at cheaper supermarkets. My husband, an avid soccer player, stopped playing in a league to save about $20 a week. He even switched to a cheaper razor brand.

5. Save strategically

I have steadily built up my family’s emergency fund, well over the $1,000 that some say is enough for debt relief.

This decision certainly delayed our debt-free date, but on the other hand, a healthy emergency fund gave me priceless financial peace of mind and peace of mind. I know that I can cover the costs of a financial emergency without going back into debt.

Imagine your life after debt

Fuel yourself for the debt settlement journey by imagining life afterward.

I felt a sense of lightness and a deep sense of vitality as I made the final debt payment in 2019. For three years, I was completely focused on our journey. I alternated between regretting financial mistakes and panicking over things I couldn’t afford. After paying off $53,000 in debt, I turned my attention outward and continued to give to causes and give to others. Best of all, I was able to raise a family.

Photo by Jae Bratton.

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