How to Pay Off $60,000 in Debt, Starting with $20,000 a Year and Three Kids

R. A. S.

Nine years ago my wife and I were living in a $1500 (dollar), 25-year-old house trailer in western Kentucky with 3 children — grossing only about $20,000 a year. We had a combined debt of over $60,000 (senseless student loans) and only one bachelor’s degree to show for it.

Today, we are DEBT-FREE, and I have a good, somewhat recession-proof job as the Director of Operations for an investment class chain of storage facilities. No degree and no prior experience. We have yet to purchase our “homestead” but plan to make those dreams come true in the next few years (cash).

Shortly after she finished her degree, for religious convictions we decided she would remain home with the children, home-school them, and I would work whatever to pay the bills. It was grueling. We were spinning our wheels, going backwards financially and had no hope of a future (both student loans in perpetual deferment.) But we realized more debt was not the answer. Thrift, thrift, thrift was our mantra.

We decided to move to Texas. I worked 4 jobs to save up for the move. Once there, I took a job in car sales and read everything I could find on salesmanship. I was successful in closing the deals but the finance department took all the profits, leaving me with little commission.

I applied for a Porta-Potty route service man job for a more stable income. By a stroke of Divine intervention, the placement service referred me to a storage facility owner who needed a store manager. In short, I was hired and worked tirelessly to improve the property. I read every single thing on the industry I could get my hands on. I asked hundreds of question. I became the local “expert on storage”, knowing every competing facility and their amenities. I was soon promoted and became my supervisor’s boss, reporting directly to the owner.

He (the owner) now sought my advice on new markets, had me research surrounding areas for expansion, and allowed me to go to conferences to increase my knowledge. When I started there was just one store, now we had three and I was over all. He bought me a company vehicle (mini-van) and allowed me to drive it after hours as well.

Our only personal vehicle was a 1994 Olds with 179,000 miles on it (but no payment). I did whatever he asked me to do. If I didn’t know how to do it, I bought a book and taught myself, spending extra hours shortening the learning curve (computer networking, video surveillance installations, electronic sign maintenance, even installing communication cable between tanning beds in his wife’s tanning salon).

With the new, better income and past history of living in substandard housing we toyed with the idea of buying a house (easy money was in vogue in our area, banks were begging people to come take out loans with no money down, no credit need). Instead, we took a little money we managed to save together with a bonus and bought an older mobile home in a nice park ($8000). The owner had died and the children just wanted rid of it. With minimal living expenses we paid extra on debt, $300-400 a month, but it seemed for hopeless because the debt was so large (to us).

After 18 months there, my company expanded and built another store 45 miles away with an attached manager’s apartment. I hired a manager who didn’t need the free apartment and persuaded the owner to let my family live there. We moved in and it was rent-free, utilities-free, major appliances furnished. We crammed our family of five in those 960 square feet but were thankful for it. This allowed us to pay almost $1000 a month off in debt. I still had to commute about an hour each way to my office, but in the company vehicle so at no additional cost to me.

We lived in that apartment for two years and found out we were expecting our 4th child. The drive was becoming monotonous and another manager’s apartment at another store back near the home office became available. When I approached him about moving back, he declined, saying 4 kids in a 2BR apartment was a tight squeeze. The next day, he called me in and said he owned a 2400 sq.ft. house (3BR, 2BA) in a nice neighborhood with a fenced yard and said we could live in it free (just pay utilities) because the managers of the gym that he owned who were living in it were leaving. We gratefully accepted and is where we are to this day.

For the past 18 months we’ve lived there, had our 4th child, paid off the debt and just now are starting our home and land fund. We have no money in the stock market, just a simple checking account big plans for the future, being and staying debt free!

Here are a few key principles we followed to keep our expenses minimal:

Put God first (tithed)

Never bought anything new, sought quality used

Clothes were simple, consignment bought when possible (Goodwill has great deals!)

Hardly ate out, picnic’d with the kids a lot at park

Museums, parks and such as free entertainment

Did own maintenance on most items if possible

No impulse purchases, we both had to agree on it

Researched simple, healthy meals that cost little to make ($125/week grocery for family of 6)

Made home more energy efficient to lower utilities

Were willing to inconvenience ourselves (sacrifice) temporarily to achieve the goal.

Had a written plan we followed every week.

Involved children in the process (bake sales for debt pay off!)

Started simple, temporary small businesses to increase income to apply to debt (filter changing service, install surv. cameras, vend. machines, etc.

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