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Home > 11 Key Actions That Helped Us Become Debt Free

11 Key Actions That Helped Us Become Debt Free

August 11th, 2011 at 12:48 pm

You may have noticed by now that I’m a little bit fanatical about living debt free! Helping people realize that dream is our passion! But that wasn’t always the case. Being on this side of the debt-chasm feels great! But getting here was anything but easy.

To start, let’s take a look back at how we got into debt in the first place.

Katy and I started our life together in sunny San Diego, CA. She was in college and I was just beginning a career in real estate. Translation – we were broke! Our brilliant solution was to live on credit cards and Katy’s student loans. One year after our wedding, I was offered a ministry position in Texas. That meant more stable income and lower cost of living. So it made perfect sense for both of us to buy (finance) newer cars and a big screen TV. Fast forward two years where we set at our kitchen table, breaking through our denial and finally coming to terms with over $50,000 of debt. We were overwhelmed, stressed and completely insecure in our financial situation.

From that day at the kitchen table, it took us 16 months to break the chains of debt and open the door to the life we desperately wanted. There were 10 key actions we took that made our debt free dream a reality. They’re the same actions you can take to finally break free of the weight of debt and financial stress.

1. Started Talking
One of the biggest hurdles we had to overcome was to simply start talking about our money situation. We’re both very independent and it was challenging to learn to talk and work together. But if we hadn’t, we never could have become debt free.
Learn how to eliminate money fights.

2. Acknowledged That Our Debt Was a Problem
Like everyone else, we had believed the lie that debt is just part of life. When we finally took a close look at our finances, we realized that debt and payments were bleeding us dry. We also recognized that it just might be possible to live without debt. So we made the decision and the declaration...NO MORE BORROWING MONEY!!

3. Began Learning
We recognized that we didn’t really know how to take control of our money and get out of debt. So we enrolled in a financial Bible study at church and started learning.

4. Got Coaching
The knowledge was invaluable, but we still needed help to apply the knowledge. We made the decision to get coaching from people who were further along this journey. Being coached and mentored helped us apply the knowledge and formulate a specific plan for freedom. There is no way we would have stuck with the process if we didn’t have people pushing us, guiding us and holding us accountable! This was the best investment we ever made!

5. Developed a Spending Plan
A solid budget is the key to anyone’s financial success and we were no exception. Learning to live on a budget was painstaking at first. It was staggering to see how much money just blew with nothing to show for it. Once we decided to tell our money where to go, we suddenly had a lot more of it. And the feeling of being in control was a huge stress relief.

6. Cash Envelopes
There were some budget categories we would tend to overspend on. Groceries, restaurants and entertainment were the toughest for us to control. We chose to implement a cash envelope system for these areas. When we made our monthly budget, we would withdraw the allotted amount of cash for these categories and put the money in an envelope. Once the cash for that month was gone, we had no more to spend in these categories. Instant accountability!

7. Increased Income
When we made up our minds to become debt free, we went into “work our butts off” mode. We quit our hobbies, worked overtime and picked up extra projects and consulting work. I was in a commission-based position and I worked to become the best salesperson I could, in order to increase my income. It’s hard work and sacrifice! But it’s only temporary and it’s worth it!

8. Sold Stuff
Oh, we sold some stuff! Books, DVD’s, video games, board games, clothes, electronics, old jewelry, exercise equipment, furniture, unused wedding gifts... I’m talking garage sales, Ebay, Craigslist, Amazon... We realized these “things” weren’t nearly as important as being financially free!

9. Emergency Fund
Our first big milestone came when we had saved $1,000 as a beginner emergency fund. This safety net kept us from turning back to credit cards when emergency expenses came up. Once we became debt free, we saved up a full 6 month emergency fund. Talk about financial security!

10. The Debt Snowball Plan
There are plenty of plans for getting out of debt. But the Debt Snowball is the best, because getting out of debt is all about changing the way you think and behave. It’s much more akin to weight loss than it is to math homework.
What is the Debt Snowball plan?

