How Sara Paid Off Over $150,000 Of Debt To Reach Financial Freedom (2024)

I’m so excited to introduce you to Sara! I first “met” Sara over on Instagram and I felt like I had found a friend! Seriously, go follow her now @thesmallhelm! I absolutely love how honest she is and how she can find joy in the small things! I knew that I’d want to share her debt free story with you, so here she is today!

Tell us a little about yourself and your family.

Hi! I’m Sara, wife to the hardest working man I know, and mom to 4 awesome boys. I love being a boy mom and the only female in our home. We started our debt free journey while living in Ohio. Halfway through, my husband got a job offer and we moved our family across the country back to Utah to live closer to our families. Because we were in the middle of our debt free journey, we didn’t have any savings other than our $1000 emergency fund, and his job didn’t pay for moving expenses. So, we sold all our belongings and moved what was left in a tiny trailer hitched to our minivan. We lovingly named our trailer, the clampett. (After the tv show, The Beverly Hillbillies) Yes, strange, I know. But, we paid cash for our move, didn’t go further into debt, and managed to put a little money toward debt that month.

How much debt did your family start with and what type of debt was it?

We started with a little over $150,000. It was a car loan (18K), credit card ($7K) and the rest was student loan debt.

At what point did you realize that you wanted to become debt free? Was there an “aha” moment for you and your husband?

My husband had been in school for 5 years. When he finally got a “real” paycheck, we lived just like everyone else does. I “had” to have a house, so we bought a house, with no money down. Our family was growing, and we “had” to have a family car, so we financed a minivan.

One day, my husband called me from work. He told me he wanted to stop and grab something from Target on his way home from work that day and asked if that would be ok. I said, “Uh, we don’t have enough money to cover that until you get paid.” He said, “What?! I make too much money for us to not have any money in our account.” I agreed. It was a tough wake up call for me. We finally were living a life with a real job and a real paycheck, and yet we were still holding our breath each month like we did when he was in school. I hated it! I hated the tension I always felt around money. It was always a worry to me and there never seemed to be enough money, no matter what size the paycheck was.

What steps did you take to become debt free? What worked best for your family?

When I read The Total Money MakeoverHow Sara Paid Off Over $150,000 Of Debt To Reach Financial Freedom (1), I knew in my gut it was the answer for our family. I said to my husband, “It would mean the world to me if you read this book and we could get on the same page about our money.” He was more than happy to do so. Once we were both on the same page, we decided together what we were willing to sacrifice to get out of debt.

I give credit to 3 things for our success:

  • The budget.Neither of us is the nerd in our family, but our money issues bothered me more, so I was fine to take on the nerd role. I created and updated the budget each month. I arranged the budget meeting. But we worked together, as a team. Was it always perfect? No. Did we have a lot of kinks to work out along the way? Yes!
  • Cash envelopes.Using cash is key for me. It is finite. When the money is gone, it’s gone. I never ever felt pain when I would use the debit or credit card. It didn’t feel real. I could justify any purchase when I used plastic.
  • Grit & determination. We decided that no matter what happened, we would not quit. Our original goal was to be debt free in 3-4 years. It took 6. SIX long years. We had Murphy come visit us more times than I can count. My plan was thwarted over and over again until I got to a point where I threw up my hands. I got rid of my timeline and began to trust that it would happen eventually. And, eventually, it did! We really did cross that finish line!

If you could go back in time and do 1 thing different on your journey, what would it be?

I would try to be more flexible and realistic. Getting out of 6 figure debt with a household of 6 people and one income is challenging. There are people and factors that are simply outside your realm of control. I would have these big grandiose goals for paying off debt and then a kid would end up needing surgery, or the car would break down. We even found ourselves with a new job and had to move our family across the country during our debt free journey. Flexibility is a must.

What 3 tips can you give to a family just starting out on their debt free journey?

