Most people end up in debt at some point in their lives. Cars, homes, and college educations are quite expensive, and that doesn't include credit card debt that people incur from everyday purchases.
It's possible to get out of debt if you keep your spending under control and seek opportunities to boost your income. Some people get out of the hole after putting $10,000 on their credit cards, but it's even possible to become debt-free if you're almost $1 million in the hole.
A couple recently completed a five-year journey of paying off $937,800 in debt. They followed financial personality Dave Ramsey's advice and shared their entire story on Reddit. These are some of the strategies the couple used to make such a big transformation within a few years.
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Give Yourself A Strong Why
If you want to achieve any goal, you need a strong motivator to make it happen. Becoming debt-free has many benefits that people understand. However, if you don't have enough motivation to work harder and make sacrifices that most people wouldn't make, you won't become debt-free.
The couple didn't mention having a strong reason for getting out of debt, but they revealed a big motivator. The wife mentioned that they were surprised by an accidental twin pregnancy. Having a kid will increase your expenses, but your costs will go even higher if you have two kids, especially if they are unexpected.
It turns out this discovery catapulted the couple into "faster forward motion" to pay down their debt. Some people give up bad habits and become more disciplined when they realize they are about to become parents. While you don't have to be a parent to become financially disciplined, you need a strong reason to change your current course.
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Sell Assets To Free Yourself From The Weight Of Debt
Part of the couple's debt was tied to real estate. The wife had a property that she was thinking of turning into a rental property or an Airbnb, and the husband had part of a stake in a commercial property. The couple exited both of those properties and used the proceeds to pay off some of their debt.
Selling assets to pay off debt can reduce your financial stress and put you on the path to being debt-free. Some people prefer to take on more debt to buy assets, but it's not for everyone. It can feel like a big weight being lifted off your shoulders if you sell assets to pay high-interest debt.
If you sell assets, you can use it as motivation. For instance, you can look for ways to boost your income and cut your expenses so you become debt-free and can reacquire assets to replenish your portfolio.
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Stay Financially Disciplined
Selling those two properties wasn't enough for the couple to become debt-free. They still had to make plenty of sacrifices along the way, such as skipping vacations, not dining out, and thrift shopping. The couple regularly resold items after they were done using them.
The wife mentioned on Reddit that they also joined a food waste program to reduce their food budget. Food waste programs donate edible food that would have been thrown out.
The Redditor wrapped up her post by saying that the couple made it a point to live below their means despite being high earners. She mentioned that she knows plenty of high earners who are drowning in debt. Meanwhile, some people who are earning far less have better financial situations because they are smarter about how they use their money.
It's possible to pay off a big debt as long as you take a long-term approach and stay committed throughout the journey.
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