We made it! Debt-free by Christmas 2007!

What a wild ride it has been. At the beginning of this year, my wife and I set a goal of being debt free by Christmas. I did a spreadsheet showing how the finances would work and she created a wonderful motivation poster using colored markers and stickers, including one that looked like our cat.

We sent in our last payment to the student loan on Friday, December 8th and received the notice that said PAID IN FULL on Tuesday, December 11th. We paid off $21,888 in about 27 months!

I'm going to start with a look back on our journey, follow up with a post of the top 10 things I've learned, and then share some of the interesting reactions my accomplishments have received.

Our journey to be debt-free started on September 1, 2005. My wife and I had enrolled in the Financial Peace University class taught by Dave Ramsey. He had a no-nonsense very simple way of talking about money. He shared a way of creating a budget that made sense, some steps to dig out of debt, and how couples can and should work together to agree on what to do with their money. Exactly one year previous I had been laid off from my job, and we were still feeling the impact of that, even though I was working again.

The best part of the class was the accountability. Someone was there to give you a friendly thump and then some support when you screwed up and celebrate with you when things were going well.

Things were a bit bumpy - trying to stick with the budget despite medical issues and totaling the car when we hit a deer. We hit a major pothole on the road to being debt-free on August 31, 2006. I was laid off AGAIN. This time we had a budget, were used to spending less than we make. We had a plan. During the layoff in 2004, our credit card bills had doubled and hit a grand total of over $12,000. The 2006 layoff, using what Dave teaches - we didn't even have to dip into savings except to fix the car. And my in-laws paid for that for us for Christmas.

In December 2006, I found a much better paying job. As I started messing with January's budget with the new income, I came to an exciting realization: if we really watched our pennies, we could be debt-free by Christmas the following year, 2007!

I told my wonderful wife this, and we both exclaiming "I know exactly what to do!" About half hour later, we were both in the kitchen. She was hanging this great poster on the fridge, and I had a spreadsheet of how it could happen on the kitchen table.

Things looked good until sometime in June. The new job wasn't working out. I ended up leaving their on July 17th. I figured that was going to blow the whole plan. But we left the poster up and just figured we wouldn't be paying any more than the minimum payments in July. We cried, we prayed, we hung in there. God blessed with two job offers in August. Both even more than the previous job. One of them ended up offering more than I imagined I could ever make any time this decade. I took it.

After redoing the budgets with the new income, another realization. It would still be a tight squeeze, but we could still hit the debt-free by Christmas goal!

The closer we got to being debt, free, the more exciting it got. In November and December, we were throwing over half my income every month on the debt snowball - paying down the credit cards and then the student loan.

So here we are - debt free two weeks earlier than our goal, paying CASH for Christmas, and we don't owe a cent to anyone except the mortgage company. I'm already seeing my stress level go down and the balances in my bank accounts go up.

Merry Christmas everyone!

Expect the top 10 things I learned from this early this coming week and the reactions this news is getting by Friday.