Out of debt: 5 steps

I recently revamped our debt-snowball to include: our car, & a few student loans that we are responsible for paying off.

So, it looks a bit different from what I shared with you last fall.

One reason (there are many others) that Joseph chose the Air Force is that paying off our student loans, in this lifetime (or a least before our oldest graduates from high school), is actually feasible.

Between the $65K student loan repayment (specific to belonging to the JAG core) & PSLF*(Public Service Loan Forgiveness), we are able to pay off our student loans on a public servant’s salary without living in poverty for the next 20 years.

As I’ve said before, our debt isn’t because of frivolous spending, it’s because we chose to have four children, put Joseph through law school, & had nearly a year & a half of unemployment. Lest I sound holier-than-thou (“my debt is better than your debt, so there!”) I want to make it clear, regardless of the reasons you’re in debt, the more important issue is getting out, & staying out.

Being debt-free (aside from perhaps a mortgage on a modest home within your income) is something that most Americans cannot fathom. I know, for me, there are moments when I see the numbers of what we have to pay off ($92K left!) & at times I find the task arduous, impossible.

So far, we’ve been at the debt-slaying process for about 7 months. We’ve paid off over $13K already, & are on our way to be completely debt-free* by January of 2016.

Here are some things that have been helpful to us.

Putting your debts on paper is scary.

(Believe me, just looking at that $92K number is making me sweat.)

But seeing the numbers, writing them down, is the first step in getting them to go away.

An excel spreadsheet does the trick, & even better, is a free downloadable debt snowball calculator by Vertex, that I have used (& love it) since we started going debt-free.

I highly recommend putting your debts into a debt snowball.

This idea is not unique to Dave Ramsey–many other programs use it & teach it. I know my church teaches it. (More info can be found in One for the Money.)

We are paying our debts off by highest interest rate first. Fortunately, all of our debts have interest rates of 6% or less. Another benefit to being active duty military–all of our debts (except for federal student loans) qualify for SCRA benefits which require that loans not exceed 6%. Our three credit cards carry a 6%, 4%, & 0% interest rate because of SCRA. Otherwise, well, I don’t want to think about the rates at which they used to be!

Even though our interest rates are low, we are still saving at least a thousand dollars in interest by paying off our debts highest interest rate first. I understand the psychology of paying your debts off by lowest balance rather than by interest rate, but I still think that by paying in order of interest rate can save you a lot of money & is more often than not, the better choice.

Budgets used to suck.

I remember getting my first checkbook.

I’m not that old, but in 1999, people still used checks for a lot of stuff. I hated balancing my checkbook & (almost) always failed when I tried to write a budget down on paper & try to stick with it. I remember the bounced checks, the overdraft fees I had to bear as a 16 year old because I forgot to record a check or messed up on my math.

But oh, how the internet & technology has changed all of that.

With everything digital, I can keep track of all my accounts by just going to one site.

(I use mint.com, but there are oodles of free programs that do the same thing.)

I can see in real time where I stand with my budget. There’s very little room for human error when all transactions are made with a debit/credit card & immediately go into our online budgeting system. Joseph can check it whenever he wants, I can check it when I want, & it makes it all very easy to keep track of things.

And, it’s fun. I love how easy technology has made it to track & follow spending.

So make a budget. You have to.

You don’t have the luxury like no-debt folks to be fuzzy on the numbers. You’ve got to make every penny count, & the only way to really do that is by figuring out where you’re money is going.

Make a budget you can live with.

Once you’ve put down all your income & non-negotiable expenses (like rent, utilities, & no a smart-phone is not essential unless it’s for your job, but even then..), make some room for a *few* splurges (we still spend $115 a month on dates & would stop eating before cutting out that expense). Then the rest go towards debt.

Anna, of And Then We Saved, has some great tips for this.

While your goals may change over time, your guiding principles should not.

What are some of your guiding principles?

When Joseph & I sat down & talked about our long-term financial goals, our main guiding principles are: we want to be debt-free,  live below our income, & pay a full tithe to our church on 10% of our earnings. Those are principles that we want to live for the rest of our lives.

