At the end of 2013, we reached an exciting milestone in our debt repayment adventure. We are now less than Six Figures Under. We have less than $100k of debt! We have paid off $40,000 of debt so far and $36,000 of it was in 2013.
Those who are regulars around here have a good idea of what we’ve done to get to this point. Most posts on this blog have something to do with our frugal lifestyle that is helping us pay off debt in a hurry.
While earning more is half of the equation to paying off debt, I want to highlight some of the areas where we are able to cut our expenses and pay off student loans even on a limited income.
We keep our food budget low.
I feel very empowered by saving money in our food budget. There are lots of ways that we cut kitchen costs.
- We almost always cook from scratch.
- We don’t eat meat often and when we do, we stretch it.
- We grow lots of our own produce.
- We preserve our own food by freezing, canning, and dehydrating.
- We stock up on food by buying in bulk, on sale and in season.
- We always pack lunches for work, school, when we’ll be out and about, and when we’re on car trips.
- We grocery shop once a month.
- We keep and rotate our food storage.
- We eat out very rarely, usually when we have a gift card or there is a special promotion.
- We occasionally have a “no-spend” month where we cook just from the pantry.
We have low housing costs.
Rent or mortgage is the highest monthly expense in most people’s budget. We are blessed with an unconventional, yet wonderful living situation. Our family of five is living in my in-laws’ basement which happens to be in the boonies.
While our space is nothing spectacular or beautiful, it has everything we need and the price is right. We don’t pay any rent or utilities and the set-up has quite a few perks. While this sort of living situation is not ideal and would not be feasible for many people, it is perfect for us right now. It allows us to put much more toward our loans than we otherwise would be able to.
We spend very little on clothes and entertainment.
Although we have three kids who are growing like weeds, we spend very little to clothe them. We employ creative ways to get kids clothes free or cheap. We get mostly second-hand clothes, which is perfect for quickly growing little ones who are rough on clothes. We also started cloth diapering with our third. We spent $100 for everything we needed for cloth diapers.
Almost all of our entertainment is free. We don’t even have cable (or a TV, for that matter) and our phones are just phones. As a family, we enjoy lots of outdoor activities. We also take advantage of community, school, and church activities that are free. Any night when my husband and I are both home and the kids are in bed can become a date night. We love working on projects, reading books, and playing games together.
We set a focused goal!
Of course setting a goal is only the first step. Lots of hard work and sacrifice are required to make that goal amount to anything. For us, setting a goal for paying off student loans meant we had to give up saving for a house. We would not have made much progress on either goal if we had tried to do both at the same time. I think that focusing all our enthusiasm and money on one big goal is the main reason we had so much success in our first year of debt repayment. You can see the links to our monthly progress reports here.
What are your key areas for cutting costs in your budget to pay of debt or save for the future?
Be sure to come back on Wednesday for another Debt Discussion!