Spending Strike: Day 15 - Part 2: Ally & Family Pay Off $12k in Debt in 13 Months!

Today, folks, is a big day. I have two really awesome things to share with you. First, Michelle from Simplify, Live, Love and I hosted a giveaway for FOUR of our lucky readers to win a copy of The Spending Strike and The Spending Strike Workbook. The winners have been selected! Drumroll, please…

Michelle and I are emailing you to collect your information so we can get you your book and workbook. Please respond right away, or we'll have to select another winner to take your place. (Ruh roh!)

Today, I am also delighted to bring you a special conclusion to Ally's joint guest post for Michelle and I, in which she talks about her family's journey to pay off $12,000 in 13 months. If you haven't read Part 1 of Ally's story, GO HERE FIRST! She gives you the background for how she and her family came to the realization they needed to revolutionize their finances. 

Let's have Ally take it from here, OK? 

Do you remember where we left off?

You can read Part I here.

It is now December of 2012.

We had had enough of our money situation. Don’t get me wrong, it’s not like we were ever late on a bill (that would send me over the edge!), but we were sick of living paycheck to paycheck and not paying off our debt that was still just hanging around.

We set the Dave Ramsey plan in motion and got to work.

Here is the basis of his plan (but you can read into much more detail here - http://www.daveramsey.com/new/baby-steps/)
  • 1,000 into an Emergency Fund 
  • Pay off all debt using the Debt Snowball. 
  • 3 to 6 months of expenses in savings. 
  • Invest 15% of household income into Roth IRAs and pre-tax retirement funds. 
  • College funding for your children. 
  • Pay off home early. 
  • Build wealth and give. 
I was nervous. We you get started on this plan it is strict. You designate every single dollar that comes into your bank account to a “place”. Your goal is to have every dollar accounted for. Which makes sense, because we all know that when money is just sitting in your account it has a tendancy to get spent. And then suddenly POOF! It’s gone.

Step #1 is fairly easy – put 1,000 into an Emergency Fund. We had been already saving a bit, so this wasn’t that hard – plus we had some extra bonus money come in from our jobs around this time, so we had the $1,000 amount fairly quickly. The point of having an emergency fund is to have it there for an EMERGENCY and not touch it otherwise. You also have to rethink to yourself what actually is an emergency.

Needing a quick $200 to stay at a hotel for the weekend with friends? Not an emergency. Your dryer breaking down on your in the middle of the winter? Emergency. Holiday shopping money? Not an emergency. A new tire needed on your car after hitting a nail on the interstate? Emergency.

Get the picture?

Step #2 – Pay off all debt using the debt snowball. This step takes awhile, especially if you have a lot of debt. A short version of this idea is to list all your debts (including your house) in order from smallest to largest. Pay off that smallest debt first; it will give you a sense of pride and motivation to keep moving forward. Then take whatever you were paying toward that first debt and apply it to the second smallest debt, along with the money you’ve allotted for that debt. Get it? As you continue to pay off these debts the amount of money you are paying towards them will “snowball” and grow.

It took us exactly one year from December 2012 until December of 2013 to pay off 5 credit cards, totaling close to $12,000. Since then they have been cut up and closed. Yes, I said it – we closed them. We no longer have a credit card. Our mental outlook on cash has changed. Basically if we don’t have cash for something, we don’t purchase it. If an emergency comes up we use our debit card or dive into our emergency fund.

Pretty strict, huh? But if we hadn’t have taken this step we’d still owe $12,000 to various lenders, right? For that reason alone, I’m glad we did this.

We still have a large student loan left on our debt snowball. And a mortgage (but that is covered in Step # 6). So we aren’t finished yet!

Dave Ramsey says it takes on average 18 months to become debt free, minus your home mortgage. I’m not sure we can pay off that large student loan in the next 8 months, but we’ll give it hell trying!

Since, we are still on Step #2, I’m not going to dive into Steps #3-#7, but you can read more into them via this link - http://www.daveramsey.com/new/baby-steps/.

Another HUGE part of this system is using cash. Like for everything. That being money straight out of your checking account via your debit card (remember we aren’t using credit cards) or really using cash. You know, that green stuff?

If you remember back, our grandparents were great at this. They paid cash for items. If they didn’t have the cash, they didn’t purchase it. We’ve come full circle folks!