Beyond that, our current short term goals (other than getting out of debt) include having a 6 months savings & begin saving for retirement as well as save $10K for each child to receive when they graduate high school to help them with a mission, college, &/or trade school.

There is (so) much freedom in being debt-free.

For me, thinking about that moment, when we pay our last debt, & then knowing that all of our income will be ours to do what with we will is a beautiful, liberating feeling.

Currently we pay nearly $2K a month (all of our income after the “necessities”) towards debt.

By the time we’re debt-free that amount will increase (due to yearly pay increases) to $3400, or thereabouts. I can’t even imagine what we’ll be able to do with that amount of money.

Save for retirement, cars, go on vacation, put our kids in music lessons & sports. The possibilities give me goosebumps.

Yesterday I was swimming in our community pool.

It was dusk. Joseph was at home watching Harry Potter (the 2nd one) with the kids (he just finished reading the book to them). As I was floating on my back, fluttering my legs, stretching my arms, & gazing at the wide open blue, I was struck by how much I’m loving life in spite of our frugal circumstances.

Do we have a ginormous amount of debt? Yes.

Are we on a strict budget, where every penny is pinched? Yes.

Would most people say we’re crazy because we set our thermostat at 82F & don’t have cable, smart phones, or take vacations even though we “can”? Yes.

But working towards this goal of a better, more free life, in the process, is showing me how much there is in life that is free & good. It also makes me grateful for all the amazing things we do have.

We’re discovering ways to have fun without money. To work together, to communicate. And that, friends, is fun.

*These loans, as long as Joseph is in public service, are paid via this program.
**All debts other than & the mortgage on our home (now a rental property) & $80K in federal student loans that are covered under the PSLF program.


What do you think the hardest part about getting out of debt is?
What things have you found helpful on your journey to a debt-free life?


If you have successfully gotten out of debt &/or are living a debt-free life, please share your insights, tips, words of wisdom.


  1. Pat
    on December 15, 2014 at 1:28 pm said:

    Do you feel good about Mint.com’s security? I was thinking of using it and the lady at our credit union seemed skeptical. Granted she is in her 60’s but I thought it had a good reputation? I also thought that my 18 year old might like it to learn budgeting, etc. Any insights are appreciated!

  2. Richard
    on February 10, 2014 at 1:16 pm said:

    Yeah, I see my debt, and quite frankly I really care less. Maybe if people stopped paying their debts this loan companies might flop, and new companies will think twice about giving out loans based on a stupid three digit score… “wooooooo I am the FICO score, I can’t hurt you or throw you in jail, but you will fear me if I drop too low.” People stop worrying about debt. Pay off you debt(s) now, even if it means you have to work at BK by nights to do it. Don’t even think about pulling out a loan unless it be a home mortgage. Make only $36k a year? make sure you home loan payments are not over 1/5 of your monthly budget. You have a lot on your plate, between ever freaking bill that exist out there today, don’t let a three digit number scare you. Make sure your livelihood is paid off first, if it takes an extra 20 days beyond the “pay by” for a credit card, who cares. These people are no loan sharks and will not pay break your thumbs. If you are young and don’t have money for school, well don’t pull out a loan, find a grant and start off at a community college. Any way I could rant for hours, so I’m going to cut it off here. If you are a slave to your credit score, which has no weight on you after you die (nor your family unless their SSNs are on it) please reply so it will give me a good laugh.

  3. Elise
    on January 8, 2014 at 1:49 pm said:

    I love this entry! My husband and I don’t have any kids, yet, so I feel like we have a head-start on all of this! We use mint.com. Although, I have to admit that I don’t log on as frequently as I should. Two weeks ago, we completely paid off my student loan with the highest interest (10.75%), and it felt great!

    These past few months we’ve been working hard to spend less money on unnecessary spending (going out to eat, going to movies, picking up dinner on the way home, buying books and movies, etc.). January has been designated “No Spend Month”, so absolutely no unnecessary spending and less than $1/day to spend on food items. So far so good! I’m excited to see how much we can save this month and how much extra we can put towards our student loans this month!

