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Destination: a debt free new year

Since the last time I wrote to all of you about our debt free journey, Christopher and I hit a few personal milestones. The first is that in November we passed the $100,000 mark in debt paid off. Hooray! (That number is both liberating and terrifying to admit).

The second, which might actually be more meaningful as far as our day to day lives go, is that we had a true emergency come up recently and we were able to handle it. One frosty cold morning my husband found himself stranded in the grocery store parking lot thanks to a busted fuel pump. As (rotten) luck would have it, on the same morning our car was dead in the driveway. Not our best day.

However, we were able to make repairs thanks to having an emergency fund. By the end of the week, things were back to what passes for normal around the Fleck household, amazingly without any lasting financial repercussions. A few years ago that certainly wouldn’t have been our story.

Christopher my heroFrom Instagram:  This was a horrible week. A chipped tooth (me), busted fuel pump on one vehicle, dead battery on another, a funeral of one of his childhood friend’s father, and devastating news for a family we love very much … Just many challenges and heartaches. And he? He was my knight in shining armor as always. I could write him a love letter every day and it still wouldn’t be enough.

I have to be honest with you, in the past I’ve been hesitant and a more than a little embarrassed to share our debt story. I’m thankful to Tsh for her encouragement to share our journey with you here at the Art of Simple and I’m also very thankful to all of you who have shared your own stories.  Your openness makes it easy to be honest about our own struggles.

Because of you, Christopher and I have been more motivated than ever in 2013 to get out of debt. You know where we’ve been and you’ve received these posts from me without judgement, even become our cheerleaders.

Thank you.

This year was a positive one for our family and we made some real strides on our debt free journey. We’ve got some big plans for 2014 and I hope you’ll all be here to share the journey with us and celebrate some financial victories of your own, too.

Financial Goals []

Where we hope to be in 2014, our goals, and how we plan to get there:

• Build our emergency fund back up, replacing the money we took out to cover vehicle repairs. If we are extra frugal with the grocery budget and holiday budget in December, barring any other true emergencies, we will accomplish this before New Year’s Eve.

• Continue to aggressively pay down our debt, living on about half of our income and dedicating every available dollar to paying down our last two Baby Step 2 debts in the first two-thirds of the year in 2014 (sooner if we can).

• Keep motivated by breaking the above debt into smaller portions and celebrating each milestone paid off (since it will take us some time to pay the entire amount down). Perhaps a homemade candle lit victory dinner each $1000 paid down? Any frugal celebration suggestions, Art of Simple readers?

• Continuing with the motivation theme, creating a visual reminder of what our goals are and displaying it someplace where we will see it and be reminded of it often. I’m a really visual person and I think this will especially help me, as we’ve been in debt so long it is hard to imagine a life free of it.

• Work on saving up a fully funded 3 – 6 month Emergency Fund and get serious about our retirement savings. I don’t think we can get this done in 2014, but we can get a started.

• Begin to pay down our largest debt (which technically can be added to the Baby Step 6 category along with our mortgage since it is more than half of our annual income) and our mortgage at the same time, setting ourselves up for debt-free success in 2015 and (long term) a pretty sweet ’16!

For a little extra motivation as we prepare to welcome a new year, there’s a well written post by Charlie Park here on the Art of Simple with four steps to simpler financial goals.

Now, on paper, all of this works. We will see how the reality pans out. But, I’m optimistic, friends. We are so close to making our goals a reality and I think another year, maybe two, of hard work and dedication will get us where we want to be.

Did you miss any of my debt free journey posts in 2013?  You can catch up with our story here:

What about you? Where does the end of 2013 bring you as far as making your financial goals a reality? What are your plans for a debt free new year in 2014?

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  1. Robin from Frugal Family Times

    Just this year we got debt-free after working on it for about 8 years. Now, mind you, our definition of debt-free was just our consumer debt – we still have a mortgage and we’re ok with that (for now).

    Are you including your mortgage in your debt free 2014 goal Kara? That would be a steep mountain to climb with a young family in tow.

    • Kara

      Wow! Way to go!!! I bet that feels awesome!

      No, not our mortgage (though, ironically, our mortgage is not our highest debt anymore) we have one whopper of a student loan that is still more than half of our annual income that we are actually planning to pay off in baby step 6 along with our mortgage.

      On paper we can be free of our “other” debt by the end of 2014 and of the mortgage and everything else by the end of 2016. Here’s hoping! 🙂

  2. Ann

    Love it! This post has helped me come up with a gift idea for my husband. I think I have enough time to pull it off-a get out of debt plan. In it I’ll include a snapshot of our debt, our plan, some ideas and promises, and rewards for milestones. I think he will really appreciate it.

