My next debt pay off story is about how the Teixeiras’ were able to pay off debt fast on a low income and start their own business. They were able to pay off $24,500 in 7.5 months on a low income!
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Their story reminds me a lot of my own. I was able to pay off $45,000 in 17 months, and now I am on a very similar mission. The difference is that they are way more entertaining than me!
Here is their story:
How to Pay Off Debt Fast: The Teixeiras’ Story:
Jonathan and Amanda Teixeiras were married in October 2011. They were given a copy of The Total Money Makeover by Dave Ramsey, and it set their financial lives on FIRE!
They were Catholic missionaries and had a low income, around $35,000. It was not easy by any means.
They read the book together and were very inspired by the success stories in the book. After reading the book, they worked as a team and set a plan. Their first budget meeting was on December 31st, 2011. At first, they struggled a little, figuring out their categories and where their money was going to go, but they nailed it quickly and were paying off debt quickly!
They began their debt-free journey on January 1, 2012.
When their journey became, they had $24,500 in debt. They had about $3,500 in credit card debt and $21,000 in student loan debt.
Steps The Teixeiras’ Took To Pay Off Debt On A Low Income
Step 1: Baby Emergency Fund
They focused first on building baby step 1, which is a $1000 emergency fund. They were able to save that in just one month!
See also:
Why You Should Save A $1000 Baby Emergency Fund
Then they focused all their energy and attention on paying off their debt FAST, even with a low income! Their income was below average, yet they were still able to pay off debt quickly.
They wanted debt out of their lives so badly that they created a plan that had them paying it off in just 7.5 months!
We would rather suffer a short but intense time of delaying gratification than several years of lukewarm spending/paying debt.
Step 2: Selling Items They Did Not Need
First, they sold items they didn’t need. They took their lunches to work and ate PB&J sandwiches. Their friends even thought they were taking things too far.
They sold a car, became a one-car family, got raises at work, and sold ALL their furniture, including their lamps! This kind of cracks me up because I did the same thing. I sold all my lamps and pictures off my walls. But hey, when you want something bad enough, you will do whatever it takes to get it. (and no, they didn’t move or live with anyone else)
They even started finding things to fix up and sell. Even if it was in the dumpster! They sold things like bikes and their Nintendo, and found things at thrift stores and sold them on eBay and Craiglist.
The faster they paid it off, the more excited they became and the more motivated they were to pay it off even faster!
When you are that motivated, you start to find ways to make even more money. They lived cheaply, ate cheap, and sacrificed for 7 months.
Their original goal was to have it all paid off in just a year. But they managed to do it in just 7 months! They were officially debt-free on August 15th, 2012.
They were then able to do their debt-free scream with Dave Ramsey! How cool is that???
Here is their debt-free scream:
Doesn’t that make you want to jump up and down in excitement for them?
I love listening to the debt-free screams on Dave’s show. They just make me want to scream in excitement for them!
Step 3: Fully Funded Emergency Fund
Their next step was to quickly save up their full emergency fund and then start saving for a down payment on a house! They bought their house in June 2014, less than 2 years after becoming debt-free!
They even paid 20% down on a 15 yr fixed-rate mortgage that is not more than 25% of their income according to Dave Ramsey’s principles.
So they were able to save 3-6 months’ worth of expenses AND a 20% down payment on a house in LESS than 2 years!!!
I can not believe how quickly this couple was able to achieve their financial goals on a low income. This was not a couple making an extravagant income. Yet they were still able to save money quickly to achieve their goals.
Adoption:
Then two weeks after buying their house, they found out they were going to be able to adopt a baby due in November. They were able to scrimp, save, and fundraise their way to paying $20,000 in adoption costs without adding any debt!
This couple is amazing!
How were they able to do this so quickly?
They worked as a team for a common goal. If only one of them was working on the plan, it wouldn’t have worked.
Here are some tips for getting your spouse on board.
They show that you can achieve anything with love, determination, a plan, and working together!
FAQ:
I want to pay off my debt; how do I start?
When you want to pay off debt fast, you need to start by figuring out how much debt you have. Here is a list of the best debt snowball calculators to help you determine your total amount of debt and how quickly you can pay it off.
The Best Debt Snowball Calculators
How do I pay off debt fast on a low income?
In order to pay off debt fast, you have to deal with your budget. You have to make one, and then you have to stick to it. It requires you to face your debt and not bury your head in the sand. You will then have to find ways to save money and make extra money.
11 Signs You Have Too Much Debt
Do you have other debt success stories?
Yes, I have featured several on my blog. Here are some of my favorites:
How One Couple Paid off $70,000 in 12 Months!
How We Paid Off $45,000 in 17 Months
How One Couple Paid Off $130,000 in less than 2 YEARS!
Why should I pay off my debt?
You should pay off your debt for several reasons. One of which is that it reduces your risk. There is always a risk of losing your income, which could be devastating. If you don’t owe anyone anything, it drastically lowers your risk of homelessness.
Another reason is that it steals from your future. When you have too much debt, you aren’t able to save for retirement, college, emergencies, home repairs, maintenance, and things like that. It makes you continuously use debt for things that you could pay cash for.
Plus, it’s pretty cool to actually own everything you have. No one can come and take it from you. furthermore, you don’t have to see the look in your kid’s eyes when their playhouse gets repossessed.
Why You Should Start Paying Off Your Debt
What tips for paying off debt fast on a low income do you have?
My first tip is to make a budget and determine how much debt you actually have. You probably have a lot more than you realize. It adds up quickly and is shocking when you see the big number. Then find ways to save money.
Find ways to save money daily, every month, every paycheck, whatever it is, to pay off debt as fast as possible. Get 200 easy ways to save money here!
Here are some more tips:
Tips for Paying Off Debt for Millennials!
Motivation to Pay Off Debt On Low Income
In conclusion, I hope that helps and inspires you to pay off your debt! It is such a freeing experience once you get past all the sacrifices of getting there. It changes your mindset on money, debt, and your financial future.
You are then free to do what you want. I was able to stay at home with my kids only because we paid off our debt. What do you want to do in life that you can’t because of debt?
Figure out your “why” and let that be your motivation. Make visuals to remind yourself every day why you are pushing through and sacrificing. It will be worth it!
Great post! Debt can be so crippling so this is such a good resource and encourageent to become debt free. I will be sure to come back and read it and check some of the resources you have recommended.
Very informative information. I am all about new ways to save money! Thank you!
This is so inspiring! I love learning how to do this. Saving this post for future reference, thanks ??