Part two of our debt free journey ending with us stepping full time into ministry and entrepreneurship with another car loan. To make matters worse, I traded that 4 door sedan in for an even larger family friendly vehicle rolling over $4,000 of negative equity into yet another car loan totaling $26,000.
What was I thinking? This was definitely an impulsive purchase that went against our financial goals. We were $11,000 away from being debt free again and I blew it adding an additional $15,000. The added interior car room suddenly wasn't so important once we drove it off the car lot.
At this time we also stopped funneling our remaining income at the end of each month from debt to building our savings (as the first debt free journey left us with essentially zero in our savings account). My husband enrolled at a Dallas Baptist University & Christ for the Nations to pursue an undergraduate degree in Christian Education & Criminal Justice, started the building process of our third home and had our third child!
Whew! 2017 and 2018 were two adventurous years for our family. Despite all of the changes we got out of debt for the second time, paid cash for my husband’s degree and had our third child with $60 in out of pocket costs without traditional health insurance.
This is how we did it:
1. Used Home Proceeds From 2nd House Sale
Once house #2, I wired over $20,000+ to Wells Fargo pay off the new car loan. We didn’t buy new furniture or go on vacation with the remaining proceeds but saved it for our third house’s down payment and to cushion our growing savings account.
2. We Downsized
There was a 7.5 month window between the sale of house #2 and completion of house #3. In the meantime, we stored most of our furniture in a POD and rented a 2 bedroom 2 bath duplex for $900/mo. It was a tight squeeze with two children and one on the way, but the extra cash flow from lower utilities and rent/mortgage helped us to stockpile our savings.
3. Applied for Scholarships, Lived on One Income & Cash Flowed the Remaining College Expenses
My husband applied for every scholarship available to prevent us from dipping into our savings. We lived solely on my income and every dollar of his income went directly toward education expenses. The extra cash flow from downsizing helped fund the costs as well. He completed the accelerated program in 23 months earning $50,619 in scholarships and grants.
4. We Became Healthcare Sharing Members & Had Our Baby for $60!
Health insurance for self-employed individuals can be pricey! As members of Christian Healthcare Ministries, the majority of maternity costs are covered. Our only out of pocket cost was for a $60 Dtap vaccine. There were no plethora of medical bills after delivery. All costs were paid in full with our monthly membership fee. I wrote about our experience in detail here.
Even though we had several life changes, our focus on remaining debt free was still priority. Although we are now debt free outside of mortgages, our mindset and discipline remains the same as when we were paying off debt. This has allowed us to live well below our means and funnel our money on things that matter most to us such as property investments, children’s education, vacations and travel experiences.
In the next post, I’ll share how you can focus your efforts and minimize the time it will take to knock out your debt and pump up your savings!
How do you avoid making impulsive purchases and remain focused on your financial goals when life events happen?