Ten years ago Marcello and I were renting an over-priced, dumpy apartment with rusty appliances and brown stuff leaking from the shower. We were $18,000 in credit card debt and unsure how we would ever be able to buy our first house.
Today we live in our dream home with a guest house for Marcello’s parents. We have no credit card debt or student loans and have paid off our minivan.
In this four-part money series:
- How we got out of $18,000 of credit card debt
- How we afforded our dream home
- Comprehensive list to living frugally (and happily)
- VIDEO: A tour of my super frugal decor
Here’s our financial story and how we got on track. Let’s time travel back a decade:
Some important things to keep in mind as you read this post.
1. I’m not writing this to brag, but because I want to help and encourage you.
2. Our house or finances are not my identity. We plan on this being our forever home, but I am open and willing to follow God’s plan. His plan is better. I refuse to attach myself to things and am ok in my heart to abandon all of these things if that’s His call for us.
3. I realize millions of people have nicer, bigger, fancier houses than our homestead. I’m not the biggest kid on the block. But I also realize that many more millions of people do not. And I would never compare our old apartment to the poverty many suffer in.
4. It is loud and clear to me that the Lord has blessed us so that we can bless others.
5. I am not a financial advisor. This is only our personal journey, not professional advice.
Our lean days
My thirtieth birthday was a rough one. Not because I was older, but because I wasn’t where I thought I would be in life. By thirty, you’re an adult. There’s no way around it. A quote from “Marley and Me” comes to mind: “We’re 30. It’s not cute to be poor anymore!”
I was extremely grateful to be married to Marcello — I still can’t believe we found one another — but we longed for a child. It was hard not to obsess about my infertility and narrow in on that advanced maternal age of 35. If I couldn’t get pregnant in my youth, what chance did I have later? We did go to an endocrinologist, but didn’t have money for IVF or similar treatments.
I wasn’t happy at my job any more. There was no way to move up or increase my salary. In fact, I was told that there was a chance my position would be eliminated in the coming year. Then what would we do?
I felt overwhelmed with our debt and interest rates. We hadn’t gone on any mad shopping sprees or wasted it on frivolous things. Most of it was tied to Marcello’s move to America. There were immigration fees, intensive English school tuition, plane tickets and the like.
We were both living on my small salary, which wasn’t leaving much extra to pay off our debt. We had $50 to spend a week on groceries and I think $40 a month for gas. How would we ever afford a downpayment on a house?! We live in one of the wealthiest cities in the United States. At that time the price for a two bedroom condo was over $200,000.
Our apartment then had rusting metal closet doors that echoed like a jail cell door upon opening. The appliances were from the 70s and the countertops with pink laminate with beige laminate cabinets. The bathroom sink was rusty and stained. The view was a large parking lot. (And yet, this was not the worst apartment I have ever lived in. A story for another day.)
The flooring was so thin our fan would shake as our overhead neighbors stomped around. They walked around so much I wondered if somehow their square footage was larger than ours. It was only three steps to the kitchen! And had they taken up bowling?
I took these pictures when we moved so I would forever be grateful for our new home!
I had a $200 car payment. Marcello drove a friend’s scooter for awhile. Then my grandma’s 1989 Mazda 323 with no air conditioning. It felt a little like a Flintstone’s car. I wondered if the floorboard would rust through and we’d fall onto the road.
And when the junkyard came to pick that up, he drove a 1997 Sunbird for which he paid $700.
My best advice
I have three points to share if you are living in a similar situation right now.
1. Be grateful for the roof over your head.
Our apartment was not what we considered nice, but after we returned from a mission trip to Mexico we had a new appreciation for it! We stayed in tents with multiple people for a week, took showers from a bag of water, used hot, putrid outhouses and spend our days with a family living in a shack.
In this photo Marcello is holding Emmanuel, a troubled little boy who only seemed to want Marcello. I cry when I see it. I still pray for him.
When we came home to our dated apartment, it suddenly seemed like a mansion. We agreed to be grateful for a toilet from here on out. And I am! I still am. I think about it all the time. Every one needs trips like this — to help others and to get a reality check.
This might not be the living situation of your dreams, but if you have a roof over your head, a bed to sleep in, running water and food to eat, you’ve got it made. You don’t have to stay here, but you need to be grateful for here. God has provided for you.
2. You can do anything with four walls.
So you might not have architectural details, high ceilings or a picture window, BUT you can do a lot with four walls. My mom always taught me to see it as a blank space and turn it into my vision.
I grabbed furniture being thrown out and painted it. I asked if I could paint the walls. Add curtains. Take out furniture and things that don’t make you happy or fit with your vision. Add plants! They make a huge difference in a space.
Don’t have a vision? Find a picture on Pinterest that is your dream — obviously not for architectural reasons, but for furniture and color palette choices. Now make selections based on that photo. Would your current furniture and accessories fit in that photo? If not, can you paint them or cover the sofa with a large throw or slip cover? Frame a poster if you can’t afford art. Try painting it yourself!
