- Groceries - $250/month. It was really, really hard to keep this one and usually resulted in "pantry surprise" meals at the end of the month.
- Gifts - $0-$100/month. Obviously it varied by what events were that month. Also, we didn't follow proper etiquette by how much Real Simple told us to spend on wedding gifts, so sorry about that.
- Entertainment - $20/month. Typically we would budget for going to the movies once a month.
- Clothing - $0-$200/month. Most months this was $0, but every 6 months or so we would buy some new clothes.
- Personal Budgets - $20/month. This was our personal blow money. We could spend it on whatever we wanted...and let me tell you $20 does not go very far in this day and age.
- Car Maintenance/Gas - $250/month. Pretty self-explanatory.
- Home - $50/month. Included home repairs as well as any small upgrades we wanted to do.
- Food Out - $100/month. Christine and I used this money for 4 dates/month, one for each weekend. $100 will net you 4 meals at your local Chili's. We also brought our lunches to work every single day to help save money there.
Our typical total variable expenses each month was around $800. This was allowing us to put about $1500-2000 towards the $60k. Throwing $1500 at a $60k debt will have it paid off in 3.33 years. $2000 in 2.5. Neither of those seemed fast enough for me, especially considering that we wanted to start a family in the next year and a half. I started thinking of other ways that we could up our income or save money. I brought up the idea of a part-time job again to Christine who now was on board after seeing how much we were paying in student loans. I began researching part-time jobs via Craigslist. I had heard that loading UPS trucks at night was a good part time job that paid well, but there were no centers in Austin. Dave Ramsey had always used the example of delivering pizzas in his talks, so I went down and picked up an application from the Domino's down the corner. I got cold feet and never even turned the application in. Then one day I saw a Craigslist ad for an opening for nights/weekends to deliver pizzas at Mr. Gatti's. I dropped by and filled out an application on the spot and the manager, seeing that I was an engineer, just kind of looked at me funny. I told him me and my wife were trying to pay off debt quick and ended up getting the job. I started delivering pizzas Friday and Saturday nights.
[A quick aside about the whole second job thing if you are an AMD employee. I ALWAYS prioritized work for AMD and there were multiple times where I called in to Gatti's saying I couldn't make it due to AMD. I did not clear it with HR (not sure if they allow it or not) and as of the writing of this blog post only one person at AMD knew about this, so I'm writing this in confidence that if by chance you read this you won't say anything. I don't see how it is any different than someone who has a photography business etc. on the side, but just wanted to throw out this disclaimer. If you've found your way to this blog it's because you follow Christine or myself on Facebook/Twitter, which means we are good enough friends anyway and I trust you. Thanks.]
My first day was March 26th, 2010 and I basically never looked back. I worked about 15 hours a week at Gatti's and would make anywhere from $15-$25/hour, which was netting us an extra $800/month!! To top it off, it was pretty relaxing work and went by extremely quickly. I was slightly worried about the miles I was putting on my car, but figured this was a short term activity, so no long term concerns there. I think the worst part about it was being away from Christine, who had to spend most of her weekends by herself.
In April, God really blessed us. Now, I'm definitely no prosperity gospel believer, but this is a pretty cool story. K-Love was having their pledge drive and Christine and I felt led to start donating monthly. We knew we were still in debt, but really felt God calling us to give. So we did. The next day I found out I was unexpectedly promoted to Senior Engineer and got a pretty substantial raise. It was an amazing blessing, and even though I don't believe in the prosperity gospel, it was really cool seeing God provide for us as we were being faithful in our tithes to our church and offerings to other outlets like K-Love.
So now we were able to put about $3,000/month towards the school loans. And the cool thing about the debt snowball was that each time we paid off a 5k or 10k loan, we would get an extra $50 or $100 from the old payment and we would use that payoff the other debts. The snowball continued to get bigger and we pushed full steam ahead.
We worked hard the rest of the year and saw that if we really skimped we could potentially be debt free in May of 2011 after selling some company RSUs and hopefully getting a bonus. The bonus came and we made our last payment on May 5th, 2011. We have been debt free for less than a month and it feels fantastic!!
I think the moral of the story is to encourage people and say that if we can do it, you can do it. We were blessed with a good income to start, but by picking up extra work, budgeting, and deciding to not buy unnecessary items, we were able to pay off our loans. I really recommend getting Dave Ramsey's "My Total Money Makeover" and reading through it. If you let it, it can change your life.
We are continuing to work on the baby steps. As of today, we are on baby step 3. Knowing how good it feels to be done with baby step 2, I can't imagine how great it will feel to be done with baby step 6. Maybe I'll write another blog post when we get done with that. ETA 2020.
Thanks for reading. I hope you enjoyed it and that it helped you in a small way.