We are back with another installment of the Aha! Moment debt series! This month we meet Mr. Budget on a Stick (Mr. BoaS), he has paid off almost $40,000 in debt and today only has a mortgage. He and his wife moved to a cash budget to kill their spending and take control of their debt.
Check out Mr. BoaS’s story!
If you would like to be considered for an interview, drop me a note!
Previously on the Aha! Moment Debt Series:
- Krystal, an ex-teacher and homeschooling mom who paid of $80,000 in debt
- Jessi, a work-at-home mom who tackled over $75,000 in debt
- Jamie, a blogger and stay-at-home mom of 5 who paid off $24,000 in credit card debt
- Dr. Jenn, a double-board certified surgeon who paid off $1.9 million in debt
- Rebecca, a mom who worked through medical setbacks to pay off $90,000 in debt
Let’s get started…
Aha Moment Interview: How Real People Get Out of Debt
Tell us about yourself!
My name is Mr. BoaS and I am a 30-year-old software developer living in the awesome state of Minnesota. (Yes, I am aware it gets cold here). I have been married to my amazing wife since the fall of 2012 and have two ridiculous/comical children.
How much debt do you have today and where did you start?
Today we only have our mortgage at $161,638.32 and at our peak, in February of 2016, it was $200,165.09. It was probably much worse but I didn’t start tracking everything formally until Jan of 2016. Besides the mortgage, the other loans in there was a car loan and a HELOC we took out in order to buy our solar panels.
What was your “aha” moment that made you realize you had to get out of debt?
My aha moment is thanks to our first born. His birth was the catalyst that made us realize we were in a terrible mess and needed to get out of debt. I was so scared that something bad would happen and take down our house of cards. Every time I put him down for a nap I would just obsess about our debts and figure out how much longer we had on the loans.
What lifestyle changes did you make while paying down debt?
In order to blow away our debt, we moved over to a cash budget and started trimming all of the other budgets. I spent a lot of time reviewing everything that was coming in or going out of our accounts. The biggest thing was to kill personal spending and limit eating out to just $100 a month. We didn’t go about it with a diet mentality. We tried to do it in a way that it permanently changed our habits so we didn’t get back into debt.
Did you have a side hustle (side job) to help you pay down debt faster?
Nope. Never could come up with something I would be able to do and be around the family.
My wife now has a side hustle teaching kids in China English. She does that at night on the weekends so as not to take away from time with the kids. I always wanted to get into voice acting but never took the leap.
Related Post: How to Start Teaching With VIPKID – A Complete Guide
Did you and your spouse have any differences of opinion on how to get out of debt? How did you get through it?
When I went to my wife with the idea of the Dave Ramsey Baby Steps I was surprised how quickly she got on board. I think she was starting to get the same concerns I had about our finances. It has helped to have all of my spreadsheets to show her the progress and she edits my posts for the website which helps drag her into my madness too.
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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 did debt snowball. We started with the HELOC and quickly moved to the car loan. It was nice that the smaller loan was also the higher interest.
What financial mistakes did you make while getting out of debt that other families can learn from?
Start tracking right away. I didn’t start tracking our progress until we were in the thick of our debt paydown. Had I started tracking sooner we may have been done sooner. I am the type of person where if something is out of sight it is out of mind. Until I had our amortization spreadsheets I had to log into our bank or Mint to get the latest numbers.
Worst of all you don’t see your progress! All of this sacrifice and you don’t have something tangible to show for it. There are lots of different ways including printables you color in as you go to get the kids involved
Finally, where can readers find you and follow your story?
Smart Money Mamas’ Thoughts
Thanks to Mr. BoaS for sharing his family’s story!
As I always do in these interviews, I want to share some thoughts:
- Tracking is important. Whether it is in a bullet journal, on a worksheet, or through Personal Capital, keeping track of your debt balance or net worth lets you see your progress in black and white. It makes it real! It’s always easier to stay motivated when you feel like your actions are having an impact.
- Permanently change your habits. Becoming debt-free means changing your spending habits for the long-term. Maybe you won’t have to keep the belt quite as tight once you’re out of debt, but you won’t be able to go back to your old ways. I love that Mr. and Mrs. BoaS saw that from the beginning!
- Family first. I think it is awesome that Mr. and Mrs. BoaS prioritized family time over side hustles. Some people get so focused on their debt goal they forget that life is still about more than money. Find the debt payoff method that allows for balance in your life.
Thank you again, Mr. BoaS!
What did you think of Mr. BoaS’s story? Any thoughts you would add?