We also use the Dave Ramsey cash envelope system. Here is how it works. When you get paid, (like I talked about previously) you allocate every dollar to something. We use a simple excel spreadsheet at our house. Here is an example (not from us, just an example!):

Monthly Income: $2400
Mortgage -$700
Utilities -$150
Cell phone -$100
TV/Cable/Internet -$80
Daycare -$300
Car/Life Insurance -$210
Remaining balance $860
Remaining balance $860
Food -$200
Gas -$200
Weekly Cash -$60
Remaining balance $400

This remaining $400 goes towards debt. Whatever debt you are working on at the time apply the $400 to that bill. That brings your balance down to $0. Now if you are like us and feel a bit timid leaving your account reading $0 – keep $10 or so in there. Not sure why, but it makes us feel a bit better!

We also take that $200 cash out for the grocery store and $200 cash out for gas in our cars. That way when I do my grocery shopping all I have is that $200 in cash. Because you do know that when you have a debit card in hand, you almost always spend more than you had planned, right? When that $200 in cash is gone in grocery money before we get paid again, we just have to deal with it. Since I’m a cook, it’s pretty easy for me – I can make a meal out of almost anything. You learn to keep a stocked pantry and freezer.

Remember this budget is just a sample – each family will have different expenses. In some parts groceries are more expensive, or maybe you only have one car so you spend less on gas, it will be different in each family’s case.

Also, my husband and I give each other $30 each pay period. We can spend that cash on WHATEVER we want. No questions asked. I usually spend most of mine on lunches with girlfriends on the days I’m working or grabbing something at the store, I’m pretty sure my husband spends his on gas station snacks and the occasional case of beer!

At this point in our lives we can no longer just go and buy anything we want. But if we budget for it? Sure.

Recently, I needed some maternity clothes – yes, we are pregnant with #3! So we put that cash into the budget for the month. My husband wanted to go deer hunting, so we set money aside for him to purchase his license and deer tags. Soon we’ll have to start setting some money aside for bunk beds for the two older kids. Things come up, but as long as they are budgeted for – it all works out.

But, if I just get a hankering to go shopping on my lunch hour, I can’t, unless it of course costs less than $30! This is hard. I have girlfriends that are often jetting over to Target or buying the latest cool trend online and I can’t do that. I may see a neat toy or outfit for our kids, but I have to refrain. I’ve had my fair share of “meltdowns” with myself because of this. But then I look back at that $12,000 and realize it has ALL been worth it.

I am by no means an expert in any of this. But as a family we have come a long way. The stress of finances is no longer there. We know where every cent is going. I am not being paid by Dave Ramsey to promote his program, I just believe in it. And frankly, this program may not be for everyone and that is okay! But I do believe everyone can find a system that works for them – there are many out there.

I hope our story has given you some insight to your own family’s finances. Remember, everyone has to start somewhere. As Dave is famous for saying “You’ve got to live like no one else now, in order to live like no one else later”.

Explanation: It will take many years of hard work and sacrifice to get where you need to be, but once you are there you can live like you never have before.

Questions for me? I’d be happy to take them. Email me at sweetandsavoryfood@hotmail.com.

Thanks for listening!


Here are the numbers -

Money Spent Today: $25 {food at the airport on the way home from vacation}
Running Total: $55
Money We Didn't Spend: $0


  1. Thanks for posting Part 2 Kelly! I hope people enjoy reading.

    1. I loved reading it. Thank you so much for sharing your story!

    2. You are very welcome! This is such a hot story right now :)

  2. Way to go Ally!! It has to feel amazing!

  3. This is awesome and inspiring, Ally. Thanks so much for sharing your story. I'm sure you will help someone out there!! :-)

  4. Thanks for sharing. This is how we handle our finances (with the addition that we actually have several accounts to keep the different 'funds' apart. So we have an account for car repair and one for holiday savings etc.
    We also have a little pocketmoney each month (and have seperate accounts where we keep that money).

    I so recognise the not-hving-money for just anything (shopping, spending etc). I get frustrated when I see other who can do that. Untill I look at how much we are paying off on our mortgage (yes, we got as far as starting on that debt). It is really worth it.

    I want to encourage every one who wants to do this. It IS really worth it!

    1. I love reading comments like this. They are so affirmative of the awesome work people are doing!

  5. We have been working on paying things off for a few months. Hooking us up w/Dave's website helped point out what we need to step up our game. Thank you!

    1. Woo hoo! Be sure to stop back often, Kim, and share your progress :)

  6. Wow, excellent post. I'd like to draft like this too - taking time and real hard work to make a great article. This post has encouraged me to write some posts that I am going to write soon. couple skeleton wedding costume


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