This is the sixth post in the blog series called “How I Got Out of Debt” where I interview real people who have paid off their debt and lived to tell about it 🙂 All of this to show you that it is possible to pay off your debts sooner than you think. You can find the other interviews here.
I hope you find Steve’s story helpful along your journey!
Name: Steve Stewart
City: St. Louis, Missouri
Debt Paid Off: $15,000
Time it Took: 13 months
Bio: Steve Stewart is a blogger, speaker, and podcaster who hates your debt more than you. He inspires everyday Americans to pay attention – not interest, which is what he and his wife did to pay off their house in 8 years. Steve launched a new show called “No Debt, No Credit, No Problems.” Can you guess what it’s about?
Tell us about the moment when you realized you needed to pay off your debt.
Our story is rather boring. There was never a moment when we said, “Holy Toledo, this is a disaster. We need to get out of debt”.
Instead, we found a purpose for becoming better managers of our money. That led us to the same conclusion many of my clients come to: We make too much money to be this broke every month.
It was time to get on a plan (budget), pay off our debt, and start saving some serious money.
How much debt did you pay off?
We had about $15,000 in consumer debt, with $12,000 being a car loan.
However, we could have had a real disaster because of our mortgage. My wife and I purchased a home in 1999 on a 5/1 ARM (Adjustable Rate Mortgage). That wasn’t a mistake – it was just ignorant! Luckily, rates had gone down when we refinanced in 2003 to a 15 year fixed rate mortgage at 5.35 percent.
How long did it take to pay off?
Surprisingly, it only took 13 months to pay off the consumer debt and 8 more years to pay off the house.
I have been a mobile MC/DJ for over 30 years and had begun working with a very successful entertainer who asked me to take on some events when he was already booked.
The events often took me out of state and absorbed the entire weekend, but it paid really well.
Because I had a new goal for any extra money that came in to our household, I dedicated every profitable dollar toward debt elimination. That meant no new gear, no “bonuses” came home for eating out or movies, and the business basically ran on bare-bones the entire time.
Did you stumble along the way? i.e. make any mistakes, relapse into your old ways? If so, what happened?
Maybe it’s because we were so intense and paid off the debt so quickly that I don’t recall any major stumbles. Once we got on a budget we could see how our salaries could cover all our bills and allow us some wiggle room when needed. Combine that with the extra income from my MC/DJ gigs and we were able to cashflow anything that came along without having to change our lifestyle.
I feel that we were blessed to be in a situation where our income could sustain our lifestyle, even with the debt. I’m very thankful that we realized it at a time where we could make every dollar count before an emergency happened. It also helped keep us out of new debt when it came time for another large purchase (like replacing another car).
Did you know what you were getting yourself into when you originally took out the loans?
Yes, we knew what we were getting into when we took out the loans. It was plain-as-day on the financing papers we agreed to sign.
What I have found is that many people don’t pay attention to anything more than what the monthly payment is. That is what caused us to sign the papers. We became obligated to Chrysler Financial because we were doing what everyone else did – and we were broke like everyone else too.
While you were getting your loans paid off, what was the craziest thing you did to save money?
The craziest thing, or maybe the weirdest thing, is I began to put all my loose change into a big jar. Once in a while I would go to the bank and turn them in. This was the money I used to purchase new music for my gigs during our get-out-of-debt stage.
I continued this practice for many years – and I found it fun to take a few pounds of coins to the local CoinStar and exchange them for an Amazon gift certificate. I never missed the loose change, but I certainly enjoyed rewarding myself when I redeemed the certificate for something that wasn’t already in the budget!
When you were debt-free, did you buy anything out of the ordinary?
We rewarded ourselves for being debt free every year.
Normally, we save up and pay cash for an awesome vacation on a secluded horse ranch in the mountains of Wyoming. It’s our favorite thing ever! We also extend weekend trips because it isn’t a financial burden; we save a little every month towards these things.
The greatest gift for achieving debt freedom is the variety of options we can now afford because our paycheck isn’t pledged to anyone but our own priorities.
What do you think was the key to succeeding at paying it all off?
We succeeded because of two things:
1) We set a goal
2) We had a plan
It’s easy to say “I want to be debt free”. What’s better is to add “…and we are going to put every extra dollar towards eliminating our debt until it’s gone”.
I think our original estimate was to pay it off in 2 years. Once we knew how to budget and set off on our plan to pay it off we reached our goal in 13 months.
How does it feel to no longer owe money?
We worry about so many FEWER things now. My wife and I paid off the house on December 14, 2015 (Congrats, Steve!! 🙂). We went into the bank, paid the balance of the mortgage, and spent a wonderfully relaxing day at a local winery with a huge fireplace and a great cafe.
Can you imagine what it would be like to have no debt and essentially “free rent”? I’d like everyone to take a moment to think about what their paycheck would look like without the chains of a car payment or mortgage. That’s how we feel.
The world is our oyster 🙂
Will you ever put yourself into debt again?
I won’t lie and say we will never have debt again. I can tell you we have saved up enough money in investments that we will never NEED to borrow money again except for possibly our next home.
My wife wants a ranch home in Wyoming. That is going to involve the purchase of land and probably building a new house and barn for horses. While the horses will be paid for, we might need a construction loan for the property.
We will be saving money towards the new place, but I won’t say we won’t need a bit more to complete the job.
What is the one piece of advice you would give to those who are still feeling like they are stuck in debt with no way out?
My single piece of advice that will pay HUGE dividends today is to pay attention to your money.
Even if you do nothing more than track your spending for and compare it with your income; pay attention to how much you spend (past tense AND present tense). Look at your budget regularly (we do it every Sunday afternoon).
Think about what you have spent in the past 4 weeks on food, eating out, entertainment, cell phone bill, entertainment and cable, etc? Are there opportunities to package cable, internet and phone to save money? Is your restaurant bill in line with what you believe is reasonable? Was there extra money that mysteriously disappeared through ATM withdrawals?
Sometimes it takes the simple act of paying attention to see the problem that exists in all of our budgets. Only then can we make our day-to-day spending match our goals – and getting out of debt is a great goal!
Thanks again to Steve for sharing his story with the us! It’s really refreshing to hear that there is no magic to getting out of debt, just good old hard work.
If you would like to share your story about paying off your student loans, please contact me and we can get your story out there to help others! How awesome would that be?!