My Military Family Paid off $20k in 13 Months: Here’s How!

financial-freedomThere we were, sitting on our couch, looking at our online banking while deciding what to do for dinner. My husband and I did a double take simultaneously, “We only have $37.00 to last us until next payday…which is 5 days away.”

We were scared.

We sat quietly, surrounded by all of our things; 48” flat screen, two new cars in the driveway, brand new shoes, and that wreath for the door I just HAD to have. We were chained to our things, reflecting on how we’d gotten there.

We were both just 23 when we got married, he’d been in the military for a little over three years, and I’d only been out of college for a year, and had lived with my parents only a few months earlier. I thought we were on the straight and narrow with our finances – I had a full time job with the state government that paid me about $32,000 a year, and our rent was covered, thanks to BAH. We were golden. Or so I thought.

It wasn’t until that day with only $37.00 in our joint account that I realized we needed to find a new way to manage our money. We had no savings, and had bought a brand new bedroom set with the few thousand dollars we got from wedding guests. Newlywed life was paycheck to paycheck for us, and at the time, I thought it was okay. At least we had a nice bedroom set. In reality, we were one ‘emergency’ away from having it all come crashing down. Ironically, my husband is a Command Financial Specialist, and has counseled many other Sailors with their own finances.

So, in 2012, after 3 years of marriage, and pushing countless paychecks to the brink, we took control of our money. We didn’t want to see what would happen when the ‘rainy day’ came without a decent umbrella in tow. By this time, we had PCS’d to another state, and I had gotten a new job, paying $34,000 a year.

We decided to take a popular religious-based finance class at our local church. There, we learned how to pay down our debt in the fastest way possible – from smallest to largest. We figured out how to account for every cent and give each penny a purpose. And we stopped using our debit cards for anything except gas, and to pay our bills online.

We cut back tremendously, and used cash for everyday things: groceries, dog maintenance, and the occasional lunch or dinner out. Every other dollar went towards our debt: two car payments and school loans. By following this plan, we paid off nearly $20,000 in 13 months, on top of our usual monthly bills.

Today, we still use a ‘cash budget,’ and put hundreds, sometimes thousands, of dollars into our emergency fund each month. ‘How-in-the-world-will-we-be-able-to-pay-for-this’ emergencies are now just little inconveniences. Like the time our dog got sick while we were on vacation, and we rushed her to the doggie emergency room. Nearly 4 hours and $475 later, we paid in cash and took our fur baby home to mend.

Many military families live paycheck to paycheck – like we did.  But this does NOT have to be your reality.

Have you found an awesome way for your military family to save money? Share it with us in the comments!

shannonPosted by Shannon Prentice, Content Development Manager


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  1. 3

    You don’t really say what you did. Give Details! Did you stop eating out as much (you do indicate that, but never outright say it)? Did you stop buying the latest and greatest technology? Pay down the largest interest loans first? Started bagging your lunches? People in these situations need details. Most don’t realize what it is they need to change.

    This also doesn’t really help out those that are in financial binds due to their family needs. A family where the spouse is home because they have 3 little kids and can’t afford day care won’t have that 32,000 to put towards bills. What do they do? Where do they turn? I understand that isn’t exactly the point of this article, but it is something that is related. You could also talk about the next step otherwise you are merely delaying the inevitable.

    True financial freedom is not having a large savings account. It is having your money work for you. This obviously comes when the debt is gone and the savings account is sufficient. What do you do when that debt is gone and your savings is more than enough? Do you avoid buying new cars? Do you still avoid buying the latest and greatest technology? Do you start to invest? How do you plan to invest? Real estate (difficult with PCSing), stocks, bonds, REITs?

    • 4
      Branching Out: A blog by the National Military Family Association

      Hi Rob! So glad you read – and you have great questions!

      Yes – we stopped eating out as much, packed lunches, stopped buying the ‘wants,’ etc. We paid minimum payments on the large debts, and threw every other penny we had at the smallest debts (thus eliminating them ASAP). After the smallest debt was paid, we put what we would have paid on that towards the next smallest one, it’s a snowball effect, and it works!

      My situation is different from other MilFams, I realize, but that’s not to say that it’s not common. Simple financial management works for EVERYONE – but it just looks different for everyone, too. My blog post was mostly to show that catastrophic events aren’t the only cause of poor financial positions. Life happens, and with small decisions here and there, before you know it, you’re down and out.

      After all debt is paid, we worked towards putting enough money in savings to cover 6-8 months of our monthly bills. This is a big task, and we’re not there yet. But we’re still plugging away. After that, we’ll start saving extra for retirement. If kids come along, that plan might change to college funds. I don’t think we’d (personally) avoid buying another car, but we certainly would have enough patience to wait until we had a substantial amount of cash for a down payment. We also would buy ‘new-to-us’ cars.

      We haven’t gotten to the point of considering investments, other than Roth IRA’s, and TSP/401ks. Our goal for now is getting financially stable in everyday life, and once that’s done, we’ll move on to the ‘big fish’ 🙂

      We followed Dave Ramsey’s Financial Peace University – I’d recommend checking that out, or at least, take some time to read “Total Money Makeover.” Hope this helps! 🙂

      -Shannon S.

  2. 5

    Mu husband and I just celebrated our third anniversary and I’m 25 and he’s 27. We began to take control of our finances November 2014 after I had a serious health issue and realized we had no savings. We crafted a spreadsheet with ALL of our debt (school loans, car loans, credit cards, etc) and monthly bills. We also listed the interest rates, credit limits and due dates so we could craft a game plan.

    3 months later, we’ve paid down about $3000 and just sold my car which I was upside down on (savings of $11k, $300 a month). I’ve worked as a substitute teacher but now that I’ve had surgery, I’ve applied to over 100 jobs and hopefully I’ll be working full-time again. With my education I plan to make between $37k & $43k and I expect to pay off my student loans $11k and our joint debt $5k this year.

    Thank you for sharing your story I’m glad there are other families taking care of their finances 🙂

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