  3. Katie May

    After four years of steadily purposing to pay off debt (my car debt and my husband’s medical school loans…both acquired before we ever got married), we were able this summer to pay off all debt (aside from house debt). My husband worked hard, we lived simply (and continue to live simply), and we set aside as much as possible to pay off debt these past four years. This summer was an exciting milestone for us! Reaching this goal this past year allowed my husband to go part-time at his job, freeing up his time to pursue things closest to his/our heart. We now get to spend considerable time lay counseling, mentoring, speaking, and leading retreats. So grateful to be freed up to live the life we were designed to live!

    • Kara

      Katie May – this is WONDERFUL! Way to go! 🙂

      And, I love hearing how getting rid of debt has allowed you both to make room in your lives for things you’re passionate about. As you say, freeing you to live the lives you were designed to live!

      Your story is motivating. Thanks for sharing it!

  4. Sarah M

    Way to go! That is incredible. Congrats to your family. Have you ever done a post on your budget? I’m just wondering because I am always looking for ways to ‘trim the fat’ in our own budget. Over the years I’ve gotten VERY good at this, but then I’ll find out a family of 5 eats on $150/month and I can’t IMAGINE going lower than we already do (without the crazy couponing). I just wonder how some people keep those low amounts month to month. I would be willing to share some of my best tips, too!
    Sarah M

    • Sarah G

      Right there with you, especially on grocery budget! We have a family of 3, eat meatless several times per week, shop at Aldi and pick up the rest of the items I can’t get there on sale with coupons at the pricier grocery store and STILL we spend 375-500/month for “grocery” (which includes toilettries, papergoods, and food). Granted, we have people stay in our home and eat dinner with us a LOT so if it was really just for the 3 of us, it would probably be more like 300-400/montb, but still, like you I see people with crazy low numbers all the time and I just think, “What am I doing wrong?”

    • Kara

      You know I haven’t done a budget post, mostly for the same reasons you describe: I think I’m flowing along pretty well with ours for a family of six and then I’ll read about someone else with a similar family size who spend half or even a quarter of what we do and I’m left scratching my head.

      Maybe that will be a post I take on in 2014? It is always interesting to me to see what others do, even if I can’t figure out how to translate that to my kitchen 😉

  5. Sarah G

    Wow, congrats on all the progress you guys have made! As far as cheap date night ideas, we like to take a board game to a coffee shop, order 1 largest sized flavored latte and sip it together while we play and talk. For babysitting, either swap sitting with someone, or if you are so lucky to have them near (we are not) ask the grandparents if they’d be willing. Best wishes for 2014!

    • Kara

      Thank you!

      I love the board game in a coffee shop idea – romantic and yet frugal! 🙂

  6. Sharon

    Sharing your story is a really courageous thing to do. Stories are powerful as they have the ability to encourage, challenge, inspire, and affirm. I’m glad you shared yours.

  7. Lizbeth

    Mortgage paid in full, still must pay annual property taxes due in January. Vehicles paid in full. Car and house insurance paid every six months. Credit cards used, but paid in full at the end every billing cycle.
    And no, it is not a life of feeling deprived. It is rather liberating.

    • Kara

      Awesome Lizbeth!

      I’m always a little in awe of folks who have the discipline to use cc’s well and not get into trouble with them (like we clearly did). Kudos to you and yes, here’s to liberation!

  8. Megan

    Congratulations on your progress!

    We had been working hard on getting rid of our debt, but put a pause on this year to cash flow our kitchen remodel and then the birth of our second son. Both things I’m extremely happy about, but I was bummed to not see much movement this year on our debts. I’m looking forward to re-prioritizing in the new year and knock them out. Good luck to you!

  9. Violet

    Wow! Congratulations on hitting such a HUGE milestone.
    Isn’t the EF a wonderful thing? It helps to give you peace instead of a panic attack.
    I’m thankful that you are sharing your story; it keeps others (like me) encouraged and motivated when they can hear stories of others’ progress along the same journey. Keep up the gazelle intensity!

  10. prasti

    thanks for your openess and sharing your story with us. it is an encouragement! we are on our debt free journey as well, and i remember last year having a similar experience like yours where one after another emergency came up. almost all of our emergency fund money was gone, BUT we didn’t have to go into more debt to take care of those emergencies…which was so liberating! a few years back we would have never been able to do that. it was a little frustrating having to rebuild our emergency fund (because it meant stopping paying extra money on our debt), but nothing compared to the frustration and stress we used to feel about how we were going to pay off our growing debt. we just paid off our car earlier this year, and we now have one more debt (excluding mortgage) out of 6 left to pay off :).

  11. Jennifer

    This year on September 15th, we were able to pay off the last of our debt (other than our mortgage)!!! And it feels so good. While we have a little more freedom in our budget we still have so many other goals to meet before financial independence but seeing the debt disappear was a really freeing goal. Our other goals are all about our own future and not the future of companies we were indebted to already. Next up is fully funding our emergency fund to six months!