11. Specific Goals
One of the most significant things we learned from courses and coaches was to set specific goals. We set a goal to be debt free within 18 months. We wrote it down, we posted it around our house, we told other people about it and we got accountability. Goals are powerful...we hit ours in only 16 months! We never would have become debt free if we didn’t have a specific plan, specific goals and the accountability to keep pursuing them!

Yours In Freedom,


Join the conversation…what specific actions are you taking to help you become debt free?

The original post can be found here: Debt Free

9 Responses to “11 Key Actions That Helped Us Become Debt Free”

  1. Petunia 100 Says:

    I think it's great that you are so excited about being and living debt-free, Clint. It's also great that you and your wife were on the same page and worked together towards your goals. I'm sure that makes for a happy marriage. Smile

  2. LuckyRobin Says:

    Wow, feels like you haven't posted for a while. Actually, I think it was Katy who posted last time. Anyway, making goals is so important. I think for me it is my number one thing. Without setting goals I didn't really know where I was going. It was just a general sort of get out of debt someday thing. But as I make a goal and target each card or plan how much to try to increase the EF by each month, I find it makes a world of difference. The other stuff is all important, but goals was definitely most important for me.

  3. baselle Says:

    I have to second the snowball plan. I got out by paying the smallest first - I NEEDED the quick success. Mathematically it might not have been the best (have to pay slightly more than if you strictly go by largest amount or highest interest rate), but I'd rather be debt free rather than right.

    Around the middle, though, after a couple of quick successes, if one debt was particularly annoying (maybe credit card company were jerks Smile), I picked that one to go after, rather than the smallest. You have to know yourself, and figure out what will keep you going.

  4. Jerry Says:

    These are all great things that lead to success, but I love that your #1 was to talk with each other about money. This makes a huge difference, and if you are married it kind of should go with the territory (although it often does not, sadly). It is the one insurance for improving unity and communication in the relationship... and it also brings progress faster than anything else.

  5. ClintDavis Says:

    Hey all, thanks for your comments. I've been sick the last week or so, which is why it's taken me so long to reply to your comments. Sorry about that!

  6. ClintDavis Says:

    Hey Lucky, It does seem like I haven't posted in a while. I try to get 1-2 now posts out per week, but the last few weeks have been more hectic than usual. The goals were (and still are) HUGE for us! We write them on whiteboards around our house, put them on post-it notes in the bathroom. We're fanatical about setting goals...real, achievable, specific goals. Most people have "wishes" and "hopes". But I have never met a person who just stumbled into financial freedom and peace. It always comes by making a specific plan, specific goals and by implementing accountability to those goals and plans. Keep it up Lucky!

  7. ClintDavis Says:

    Hey Petunia,

    I appreciate your encouragement. It is great to be on the same page as Katy now, but it definitely wasn't always that way. It's taken a lot of work, talking, compromise and sacrifice. It was all worth it to get where we are today! Thanks for the comment!

  8. ClintDavis Says:

    Hey Baselle,

    Yeah, for 99% of folks the Debt Snowball is going to be the best. There's nothing like seeing some success to keep you motivated. But I also agree with taking calculated and planned "diversions" to attack a particularly annoying debt, once you have already built some momentum. You're absolutely right, you have to do what works for you...not just what sounds good...but what actually works! Very well done...keep it up!

  9. ClintDavis Says:

    Hey Jerry,

    I absolutely agree with you...hence making that the number 1 Key Action. I'm a bulldog for marriage. Katy and I have had our share of stress and troubles. But if we would have gotten the counsel and coaching we needed prior to getting married, I think we could have avoided a lot of frustration. I strongly recommend that ALL engaged couples go through some form of financial coaching prior to marriage. If the number one cause of divorce was "not knowing how to dance," I would recommend they take dance lessons. But, the number one cause is stress and fights over money. Many more engaged and married couples should seriously consider taking "money lessons." Thanks for the comment!

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