4 years ago I read Dave Ramsey’s Total Money Makeover and Ramit Sethi’s I Will Teach You To Be Rich. While these authors both tell the same message of getting out of debt they have very opposite views of how to do so. My wife and I took a couple pages out of both of those books and have been working for the last couple years on becoming debt free.

adam buchanan lisa laugh

In this article I’ll share a couple things we’ve learned along the way that hopefully provide value to you and your family. Disclaimer; currently we AREN’T debt free but I wrote this article to tell you about the journey of what we’ve seen that works, pitfalls, and successes. I wrote this to give you a more realistic view of this journey rather than some of the other vanity stories out there.

Down below I also comment on the highly controversial New York Times article about not paying off your student loans, spoiler: I get pretty fired up and there is some name calling.

1. Getting Started

This is by far the hardest part. There are blogs, books, videos, and guys like me on the Internet who aren’t even debt free yet that all have great tips and tricks for tackling debt. All great advice – but where do you start? For us it started with taking an inventory of all debt. For me I wrote everything down in an excel sheet, for my wife she used pen and paper. Do what works for you but that is where it starts. You have to audit your finances and see what’s coming in and what’s going out. You should do it this evening before you binge on Netflix.

Open communication is key. My wife and I have different opinions on how to tackle debt and we’ve really learned how to communicate with each other. Whether each of us are right or wrong, we make decisions together and see it through. We’ve had some wins and some pitfalls but we’ve stuck it out together and came out stronger. My wife is an incredible partner in crime to tackle the debt beast and has been super supportive as we’ve worked together.

After we took a financial inventory we started to see opportunities for improvement. Dave Ramsey suggests that you should never eat out again, cut all credit cards, and completely go primitive until you are debt free. We didn’t go that route and tried to lean more towards Ramit’s advice of targeting big opportunities that make a big impact. Rather than saving $2 at dinner by not drinking soda I started to look at my student loan interest rates and seeing what my options were. Before we dived into the making changes we discussed what our goal was.

2. What Is Your Goal?  

Ramit asks his readers in his book, “What does it mean to be rich to you?” As I pondered this I thought, well being debt free of course! Well, not really. If you are debt free that is a tactic part of your life strategy to reach your goal of being happy.

You have to be careful with this one because when you see people around you buying things, living life, and spending money – you have to block that out. If Sally is going on big trips and traveling all over the world, she probably doesn’t go on big shopping sprees. If Ben buys a new boat he probably is sacrificing in another area of his life by not eating out as much. Ramit really drives this concept home and it  helped us understand what our goal was and what it meant to be rich, in our mind.

For us, we like to spend time with our kids and take them places. We’re more about shorter weekend trips than a big Disneyland excursion. We aren’t super concerned with what kind of car we drive. Personally I’d like to get to a point one day where I can take all my kids skiing during the winter and even get a sweet ski-in-ski-out vacation home. I’m less concerned with fancy new clothes and lean more on experiences. Find what you like to do and do it. Don’t chase what other people do with their money, chase what you do with your money.

3. Early Wins

After the financial audit and defining a goal we found that one of my largest student loans had a completely bogus interest rate that was totally sketchy. For months we felt like the balance wasn’t going down and the loan had been re-sold twice in a year to different lenders.

I made phone calls, researched, and found that through my credit union I could re-finance the loan and drop my interest rate from 6.5% to 3.4%. Heck yeah, this got me revved up! And recently I just re-financed this loan again and got it down to 2.7%. A big pitfall is not paying attention to your loans and what they mean. A lower rate also means a lower payment which in turn can be used to pay down the loan quicker. Everyone is different, try what works for you.

We also looked at an REI credit card that we had a balance on; it had a stupid high interest rate and we were getting $40-$50 back a YEAR to shop at REI. This reward was horrible compared to how much work it was to manage. We switched to Chase Freedom and saw massive benefits on 1% back on every purchase and 5% back on quarterly participating patrons. Dave Ramsey says to not get credit cards, Ramit Sethi says they are important to build credit and can offer some good rewards if you’re smart. As we’ve bought cars and houses a strong credit score has come in handy. Every time.

