How We Paid off $66K of Debt in 32 Months — Part 1: Our Financial Origin Story

From March 2016 to January 2019, we paid off $66,000 in debt.

So how did we do it?

Did we win the lottery? Rob a bank? Sell organs?

No, the truth is not as crazy, sexy, or movie-worthy as any of these.

We simply made a series of deliberate choices to increase the gap between what we were spending and what we were earning―tiny adjustments that added up to big shifts over time. In short, the key was effective habit change and radical intentionality.

And along the way, we never felt deprived. In fact, our lives began to feel even richer. We used to spend our time and money mindlessly. Now, we spend lavishly (but mindfully) on the things that matter most to us (health, travel, family, giving, etc.), and spend minimally (or preferably not at all) on the things that don’t matter that much to us.

While changing our habits wasn’t always easy, the process of getting out of debt was one of the best things we’ve ever accomplished both as individuals and together as a couple. The process helped us:

• Grow even closer together and establish healthy, sustainable money habits early on in our marriage. Most couples fight about money. We don’t. Ever.
• Clearly define our values, goals, and priorities. We realized—as Paula Pant puts it—that we can have anything but not everything.
• Evolve our views on money, wealth, time, energy, freedom, and fulfillment. Most importantly: starting to see money as simply a form of energy.

We now know we can accomplish anything we prioritize. We hope that our story can help you do the same, too.

In this three-part series, we offer a year-by-year breakdown of exactly where we started, what we did, and how our thinking changed over time. If you want to take control of your finances and begin working toward financial freedom, we hope our story can provide the dose of inspiration you need to get started.

But we want to emphasize that we are far from perfect, and have made—and continue to make—a metric ass ton of mistakes. And that’s okay! The goal should always be progress, not perfection.

• Part 1: Financial Origin Story
• Part 2: Winter Wedding Bells & Debt Snowballs
• Part 3: Debt Free & Pursuing Financial Freedom

Part 1: Financial Origin Story

We had very different financial views and habits before we met, but fortunately, our money scripts and values are well aligned now and our tendencies balance each other out. But that is now. What about then? Here are our financial “origin stories” and what our spending and saving habits looked like before we met.

John’s Story

As you will see below, I was not as wise with money as Rosemary…

I brought zero savings, tens of thousands in credit card debt, tens of thousands in family loans, and some bad financial habits to the marriage. Until we started our path to financial freedom in March 2016, I had long operated with the following faulty assumptions:

• Credit cards are an emergency fund and a tool for generosity.
• The only way I would ever pay off my debt is by earning a massive windfall, preferably through building a successful business.

My problems with credit card debt began in college. I bought new furniture and decor to outfit my college dorm and later bachelor pads. I paid for expensive gifts and experiences for friends and girlfriends. I almost always got the tab when eating or drinking out (which we did multiple times a week, including many trips across the border to Vancouver, BC). I covered gas or groceries for friends who couldn’t afford it (even though I couldn’t really afford it either since I was paying using borrowed money). And the biggest credit mistake? I covered the last few years of college tuition using credit cards. My parents had been paying my way through school (thank you mom and dad!), but when the tech bubble popped in 2001, they lost everything and were no longer able to help. Assuming these lean times were only temporary, however, I figured I would just cover one quarter’s worth of tuition on credit and then get loans or financial aid later if needed.

That never happened. I couldn’t qualify for financial aid since my parents still looked wealthy on paper. They were “asset rich” and “cash poor” at the time (unable to sell their multimillion-dollar home during the recession, which was foreclosed the next year). I probably could have secured student loans if I had tried harder, but I had little energy and time left after taking twice the normal credit load in an effort to finish school sooner and operating a yard work business to earn extra cash for food, rent, tuition, and yes, credit card minimum payments.

After college, I moved to Japan as part of the JET Programme. I taught English at a rural high school the first year, and then did translation work for the government the second year. The program paid really well, but I managed to spend every yen I earned. A big chunk went home to cover minimum payments on credit cards (doh!), and the rest went to frequently eating and drinking out, a poor financial decision anywhere, but especially in one of the most expensive countries in the world! If only I knew then what I know now…

I returned to the States in 2005, and thought that my international experience and Japanese ability would open lots of professional doors. I applied to dozens of companies and got exactly . . . zero bites. Not a single interview. I lived off of credit cards (again!) for a few months before I finally managed to find a few part-time jobs to cover food and credit card minimums. Fortunately, my parents were kind enough to let me live with them rent-free until I got back on my feet, but this (along with being unable to find high-paying work) was a major blow to my 25-year-old male ego. Though I slid further into debt, I at least gained a much-needed dose of humility during this period.

