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Debt Free ~ Alyssa & Ryan’s Story
Today I have an interview with Alyssa and Ryan who run Just Another Dollar. They are on a journey to paying off $107,000 of debt and I wanted to share with you their inspiring story to help motivate you to do the same!! Take it away Alyssa…
Hi! My name is Alyssa and my better half is Ryan and together we run JustAnotherDollar.com. “Just Another Dollar” has always had two meanings for us. The first way we see it is the mantra of our financial struggle and perseverance (much like “just keep swimming”, the popular Finding Nemo reference.). Every dollar we pay towards debt or save is one dollar closer to financial freedom.
The second interpretation of what “just another dollar” means to us is the nonchalant attitude that people who are financially free have about life and finances. At that point, another dollar earned or spent is just another dollar, which isn’t as big a deal. We hope to turn our blog from the first perspective to the second perspective by documenting our journey to becoming debt free and financially independent.
Tell us a little bit about yourself
We are a originally from Minnesota. In 2016, we left our hometown and moved 900 miles to Colorado. Ryan works as a Certified Public Accountant doing taxes, and I work in environmental health and safety for an Oil and Gas Company.
Together we are a perfect family of four including our two cats. We love exploring all that Colorado has to offer, especially the mountain hiking trails and numerous craft breweries. We love to travel and experience new landscapes and cultures.
Together we started writing Just Another Dollar at the beginning of 2017 to document our personal finances and are really putting everything out there for the world to see. It was a terrifying and exhilarating experience because neither of us had ever had a website and barely even used social media.
Overnight, we entered this whole other world and it has been an incredible journey so far. People in the blogging world have been very friendly and encouraging. It has been a pleasant surprise to get so much support from complete strangers.
How much debt were you in and at what moment did you realize you were in big trouble financially?
We hit our highest debt amount after we moved to Colorado at the end of 2016. We had both quit our jobs in November, then packed up and moved to Colorado. Neither of us would start our new jobs until January, 2017. We didn’t have much savings, but I had managed to save around $5,000 for our move. The rest of the moving expenses (which were surprisingly high) and the two months of unemployment in a new city, were funded mostly by credit cards.
By the time we started our new jobs, we were up to $107,000 in debt and financially tapped out. That’s when we looked at each other and realized we needed to get serious about our finances. That was the start of our debt free journey.
What made you decide to finally start digging your way out of debt?
That January, when we actually sat down and looked at where our money was going, we saw that in the previous month, we’d spent $1,200 just on groceries and eating out when our total income was $0.
On top of the outrageous spending, we added up our minimum debt payments for student loans, two cars, and two credit cards. $1,776 per month! That was the gut punch that led us to living on a pretty strict budget. We had gotten in this mess together and we were going to dig ourselves out together.
How long have you been working towards your debt free journey and how much debt have paid off so far?
We were very grateful that Ryan had a good job right away in January. His income was enough to kickstart our debt repayment and kept us afloat until I started my job at the end of February.
Since January we have paid off over $16,000 in 5 months! We are continuously looking into ways to put more and more of our monthly income toward our debt and really start to snowball our debt payments.
When do you expect to be debt free?
This is a bit more tricky, as our plan is to buy a house/duplex late in 2018 to start growing our retirement portfolio. We go back and forth on when the right time to buy a house is with the market so high right now. We plan to pay the remaining $17,000 in credit cards and car loans by the end of August, 2017. That would leave us with our student loans remaining to pay off.
This is where we would most likely slow our debt payments to save for a downpayment on a house. After crunching all the numbers and factoring a house into the mix, we are looking at being debt free (excluding a mortgage) by the end of 2019. That is not truly “debt free” but we see a house as an investment. We are already paying an astronomical amount in rent for a two bedroom apartment with no return on investment and could be paying less or an equal amount to put toward equity.
What things you are doing in your debt free journey that you feel are the most helpful?
Establishing our budget has been the biggest key to staying on track and putting everything we can toward our debt. We aren’t perfect by any means; sometimes we go out to eat and go over our budget but it is nothing like at the end of 2016.
We also discuss our situation, how we feel, and adjust the budget as needed. Writing our monthly updates for the blog is also a huge motivator for us. We get really excited when we see chunks of the debt gone every month. It pushes us to make the next month even more impressive for us and our readers.
What is the hardest things you are dealing with throughout this process?
The hardest thing is being patient. The realization that even though we have paid off $16,000, we are still in the hole for over $90,000. It can be very daunting to think about how long this journey will actually be and stay motivated.
Sometimes we get in “woe is me” ruts where we are hard on ourselves for even having so much debt and that can be a big morale killer if we let ourselves fall too far down the rabbit hole. The journey to be debt free is more of a mental game than anything. We are lucky we have each other to stay motivated and keep going.
What steps are you taking to overcome them?
As 20 somethings in Denver, it is nearly impossible to say no to every invitation to a new experience. We have built in some “fun money” into our budget for those ‘can’t miss’ memories and to enjoy the reasons we moved to a beautiful state.
Although, we are pretty frugal with our fun money and usually end up using it for celebrations for paying off large chunks of debt or big milestones in life. We also allow ourselves a Friday night happy hour date night which is very helpful to keep the romance alive, even on a budget.
How are you keeping yourself motivated to keep going through your debt free journey?
We stay motivated by having frequent check-ins by sitting down with our budget worksheet and talk through our finances on a weekly basis. We’ll discuss what we did well and what we need to do better next week. Also, we have implemented a policy during our debt free journey that any purchase over a $20 gets discussed before it can be purchased.
This way we are completely transparent with each other about where our money is going and have great discussions about it along the way. Most of the discrepancies in our spending comes from food. Our grocery bill varies quite a bit and if one week we spend over $100, we try to keep it under that the next week. We don’t beat ourselves up over the small stuff.
What tools are you using to help you throughout the process?
We link our bank accounts to Mint.com which allows us to track all of our transactions and shows how much we’re spending by category. We highly recommend people use Mint, especially if they are just starting a budget or need an easier way to track where all their money goes.
Ryan created an Excel workbook that allows us to input our income and expenses and show us what we have left over to allocate to our different debts. Our version also has advanced features like projecting net worth, and an interest calculator for various loan payment amounts. This user-friendly budget tool is available to download from our website here.
What are some tips you have for others who are in debt and wanting to be free of it?
As with most good tips, a lot of ours come from trial and error. Part of the reason we started Just Another Dollar is to try and help others to avoid the same mistakes we’ve made. A couple of our biggest pieces of advice:
1. Don’t put off starting your debt free journey.
Whether you know a lot or nothing at all, start trying to pay off your debt. Life will happen and things will come up that derail you, but keep digging and you’ll learn a lot along the way.
2. Don’t be intimidated by your personal finances.
I came out of college petrified of personal finances because I didn’t know the first thing about money. Ryan taught me so much when we started dating and he has turned me from financially naive to a debt crusher!
Thanks Lisa! We have really enjoyed answering your questions and being able to share our story.
Thank you so much Alyssa and Ryan!! I really appreciate your participation in this interview. I’m sure it will help many people.
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