This was our apartment not too long before we moved. All the gross rust and sink stains were still there, but I brightened up and did what I could for the little space.
- I slipcovered the arm chair myself and made the pillow.
- The side table is a hand-me-down.
- I made the art.
- The basket/coffee table was $10 at a flea market.
- Two $30 lamps from Ikea added needed light.
- A rug for under $100 covered the cheap, stained carpet.
- A $500 IKEA couch (that we still have!) and $20 pillow covers (I used old inserts)
So for less than $700 I revamped the entire feel of the apartment. That’s one benefit of having a small space, little updates make a big impact!
It doesn’t have to cost a lot of money, but sprucing up your tiny or dated apartment will help the details you don’t like fade into the background. Like I said, you don’t have to stay where you are, but you need to be grateful for where you are. Maybe a little extra love to your space will help with that.
3. These are the days.
Also, these will be the days you look back on with a smile. I know you probably don’t believe me, but it bonds you with your spouse if your married. We’ll never forget the day we splurged on a $5 pizza, a six-pack of beer and a shirt for each of us on the Target clearance rack. We were SO happy.
It bonds you with roommates or neighbors because you’re in close proximity. We made some lifelong friends in this apartment building. We are the godparents of one couple’s son. And went to Ecuador for another couple’s wedding who met in these apartments! We keep in contact with a lot of people from that time in our lives.
Also, Marcello points out that he had very little stress then. It’s true we didn’t have kids, but we were streamlined and go with the flow. Super in debt, but streamlined :)
Nowadays I’d say we are more like a large, clunky machine with many parts. We have more family members living with us — five, in fact! We are responsible for these people. We are responsible for home repair costs. We are responsible for higher bills and the maintenance that comes with more house and land. That’s a lot of pressure.
Time for a change
Thirty was like an electric cattle prod to us. We were ready to do battle with our finances and took it very seriously.
No job is beneath you. Do it to the best of your ability.
When Marcello finally got his green card and could work, he got busy! He had three jobs — washing windows, waiting tables at a breakfast cafe on the weekend and serving at an Italian restaurant at night.
He had a law degree in Italy, but his character was humble, honest and ready to work! He thought no job was beneath him and aimed to be the best window washer he could be. His bosses saw his work ethic and attitude and he was given more and more responsibility. It’s how he still continues to grow in the business world.
Save, but don’t be stingy.
We were both baby Christians in these days. We were learning about tithing and decided we would give ten percent of our income. It seems counterintuitive I know, but please hear me, God will make up for it.
Even when you are saving and scratching the bottom of the barrel to pay bills, do not be stingy. There’s always someone with less than you. And if you start tithing when you have little, it will be easier to tithe when you have much.
This post is not about hoarding and loving money. Nor do I want to suggest in any way that money will bring you happiness. Instead, I want to talk about being a good steward of your money and using it a God-honoring, wise way.
This photo is from our celebratory dinner of paying off our $18,000 credit card debt! As you can see, we were so flippin’ excited! All our hard work had was worth it and the goal of owning our own home didn’t seem so far out of our reach anymore. Notice we didn’t even go out to dinner, because we were still on our frugal high, haha!
Once we finished the credit card debt, we went on to saving all that we could for a downpayment. And that is SO much more fun!
This was all achieved through budgeting and goals. Not just talking about them, but sitting down with a paper and pencil, discussing each and every bill and holding each other accountable.
I’m not sure exactly what advice we got from where, but we were heavily influenced by Crown Financial and Dave Ramsey. I am not a financial expert. And we didn’t do everything right. But this is how it went down:
First we sat down and discussed our budget. It needs to be doable, but not have too much breathing room. You need to know where every single dollar will be going.
Our budget was sort of a backwards budget. Instead of figuring out how much we could pay on our cards, we figured out the very least we could live on. Everything else went toward the cards. This was the best way to do it with the varying amounts Marcello was making.
Dave Ramsey recommends saving $1,000 for an emergency before putting all you can toward debt. It makes perfect sense. But then we didn’t have a family and we wanted OUT of that apartment so we probably had maybe a couple hundred dollars.
This is a rough estimate of what our monthly bills were like 10 years ago.
- Rent: $900
- Car payment: $200
- Groceries: $200
- Student loan: $110
- Utilities: $85
- Gas: $40
- Tithing: $200
Our regular expenditures, with nothing extra, took up my whole paycheck. So we used all of Marcello’s income to pay our debt. And boy did he get busy!
To get out of credit card debt, you have to stop using them. The best way to do that is to only use cash.
For this period of time we started using cash instead of credit cards or even our debit card. Each category had an envelope with cash for the month — gas, food, car repair, personal care. We didn’t even have an envelope for miscellaneous or fun. Our fun would have to be free!
If there was extra (which their never was) it would stay for the next month. This is especially helpful for car repair. In theory.
Once it was gone, it was gone. We got far on this method!
