My Debt Free Story: How The Bailey’s Paid Off $48,000 Debt in 8 Months
My debt free story is a OneSavvyDollar series where we interview people who have successfully paid off any major debt i.e. student loans, car loans, credit cards.
Please note: If you’re currently unemployed and facing so much uncertainty with your finances, it’s best to save as much as you can right now. If you’re still employed and carrying on with your financial plans and debt-free journey then read on…..
The aim is to inspire, encourage, and motivate you to take hold of your personal finance because “financial fitness is not a pipe dream or a state of mind. It is a reality if you’re willing to pursue it and embrace it.” – Will Robinson
Can you tell us a bit about you?
Hey! We’re Mel and Kyle. We are 20-something, married college sweethearts who recently quit our jobs to travel the world. Together we aim not only to inspire black couples to travel but also to equip them with the necessary tools to do so.
We met at North Carolina A&T State University where we both earned degrees in Industrial and Systems Engineering.
Shortly after graduation, we discovered that neither of us actually enjoyed our work. Thus, we devised a financial plan that allows us to live the life we want.
What and when was your “sick and tired” of debt moment?
Before getting married, we talked a lot about our finances and goals.
One day, we were working on our monthly budgets together and realized that we paid over $1,000 a month just in debt! It felt like a big waste of money that could better be spent.
This was also during the time that we were saving and planning for our wedding.
How did you acquire the debt and do you regret doing so?
Most of the debt was student loans. Mel had $16,000 and Kyle had $25,000 in student loans; we had about $2,500 each in-car payments. The remaining $2,000 was credit cards and a small personal loan.
We don’t regret doing so because we believe everything happens for a reason; if we chose different paths, our lives may not be what they are now.
We are so grateful for the life we built now that we wouldn’t change anything from our past.
Getting so far into debt wasn’t the smartest thing we’ve done, but we learned a lot and the journey has helped our marriage grow.
How much debt did you pay off in total? How much money in interest and time did you save in total?
When we combined our finances in March 2017, we immediately started aggressively paying off our $48,000 balance.
We were debt-free by November 2017 – within 8 months. Because we paid it off very quickly, I don’t know how much interest we would’ve saved.
How much income were you earning when you accomplished this?
Our combined income was $180,000 pre-tax during 2017.
Can you describe the specific choices you had to make to become debt free?
The simplest and hardest decision we made was to live well below our income level.
We were both driving older cars from college. We lived modestly in Atlanta, GA. This allowed us to put most of our income towards the debt.
While we were tempted to live more luxuriously with newer cars and nicer apartments, we resisted and lived modestly.
The very first thing we did on this journey was to read The Total Money Makeover by Dave Ramsey.
We read it together so that we were on the same page (literally and figuratively). We followed his debt snowball philosophy to actually pay the debt.
To summarize, the debt snowball is paying down your debts in order from smallest to largest.
Was there any time during your journey where your friends and or family challenged your plans to become debt free?
Absolutely! We’ve been called cheap by friends and family more times than we can remember. We had to say no to a lot of expensive social events.
People nearest to us saw and appreciated the sacrifice and hustle but there were many others who didn’t get it at all.
We always believed that God gave us our vision and our dreams specific to us. We’re okay if others don’t see the vision God gave us.
Were any resources such as blogs, books, podcasts particularly helpful to you in staying on track? Or where did you find your inspiration to stay on track through your journey?
Once we made the decision, we ran full straight ahead. We started by reading Dave Ramsey’s book and listening to his podcasts.
Each show features people’s debt free stories. It’s inspiring to hear others who had way more debt or make less money to accomplish such a big feat. We basically followed Dave Ramsey’s program.
One blog that stood out to us is Mr. Money Mustache. One podcast we listen to is Radical Personal Finance.
What steps are you taking to ensure that you stay debt-free now?
Right after we got out of debt, we vowed to close all of our credit card accounts and never use credit cards.
Since then, we’ve changed our view on credit cards specifically with travel rewards because we are traveling 365. We make a monthly budget and stick to it. The biggest thing that we do is to live off less than we make.
We also saved up a fully-funded emergency fund that would last 4-6 months. If we have an unexpected cost (such as a huge tax bill) and we were able to use our emergency fund.
If you could go back in time and advise your 18-year-old self, what advice would you give her?
We firmly believe that everything happens for a divine reason.“And we know that all things work together for good to those who love God, to those who are called according to His purpose.” Romans 8:28
We would probably tell our younger selves to enjoy the ride. Although every day isn’t easy, it always works out and there’s no reason to worry or stress.
What advice would you give anyone who has debt and seeking encouragement?
We were really motivated when we saw how much money we were wasting on debt each month. We used to think about all of the things we could do and buy if we weren’t paying debt.
Because traveling is a huge part of our life, we could travel more without debt.
Each $1,000 we paid off, we equated to an international flight that we could be taking. In 2019, we were able to quit our jobs and travel the world (until COVID cut our trip).
If we didn’t get out of debt first, it would be a lot more difficult.
How can our readers keep in touch with you?
Congratulations, Mel, and Kyle! Here’s wishing you much success on your financial journey.