Last month, we kicked off the first installment of the Aha! Moment debt interview series with Krystal, who paid off $80,000 of debt with her husband in under four years. Today, I am excited to bring you the second interview in the series. Jessi is a work-at-home mom of three kids who has paid off tens of thousands of dollars in debt, along with her husband.
Jessi’s story reminds us how becoming parents can be a humbling experience. The cost of daycare in the U.S. puts many parents in a tough spot. You can’t afford to work and you can’t afford to stay home. So, what do you do? Well, Jessi and her husband did the work to get out of debt!
If you would like to be considered for an interview, drop me a note!
Let’s get started…
Aha Moment Interview: How Real People Get Out of Debt
Tell us about yourself!
I’m Jessi, from Woodstock, Georgia and I’m a wife of (almost 9 years) and work-at-home mom of three kiddos (ages 6, 4, and 2), and I’m a personal finance coach.
How much debt do you have today and where did you start?
The only debt we have left is our mortgage which is currently $17,273.30. Our peak amount of total debt was over $100k in 2013. We had two credit cards, a car loan, my student loans, and our mortgage.
What was your “aha” moment that made you realize you had to get out of debt?
Our “aha” moment came at the beginning of 2013. Our oldest child had just turned one and we were in the second trimester with our second child.
I was a stay-at-home mom and had just graduated from college the year before. I was going over our finances trying to determine how much wiggle room we’d have in our budget once our second child came and I realized that we weren’t going to be able to afford for me to continue to stay home, but we really weren’t going to able to afford for me to go back to work with the cost of daycare.
This prompted an intense, honest and much-needed conversation about money with my husband and from that moment forward we decided that we were going to start the debt-free journey. After hearing about the debt snowball, we decided to list out our debts with the smallest balance first and work our way up to the largest balance (my student loans). Then we attacked our debts one-by-one.
What lifestyle changes did you make while paying down debt?
I had to take on side hustles like walking dogs (which wasn’t fun in the Georgia heat while hugely pregnant) and my husband had to pull in side jobs to help generate additional income to throw at our debt. We even stopped buying paper towels, laundry detergent, loaf bread, and lotion. We made the laundry detergent, bread, and lotion by hand which over the course of the year saved us over $1,000!
We even slashed our grocery budget and utility costs by growing vegetables in a garden and avoiding touching the thermostat.
Did you have a side hustle (side job) to help you pay down debt faster?
I started my blog, jessifearon.com, walked dogs as a weekly side hustle, and sold off everything and anything that we didn’t need or want to help pay off our debt even faster.
What was the biggest setback you’ve faced while tackling your debt?
My husband fell out of two-story home (he’s a contractor) and shattered his wrist and fractured his elbow. The company he was working for didn’t have workman’s comp so we had to pay for the surgeries and recovery our self which wiped out our savings. So, we had to put our debt payoff on pause while we built our savings back up. Thank God we had those savings!
Did you and your spouse have any differences of opinion on how to get out of debt? How did you get through it?
Yes! We both believed in getting out of debt but my husband wanted to skip over paying off the credit cards first (they were the lowest balances) to paying off my student loans. We ended up paying off the credit cards first because when I ran the numbers, we would end up paying a small fortune in interest by holding off on paying off the balances on those two cards. It took a lot of discussion – which wasn’t always easy, but in end, the math is what won over the decision.
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Did you use a debt snowball or avalanche?
For those of you who don’t know, you can read about both methods here. But the short story is that a debt snowball means paying off your debts from the smallest balance to the largest. An avalanche is paying off your highest interest debts first.
We used the debt snowball method.
What financial mistakes did you make while getting out of debt that other families can learn from?
We held off celebrating small wins which I think sometimes led us to feel burned out. I recommend that whenever you pay off a debt, to do something as a reward to celebrate like ordering pizza or taking the family to a fun place. Anything you can do to help celebrate those wins will help keep you motivated and avoid the feeling of being burned out.
Now that you are debt-free, do you have a new financial goal you are working towards?
This year’s big goal is fixing up the exterior of our home – new roof, new windows, replace/repairing the rotten siding and porches. Since our home was built in 1979 and was a foreclosure when we purchased it, it still needs a lot of TLC to get back in shape so we’re holding off paying off the mortgage this year to love on our home a little.
Finally, where can readers find you and follow your story?
Smart Money Mamas’ Thoughts
Jessi, thank you so much for sharing your awesome story! Only having $17,000 left on your mortgage is a fantastic accomplishment.
As I did with Krystal’s interview, I want to share some thoughts:
- Side hustles can make an incredible impact on how quickly you reach your financial goals. Even a small side hustle, like walking dogs, that may only bring in $200 a month can seriously shorten the time until you’re debt free. And reduce the amount of interest you pay to the banks!
- In the debt snowball vs. debt avalanche discussion, it really comes down to preference and what keeps you most motivated. However, if you have high-interest credit card debt, that needs to go FIRST. Oh goodness, those costs add up way too quickly.
- Celebrate, celebrate, celebrate! For both Jessi and Krystal, their debt-free journeys were years long. It is incredibly important to give yourself permission to do a victory lap every once in a while. Otherwise, you will probably get tired of how that tight belt it cutting into your fun.
Thank you again, Jessi!
What did you think of Jessi’s story? Any thoughts you would add?