As we were starting to see the light and making big impact decisions, I went on a complete ebay binge and sold a mountain of stuff I didn’t need anymore. I sold clothes, backpacks, tents, camping gear, and any electronic that we we hadn’t plugged in for a month.

In 45 days I raised $1,200 selling my stuff on ebay. Woo hoo! Then one of our cars broke down and we had to use the majority of the new cash to fix it. Honestly, I wasn’t too bummed out though – if felt like we had just lit a fire within us to win the battle over debt.

Definitely try selling some of your extra stuff, you’d be surprised how much cash you’re sitting on.

4. Sustainment

It’s always fun to start something new but then it can quickly die off. In a lot of ways getting started was very difficult. Heck, it took me a month before I called my lender for my student loan to see what the heck was going on. The sustainment stage of making changes and looking for high impact wins can also be difficult.

What helped us was tracking our loan balances in excel and checking in on them each month. It started to feel like a game; we pull certain levers and we can affect the numbers. I got to the point where I was checking it weekly and then daily, my wife would joke with me and say, “Having fun playing with your numbers over there?” A sense of humor is key to tackling debt.

My favorite app to use is Mint. You can add all your accounts and even most of your loan accounts to keep things top of mind and accessible. This was something I didn’t do before I caught the ‘get out of debt bug’. We also added all of our debt into a debt calculator which really helps us see what different options you have if you pay down certain balances with varying interest rates.

Download the excel doc that I use for this from Vertex here. It’s great because you can do different scenarios and get an idea of how long it will take to get out of debt. As I’ve tinkered with our debt I know exactly what  decisions will help us get out of debt and a timeline to go with it. I live and die by this excel doc, it’s my favorite thing to look at each week. Ask my wife.

For the last 4 years I haven’t stopped drinking soda or going out to lunch as Dave Ramsey suggests. For me the payoff just wasn’t there and I felt like there were higher financial impacts to tackle. So someone might say,

“Well Adam, in 4 years if you would’ve stopped drinking a soda a day ($2) you could’ve saved $2,920!”. Hmm yeah but then I would’ve had to stop drinking soda. And I like soda, theres nothing better than an ice cold Dr. Pepper mixed with a little Coke on a warm day (or a cold day).

And honestly, it would be far more difficult to stop drinking soda then to call all my lenders and see what my options are to pay down my debt. I can sit on hold for 20 min. all day long to get an answer on a loan that could potentially save me thousands of dollars then give up my soda. That is a no brainer. Dave Ramsey probably doesn’t like people like me.

5. Other Things That Have Worked

  • Ask questions! When you inventory all of your debt and even your monthly bills, save all of those phone numbers and account numbers in your phone and call them. I use to travel for work a lot and would be in the car for 2-3 hours at a time. I would call my credit card lenders, student loans, cell phone carriers, etc and in those phone calls I saved us thousands of dollars over the last couple of years. There’s always a promotion, a lower interest rate, or something happening that can save you money.
  • Build your credit score. As I sat on the phone with all my lenders I learned from Ramit to make sure that we’re maxing out the amount that we can qualify for a credit card to achieve a lower the credit utilization rate. Don’t call too much or your credit score will get dinged for too many inquiries, but 2-3 times a year usually works. This and obviously paying bills on time are key to success. A credit score can save you big time when it comes to buying a house or a car.
  • When you buy a car ask for a lower interest rate. I bought a car earlier this year (a Honda because they are very low maintenance) and the dealer said they could offer me 5.75%. I laughed and asked him to run the numbers again. I said my credit score was way better than that. He came back sheepishly and magically found that they could offer me 3.7%. When you have a healthy credit score don’t forget to negotiate. You worked hard for that and dealers will do anything they can to squeeze out an extra .5% on a loan where they can.
  • Since 2008 we’ve moved every two years for my career. We don’t move because it’s fun to up root the kids, start new schools, and get to know a new community; we move because it was the right thing to do for our situation at the time. It’s difficult and there is a price to pay but each time it’s helped us get me a better job to get a competitive advantage on debt. And it’s working. We’ve also lived in some great places and  have met so many incredible people that have affected our lives for the better. I can’t imagine what life would be like if we would’ve never moved.
    • When I say my wife is a very supportive partner I mean it. For two of those moves she was 7~ months pregnant and was an absolute trooper. I’ll forever be in her debt.