  1. Be honest with yourself. Be willing to look yourself in the mirror and focus on your own issues surrounding money. You cannot change another person. Do not let another person hold the reins to your life. That’s your job.
  2. Put the blinders on. Stop looking at what your friends are doing. I know it’s hard. All of our friends lived nicer than we were living. All of our friends owned really nice homes, had really nice cars, and traveled on really fun vacations. I wasted time and energy in comparison that would have been better used creating a dream and vision for my own life.
  3. It’s ok to make mistakes. No month is perfect. No budget is perfect. Don’t beat yourself up when you fall off the wagon. I did that more than I can count, and you know what? It didn’t help. It only made me want to spend more in order to numb out from the bad feeling for a tiny moment. I’ve learned to give myself a beautiful gift, the gift of grace. When I fall down, I now say to myself, “It’s ok Sara. It’s ok to be a human being on a human journey. You’ll get it eventually.” And you know what, eventually I do.

What does your future look like now that you’re debt free?

Our biggest hope is that our children don’t make the same mistakes with money that we did. They’ve watched us struggle, work, and sacrifice to get where we are today. They celebrated harder than we did when we made our last debt payment and screamed, “We’re debt free!!!” They have learned how to give, save, and spend their own money. They’ve learned to delay purchases, take time to review and compare prices. And most of all they’ve learned that “if you don’t have a plan for your money, other people do”. Changing our family tree is the biggest gift this journey has brought to our family. My hope is that it will continue on for generations to come.

Tell us where we can find you and where we can purchase your amazing products!

I share our journey over on Instagram, @thesmallhelm.

I also sell personalized kids bank boxes on Etsy.

How Sara Paid Off Over $150,000 Of Debt To Reach Financial Freedom (2)

Want to read more debt free stories? Check out the ones below:

  • How we paid off over $111,000 worth of debt
  • The steps one family took to pay off $490,000 worth of debt
  • Debt Free Story: How they paid off $27,000
How Sara Paid Off Over $150,000 Of Debt To Reach Financial Freedom (2024)

FAQs

What is the path to debt-free? ›

The path to a debt-free UC

UC is committed to making it possible for all of our California undergrads to complete college without taking out loans by 2030. The debt-free plan will cover the full cost of UC — including housing and food — through grants, scholarships and work-study.

How to get excited about paying off debt? ›

Celebrate small wins

Celebrating small wins will help keep you excited while paying off your debt and will prevent you from burning out. Decide on a specific milestone — it could be $1,000, $5,000, or any number that makes sense for your debt payoff plan.

What to do once debt-free? ›

Life after debt: 4 steps to take once you're debt-free
  1. Create a budget. Eliminating monthly debt payments creates new financial flexibility for money that was previously tied up. ...
  2. Build an emergency fund. ...
  3. Pay off credit cards immediately. ...
  4. Invest extra funds.
Apr 5, 2024

What is it like to be debt-free? ›

Debt-free people don't compare their lives to those down the street or on social media. They know they're on their own journey, chasing after their own goals and dreams. And because they're not comparing themselves to others, they're more at peace and content with the lives they live.

How to pay off 100k in debt? ›

How To Eliminate $100,000 of Debt
  1. Recognize You Have a Big Problem on Your Hands. ...
  2. Make a Plan. ...
  3. List Out All Your Debts. ...
  4. Create a Hard Budget. ...
  5. Focus On Paying Off Debts With the Highest Interest Rates First. ...
  6. Don't Skimp On an Emergency Fund. ...
  7. Get a Personal Loan To Consolidate Debt. ...
  8. Consider Debt Resolution (Settlement)
Feb 15, 2024

What are the three biggest strategies for paying down debt? ›

Common strategies for paying off debt
  • The debt avalanche method: paying your high-interest debt first. The avalanche method focuses your repayment efforts on high-interest debt. ...
  • The debt snowball method: paying your smallest debts first. ...
  • The consolidation method: combining your debts to help simplify payments.