  12. Tanya

    Is it prett hard to live on half your income? That would be quite an adjustment that is for sure.

    • Kara

      Yes, and no. We didn’t start off this way, it happened in small baby steps. And, honestly, we’ve been doing it for a few years now so it is a way of life now. Living frugally is certainly easier than the way we were living before, which was pretty much in financial fear.

      I guess the short answer would be some days it is easier than other days. I’m glad we won’t have to do it forever and I wish we never had to do it to begin with.

      But I’m thankful we can. 🙂

  13. Rebecca

    Congrats! I know paying stuff off is soo liberating and a great relief.
    For me I decided with my emergency fund to finally pay off one of my student loans as an early holiday present to myself rather than wait until sometime in January. My original plan was to pay it off in January but, decided to go for it and then pay myself back instead. I have one final student loan to go and I have no idea when I will be debt free but, slow and steady and it will get done.

  14. Erin

    Kara, I think you and I are on a very similar journey. Congratulations on your progress so far. I know just how dedicated you must be. Since my husband and I are also visual, we made a paper chain to “see” our debt payoff progress. Every link ripped off is another $100 closer to our goal. I blogged about this (along with links to some of our other financial progress posts) here: I sure do love ripping off those links! Congrats on your hard work and all of the progress you’ve made.

    • Kara

      Oh, Erin, I like that idea a LOT!

      And, yes, here’s to ripping off those links! Way to go! 🙂

  15. LiisaR

    Hi, Kara!

    I had a quick question… we are on the debt-free path, thanks largely to Dave Ramsey’s teaching, but I had never heard about a large student loan amount being moved to step 6. Does he teach that? It would really change some things for us if we did it that way. We have a big loan that is almost what we make in a year, and we rent so we don’t really have a mortgage. It is interesting to think about building a large emergency fund, saving for retirement and saving for a house BEFORE paying down that massive loan. I’d love your thoughts if you have a second!
    Thanks!! 🙂

    • Kara

      Hi Liisa 🙂 Now, remember I’m not a financial adviser and I don’t claim to 100% fully know the ins and outs of DR. We’ve been going by a reading of Dave’s book plus a printout I found online in 2009 outlining the steps (I pasted this in my binder and we’ve been following it ever since) and my understanding of what I hear Dave advise on his radio show …


      …. the way my husband and I understand the baby steps is that if you have a debt (a single debt amount, not your total debt amount) that is greater than half of your annual salary, it can go into step 6 along with pay off the house.

      You work steps 4, 5, and 6 at the same time essentially, so saving for retirement, college, and paying off the house all together while paying that last debt off the rest of the way.

      OR you can just keep going with all of your focus on baby step 2 and get that puppy outta there! 🙂

      Since we aren’t in our 20s or even our 30s (I’ll be 40 in a matter of days, gulp!) we feel like we need to get going with our retirement and some kind of college savings for the kids (since our oldest is already 12 and 6 years will go by in a blink, I’m sure).

      *OUR* personal comfort level for now (we might always change our minds once we get the rest of our baby step 2 debt paid off – remember, we haven’t finished that yet) is that we would rather move on to finishing the big emergency fund and working steps 4,5, and 6 all together – knocking out that last HUGE student loan and our mortgage at the same time – after we have a larger EF and while we are saving for retirement and college, too.

      Not everyone would choose that, and I totally see the wisdom on both sides, but given our ages and the ages of our kids, it feels to us like the wise thing is to work the baby steps this way. It is what will help us sleep better at night 🙂

      Same gazelle intensity, just adjusting it for the late start and the decades it took us to finally wise up about our debt 😉

      Does that make sense?

      • LiisaR

        Yes, thank you!!! I so respect your journey with all this… I am 35 but we don’t have kids yet so we will have to figure out what makes the most sense for us. This is a new avenue we hadn’t considered — thanks so much for sharing your thoughts on it! 🙂

  16. Kathryn

    Thanks so much for sharing your story! It’s really encouraging and inspiring. We were cruising along at Baby Step 6 about 18 months ago, then took a big financial step back so my husband could take a new job that will be much better for him and our family in the long run. We stopped saving for retirement and college, stopped paying extra on our mortgage, and watched our emergency fund dwindle as we got hit with major unexpected medical and car bills. Reading your story has reminded me to be thankful instead of whiny: my husband is in town most of the time now instead of traveling every other week, he loves his work again, and we’ve been able to cashflow all the emergencies. Those are some big blessings. And now that he’s received a good raise, and I’m working more, we’re hoping to have our emergency fund rebuilt by the end of 2014 and possibly even be saving for retirement again.

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