  • Look for the big wins. When you get a tax return or an inheritance, really be thoughtful of where you’re putting that cash. Use the debt calculator to see how it affects your debt if you pay off a certain loan. And pay off the loan. Do not buy a stupid toy.
  • Real estate: What you buy you must sell. When you buy a home get a home you enjoy living in but think ahead of when you have to sell it. How much work does it need? Is the layout neutral? What work can you put into it to increase the value? On our last house we did a mountain of work and put a lot of sweat into the place. We even saved a TON of cash by selling it through a listing service call SQFT. More on that story here. Was it risky selling our home through an iPhone app? Heck yeah, but it paid off.
  • Start an online business. My wife is super creative and one Christmas sold a lot of her trendy Bullet Cufflinks. At the time she sacrificed and juggled the kids while creating inventory. The money paid for our travel to go see family that Christmas and it was a highly rewarding experience. What skills do you have? What can you sell? You’d be surprised what you’re capable of. I wrote an ebook on social media that I sell on Amazon here. While the ebook doesn’t bring in big dollars it taught me a lot about how I should write my next book and possibly generate extra income.

Now I get a little fired up…

Ok, now it’s time to discuss the New York Times Article that got me super fired up last week. In short the author delivers advice about how he is defaulting on his loans and that’s ok because he’s out to change the education system, and everyone should join him.

Barf. No. Run away. This is horrible advice.

Two things:

  • Credit Score
    • If you default on loans this will crush your credit score. Not to mention this is totally dishonest. Your credit score shows how reliable you are. You could call it your honesty score. This kills me that the author is advising this. What a goober. <- My best attempt at name calling.
  • Plan ahead
    • When I was in college I saw the writing on the wall very fast that it would be expensive to get an education. Sure there were loans and grants but after a semester I realized I needed to plan ahead for school.
    • First; I went to a reasonably priced school with in-state tuition. It kills me the author went to a liberal arts school and complains about the cost. That’s like eating at Ruth’s Chris Steakhouse and then not paying your bill because you feel like they shouldn’t charge that much for a steak.
    • Second; I went to summer school. I laughed when my fellow students at school would take summers off to travel and go on vacation. Some worked full time and I applaud them for that but I seriously had friends who screwed around for 3 months. Slow clap for you…
    • Third; I talked to my student adviser monthly. He once told me I could get 8 credits if I wrote a 1,500 word essay on my opinion about business. That essay took me 45 min to write and I scored the 8 credits. That’s half of a semester of classes!
    • Fourth; I got to work. I graduated in 3 years and didn’t delay my completion by changing majors or fiddling around. I knew I’d have student loans to pay and I got to work to start paying them off.

I hope this article gave you some value with whatever stage you are in with paying off debt. I’ve secretly become somewhat of a nerd on the topic and enjoy discussing it. Dave Ramsey is a fantastic author and does a great job of scaring you straight to get fired up about getting out of debt. Ramit Sethi has a more approachable method of getting out of debt and overall we swayed more towards his advice. I suggest you read both books and find what is right for you.

Let me know your thoughts in the comments.

Adam Buchanan

Adam helps brands be their best by helping them unlock the powers of trust to be more impactful in their digital marketing efforts. By using social media effectively, brands can benefit their customers by being authentic and developing a stronger relationship with them. Adam is an advisor, speaker, and wearer of red glasses.

All author posts

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!

Download My Free Ebook

Join our mailing list to receive my free ebook.

You have Successfully Subscribed!