In my introduction post, I mentioned how Mr. Macaron and I paid off all our debt and someone commented that they’d like to hear how we did it. So, here we go!

First, let me tell you…it wasn’t easy. It takes dedication, commitment, and everyone has to be on board to make it happen. That said, it was worth it. You don’t realize how tied down you feel with debt until you’re totally free from it. I am beyond glad that we put in the time and effort to do it.

It all started when Mr. Macaron approached me a few years ago about trying to get rid of all our debt. I was unsure of the idea and shrugged it off and it was just talk. But the idea kept coming up and after much debate and discussion, we decided to hunker down and really do it. We decided to follow Dave Ramsey’s approach. To start, we both read his book, The Total Money Makeover. After reading his book, listening to his radio show, and looking into it we really thought his philosophy made sense.

One thing that Dave emphasizes that tends to go against the grain, is that there is no such thing as good debt. We hear people these days saying how there is good debt and building credit is important. But, think about it — if you have no debt and use money (cash) then you really don’t need credit. It’s this concept that many friends didn’t understand when we told them what we were doing. Debt is debt and credit is credit – there is no good debt or credit. Yes, this includes mortgages! Although, it’s understood that mortgages are needed for a home, it’s still not good debt and eventually you’ll want to work off that mortgage debt, too.

Dave’s approach is to follow 7 baby steps, but it’s the second step where you’re really digging into the debt. Basically, you list out all your debt from smallest to largest, and you begin to pay them off one by one. He calls it the debt snowball – the ball gets bigger and bigger as you go!

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Here are a few things we did in our debt journey that we found helpful:

Budget Software – We started off using Mint.com, but it wasn’t doing everything we needed, so we opted to use Dave’s budgeting software, EveryDollar. You can use it for free, but you do need to pay if you want to connect your bank accounts. The latter was important to us, so we pay for the software. If you follow Dave’s steps, then the software works great. It forces you to review each transaction and file it to the appropriate budget item. This way you know where every dollar you spend is going. Each dollar has an assigned budget.

Monthly Meeting – Mr. Macaron and I sat down every month (and we still do this!) and reviewed our expenses for the past month together. Then we created a new budget for the coming month to follow. It was a good opportunity for us to align ourselves for the month and ensure we were on the same page.

Splurge Money – I was really worried when we started our debt journey that it would mean I never got to get anything for myself or go shopping (oh man, I love shopping!). So we created a budget for each of us each month for splurges.

With hardworking and teamwork, we did it! We started working off our debt around September 2013 and were debt free by December 2015. In that time, we paid off all of our undergrad and law school loans (we had both already paid off our cars before we started – whew!).

It was such a freeing feeling to have all our debt gone. It’s crazy to think about! But the journey never ends because we immediately moved on to saving! We saved up for a down payment on a home, and we are proud to say we are first-time homeowners. Now, we’ll start working on the home loan.

We started this journey in hopes of building a legacy that we can pass onto Petit Macaron and model to him how to use finances properly and wisely. I hope you find this encouraging. It may seem impossible, and I definitely felt this way at times, but it is possible and you can do it!