    I love your blog (just found it), and I haven’t read any food entries, but I heard that you’re vegan/plant-based, too!

  4. Brenda
    on October 24, 2013 at 6:08 pm said:

    Janae – I want to tell you your goals are right-in-line with our goals…to be a debt-free family by next summer 2014 and have xx amount of money in the bank…cash. At times, it seems like we’re all alone (I see it all the time…people dropping oodles of dollars on all kinds of “wants”…not “needs”) but it has been awesome to see our debt dwindle and our savings grow. Thanks for your open honesty on this blog. I enjoy reading your story.

  5. bethany
    on May 3, 2013 at 2:34 am said:

    Love this, and totally hits home. Here’s something I have written out…or even shared with those outside my family yet: We’re moving…in seven days. I’ve spent the past 24 hours packing boxes and making flight plans. Gabe is taking a short term position in the Middle East where he’ll live right on the base, and I’m moving back to the US to get life settled there. So, I’m also processing the idea that we’re going to be apart for seven months.

    All of this is due to finances and debt. We’d planned to eliminate debt while we were in Kuwait, and on paper it looked plausible! But due to a slower-than-planned house sale and higher-than-expected cost of living, our debt level hasn’t budged much in a year. But just by leaving Kuwait + reestablishing in the US, we cut out $3,000/month in living costs. And the short term position will pay double what we make now. All said and done…it’s not ideal. But, our debt is gone by the end of the year.

    It’s a huge dose of reality, and I guess we’re taking the hard route so that by 2014 we can breathe. Like you said, the pressure of debt is a bit overwhelming. But when you stare it in the face and make a plan, you’re the one who has the power. I think our culture is often geared to avoid or ignore their debt…just pay the minimum, don’t think about it…and it time it will go away. But we’re just not willing to play that game. I want to be free!

    Definitely will refer to your tips in the coming months! 🙂 Thanks for always being so honest + helpful with your budget and debt advice!

  6. Ricki
    on May 2, 2013 at 6:43 pm said:

    Great post, Janae. And yes, it can be scary, but it feel so good when you’re out of debt! After my divorce, I was left with pretty much nothing. I spent a year figuring out how to entertain myself for free and did volunteer work (which can work wonders for making you appreciate what you do have, too). Then I started saving with the “loose change” trick (ie put all loose change at the end of the day into a jar, or whatever) and that gave a huge boost to my down payment on my very own home six years later. It really can be done, and you are doing it with style! 🙂

  7. Carrie Chapman
    on May 1, 2013 at 6:09 pm said:

    My husband and I just sat down and took the first few steps of this. Writing down the debt was by far the scariest, but afterwards it was the best part! Knowledge is power, and even though we were a little taken aback, we felt so good and motivated! It’s amazing to see what a strict little budget can do to your debt in such a short amount of time.

    • Janae Wise
      on May 1, 2013 at 6:52 pm said:

      I agree, writing down the debt, looking it square in the eye IS the scariest part.

      “It’s amazing to see what a strict little budget can do to your debt in such a short amount of time.”
      There are so many paralells between weight loss & budgeting I could go on & on. The little cuts here & there really do add up. Similarly, the extra expenses (be they “little”) can really sabotage goals for getting into a better place financially. The key is consistency & seeing the bigger picture, the end goal & sticking with it.

      Is your husband still in school? When we were in the middle of law school, especially towards the end when there was a lot of uncertainty about securing a good job, I was a wreck. I tried my best to ignore the ever increasing debt & tell myself I could do nothing about it. However, in retrospect, one thing I would have tried harder to do is to save more money on food. Now that really tighting ship, I realize how much I could have saved on groceries had I been a bit more prudent. I suppose hindsight is 20/20.

      Anyway, thanks for stopping by (you have a beautiful blog, btw). Good luck with debt-free process–it’s a journey that requires patience & time, but so worth it. And remember you’re so not alone in this!