In early 2006, I had the opportunity to work for a start-up telecom company in Bangladesh, which ended up being the highest paying job I’ve had to date. Though I (temporarily) paid off most of my credit cards during this period, I didn’t manage to save any of it, spending every single Bangladeshi taka I earned. Double doh!

Lesson learned: Higher earnings simply lead to higher spending if you don’t change your values and habits.

I then moved to Taiwan, where I lived off and on for five years, but the same poor financial habits repeated. Despite decent pay and a low cost of living, I spent every New Taiwan Dollar I earned.

I moved back to the States again in 2010 to work for another telecom startup. But yep, you guessed it: the same pattern repeated. More money just meant more spending. When the business closed down, I resorted to credit cards again, and many that I had paid off in 2006 began to fill up again. I tried to pay them off many times over the subsequent years, but I always fell back on them as an emergency fund. (Finally establishing a $1,000 cash emergency fund in 2016 was a revelation for me!) I also borrowed heavily from my family during this time, leading to a combined debt of $66,000 when Rosemary and I got married.

Though I brought debt and poor spending habits to our marriage, I did at least bring two positives:

• An entrepreneurial spirit: Both of my parents are entrepreneurs, so the idea of creating income out of thin air has always been natural for me. I’ve invested my time and energy into a number of side hustles and entrepreneurial endeavors over the years, and learned volumes about how I can best bridge the gap between what I enjoy working on and what people are willing to pay for. One of my projects, Language Mastery, has provided consistent monthly income since 2010, often enough to cover basic expenses.
• Viewing money as a neutral tool: My family has experienced high highs and low lows with finances, so I’ve seen what both sides are like. Unlike many people I’ve met in my life, I don’t see money as something to be worshipped or avoided. It is simply a tool, a form of potential energy. A tool to save time and energy. A tool to build cool things. A tool to serve others. And tools are never inherently good or bad; it’s how they’re used that makes them so.

Rosemary’s Story

My family was pretty frugal, and I was lucky that my parents taught me about money and investing from a young age. My dad jokes:

We were doing Dave Ramsey before Dave Ramsey was doing Dave Ramsey.

My brother, at age 5, handed money back to my mom that he had earned from doing extra chores, asking her to invest it instead:

Would you please put this in that growing thing?

We were taught to never get into debt (other than a mortgage). Credit cards were almost a bad word in our house and to this day, I’ve never had one. I’ve always used cash or debit cards for all purchases.

I suppose that I happened upon “college hacking” before I even knew it was a thing, and managed to graduate without any student loans. My parents had always told me that they would pay half of what it costs for a 4-year, in-state college, including living costs. I ended up going to to university in Wellington, New Zealand, where tuition, it turns out, is much cheaper than in the U.S. despite higher overall living costs. Even as a non-resident, tuition was only NZ$19,000, which at the time was around US$14,000. I then received New Zealand permanent residency during my second year there, so tuition came down to only NZ$6,000 (US$4,500) for the next three years.

I graduated with two degrees: one in Tourism Business Management and one in Marketing, bringing my total college tuition costs to roughly US$27,500. That meant the amount my parents had allocated for half of an American college degree covered all of my tuition in New Zealand. Gotta love, Aotearoa!

To cover living costs, I worked part-time at hotel café/restaurant in downtown Wellington. To keep costs low, I lived with roommates in a shared house and bought used textbooks. 

My grandmother later gave me an unexpected check to put towards college, which I decided to invest instead since my tuition was already covered. Though it was tempting to use the money, I knew that “Future Rosemary” would be really happy if “Present Rosemary” put the magic of compound interest to work sooner than later. 

That’s the good news. The bad news is that even though I avoided debt and credit cards, and managed to squirrel away some investments at a relatively young age, I still spent pretty much everything I earned and was living paycheck to paycheck. My income was mostly wiped out with rent and food, and then whatever else I felt like buying: drinks with friends, road trips, gelato at the waterfront, etc. I remember many occasions when I got down to just a few dollars in my bank account, desperately awaiting the next pay day. 

I had a salaried job after college for a bit, but then decided to leave New Zealand and do some travel before returning to the states. I moved to Ukraine for a year, traveling around Europe that summer for a month, staying with friends and family along the way. When I came back to the US in 2013, I moved back in with her parents while I figured out what I wanted to do in the next chapter of my life. I ended up deciding to do a certification in Nutritional Therapy, a fortuitous decision that soon led me to my future husband and my next career…

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Photo by Jp Valery on Unsplash