Once you pay off the first card off, it’s addicting. It feels great and freeing! Most institutions recommend paying off your smallest debt first, but I went by interest rate.
This is the order we paid off our debt:
- Credit card with the highest interest rate.
- Credit card with the 2nd highest interest rate.
- Credit card with the 3rd highest interest rate. (Yeah.)
- Student loan.
I found a credit card that offered zero percent interest for a year with a transfer of part of our credit card debt. I don’t know if that’s a thing anymore, but it motivated us to pay it off in a year.
So I put all our extra money toward one credit card and paid the minimum on the others. We knocked them out one by one. It took us about a year.
I still had the student loan at a low interest rate. We decided to continue paying the student loan minimum and start saving for a house.
We didn’t really go out to eat. We packed our lunches. We rarely bought new clothes — if we did, they were on clearance. We had old phones. Some things came up, like car repair for the Flintstone car, and I think we visited my family in Indiana, but we were pretty restrictive during this time.
For fun we went to the beach, went to friends’ houses, hung out by the community pool. If we went out to meet friends, we usually decided on one beer each. Two for a special occasion! We invited people over for dinner.
With Marcello working three jobs, sometimes we were like ships passing in the night. We kept a notepad on the kitchen counter and wrote notes to each other every day. I still have it. There are all the sweet things newlyweds say to each other, plus what time we’d be home.
You don’t have to eat peanut butter and Raman noodles forever, but you can for a short time! It was worth it to us.
If you can sacrifice for a year now, you will reap the benefits for many years to come!
In the next post I’m going to share how we bought our first house and sold it for $60,000 more than we paid. We sold our second house for $50,000 more than we paid. And finally we are in our forever home before we hit 40. Thursday I’ll share how God made it all happen in under a decade.
Next: How we afforded our dream home
In this four-part money series:
- How we got out of $18,000 of credit card debt
- How we afforded our dream home
- 100+ ways to save money
- VIDEO: A tour of my super frugal decor
10 thoughts on “How we paid $18,000 of credit card debt in a year”
You truly are a good soul 🙂
I’m so glad that you have been blessed & recognise your blessings. I wish you continued happiness & success xx
Thank you for your kind words, Frankie! I’m not so great, but the Lord is! The only good in me is through him. Thanks again for your sweet wishes :)
I realize millions of people have nicer, bigger, fancier houses than our homestead. I’m not the biggest kid on the block. But I also realize that many more millions of people do not. And I would never compare our old apartment to the poverty many suffer in.
Dang. This is the best disclaimer I’ve ever seen, and it’s perfectly descriptive of what I always want to say when I show my home on the internet. Kudos to you guys and your financial journey, and kudos to being sensitive to both God and your followers.
Jaclyn, this comment makes my day. That’s exactly what I wanted to do, be sensitive to God and readers, and still get my point across. Thank you so very much for your encouragement :)
I just came across your awesome blog while browsing online on ways to better organize my house I am glad I am now reading about how to be debt free I will work on applying some of your methods to control and pay off my debts and live within my means
I hadn’t read this blog yet, and I wish I would have months ago. We are in the middle. 50k paid off but as you might suspect, that journey is HARD and feels like we want to give up. Im 7k away from staying at home, but on paper it seems sooooo long from now. I loved when you shared about living on the least you could! I have a couple questions for you!
1. Did you have months you went over? How did you handle that?
2. what about christmas and birthdays? How do you celebrate those on budget
Any other advice to inspire me to keep going?
Wow, Lisa! 50k paid off! That’s incredible. You’re almost there! So during the time we were living off the absolute least we didn’t have kids or they were little. So birthdays weren’t expensive — I’d have a family party and thrifted toys. We did go over some months and we’d have to take it out of our $1,000 savings. This time during quarantine has reminded me of those days. Marcello’s job is uncertain and our house is in real need of new windows, so right now we’ve gone back to our lean ways. We’ve had THREE birthdays at our house during lockdown! I told the kids I would only be spending $100 per kid (I did end up going over that by a little) and they were fine with that. And we didn’t spend anything for my birthday, which is fine by me. Just dinner outside is perfect. You can make things feel special with a table setting, dollar tree balloons, twinkle lights, family traditions. You can do this! Stick to it for a little while longer and you’ll be so happy you did!
Thank you for sharing your story. Your story is so inspiring. Sorry for the loss of your dear friend. The fact that you took in your friend shows God’s love and grace in your hearts. Beautiful inspriring story.
That time together bonded us forever! Now she is remarried and has four boys! Thanks for your kind comment :)
Hi Kate, so glad to find your blog.
Questions about tithing …
1- on what percentage of income do you base it upon? Gross or net?
2- if I give directly to “poor” souls who have less in life, is that tithing, too? I’m a Catholic and I believe that the Catholic Church is already “rich” enough.
3- I read that on “tithing” (strictly a “tithe”, or 10%), you can share what you can cheerfully share (I’m tight in budget).