How do I pay off debt if I don't make enough money? ›

Follow these seven steps to pay off debt on a low income:
  1. Find out how much debt you have.
  2. Create a budget.
  3. Pay off your debt with the debt snowball method.
  4. Increase your income.
  5. Cut your expenses.
  6. Avoid debt payoff scams.
  7. Believe you can do this. (Because you can.)
Jul 15, 2024

How to pay off debt but still enjoy life? ›

How to manage debt (and still have fun)
  1. Set up a budget to track your expenses and spending. ...
  2. Use cash for everyday purchases like groceries and eating out. ...
  3. Carefully monitor your credit card spending each month. ...
  4. Pay more than the minimum amount due. ...
  5. Pay off the credit card with the highest interest rate first.

What is the snowball method of paying off debt? ›

The "snowball method," simply put, means paying off the smallest of all your loans as quickly as possible. Once that debt is paid, you take the money you were putting toward that payment and roll it onto the next-smallest debt owed. Ideally, this process would continue until all accounts are paid off.

How do I wipe out all my debt? ›

SHARE:
  1. Re-examine spending habits.
  2. Determine the right payoff approach for your situation.
  3. Go beyond the minimum.
  4. Earmark extras to the balances.
  5. Consider debt consolidation methods.
  6. Embark on a debt management plan.
  7. Settle for less than what you owe.
  8. FAQs.
13 hours ago

What next after paying off debt? ›

The best opportunity here is to start putting it into savings. This can be an emergency savings account or retirement savings. This is especially important if you haven't been able to save for these things up until now. Automate the savings so that you aren't tempted to spend the money now that it's in your account!

What is the first thing to get out of debt? ›

First, always pay at least the minimum required payments on your credit cards and loans. Then, allot extra money toward paying down more debt and saving according to your goals. A debt consolidation loan or a balance transfer credit card can also help lower overall interest payments.

At what age are most people debt free? ›

The Standard Route is what credit companies and lenders recommend. If this is the graduate's choice, he or she will be debt free around the age of 58. It will take a total of 36 years to complete. It's a whole lot of time but it's the standard for a lot of people.

How can I live debt free forever? ›

Here are six ways to completely avoid incurring debt.
  1. Build a large savings. Working toward a sizable savings account is difficult, but it's also the most important way to stay out of debt. ...
  2. Pay off credit card transactions immediately. ...
  3. Buy a cheap used car. ...
  4. Go to community college. ...
  5. Rent. ...
  6. Buy only what you need.

Is it better to be debt free or have cash? ›

Tara Alderete, director of enterprise learning at Money Management International, says it usually makes sense to prioritize debt reduction overall, but there are exceptions. “If you already have adequate savings in your emergency fund, you may want to focus on quickly eliminating debt,” Alderete says.

How to become debt free quickly? ›

Consult with a professional credit counselor about your options for your situation.
  1. How To Get Out of Debt.
  2. Understand Your Debt.
  3. Plan a Repayment Strategy.
  4. Understand Your Credit History.
  5. Make Adjustments to Debt.
  6. Increase Payments.
  7. Reduce Expenses.
  8. Consult a Professional Financial Advisor.

How can I build my wealth once debt free? ›

Here are some tips to reach or exceed that $1.9 million net worth level.
  1. Setting and maintaining a budget. Even as a wealthy person, you still need a budget that's regularly updated. ...
  2. Trimming expenses. ...
  3. Increasing income. ...
  4. Building an emergency fund. ...
  5. Employer-sponsored 401(k) ...
  6. Roth IRA. ...
  7. Stock market. ...
  8. Smaller home.
Oct 14, 2021

Is it worth doing a debt relief program? ›

If you're one of the millions of Americans struggling to repay high-interest debt, a debt relief plan may be an option to help you get your finances on track. But it's not a quick fix. It's a long-term solution designed to help you get out of debt over a period of time — typically several years.

Who qualifies for debt forgiveness? ›

You may be eligible for income-driven repayment (IDR) loan forgiveness if you've have been in repayment for 20 or 25 years. An IDR plan bases your monthly payment on your income and family size.

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