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We paid off $241,000 and became debt-free in 9 years: Here's our best advice

Arrest Your Debt founder Ryan Luke shares his debt payoff strategies.

Arrest Your Debt founder Ryan Luke and his wife Courtney.
Courtesy Ryan Luke

In nine years, my wife and I have paid off $241,000 in debt. It wasn't always easy, but we've learned valuable lessons along the way about setting financial goals.

Our money journey started in 2004. It was a big year for me. I turned 21, I landed my dream job as a law enforcement officer, and I met my wife.

As a couple, we lived paycheck to paycheck for years. We didn't know any other way. Somehow, we had gotten "comfortable" with the reality of being one financial disaster from losing everything. And in 2011, when my wife became pregnant with our first child, we had to truly take stock.

Our vision of the future included saving and earning enough on one income so my wife would be able stay home with our children. The turning point was a date night before our kid was born. I realized that I was spending $1,000 dining out at restaurants each month. That was how much we were shelling out for car payments. 

I understood in that moment how important it was to financially educate myself. The extent of my money knowledge was how to balance a checkbook and to avoid spending more than I made. For the most part, I was able to do this, but I still had $5,000 in debt on a credit card, the new mortgage, and two vehicle loans. If we wanted to get out of debt and feel secure on one income, we had to make some serious changes. 

During that dinner we both agreed we didn't want to live like this anymore and were going to go on a budget.

We took action, and today we are debt-free.

How we got into debt

In 2004, I had been waiting tables and living at home with my parents to save money. But with the new job, I had an increase in pay, and it seemed like the right moment to move out on my own. At the time, I thought that the smartest thing to do was to buy a home rather than rent. Even though I was earning more than I had before, with what I could afford, my best option was a condo. 

I found one that was at the very top of my preapproval amount, if I opted for an interest-only loan. I made an offer, and the buyer agreed. With an interest-only loan and a five-year adjustable rate mortgage, I was on top of the world. Later that year, I asked my wife to marry me. We were thrilled, but that major milestone also came with some costs. 

When I proposed, I had only $2,000 in my checking account, so I decided to put her engagement ring on a credit card. When we got married in 2005, I hadn't yet paid off the ring. That means we were contending with that debt together, on top of my $24,000 car loan and about $7,000 on a credit card.

My wife also had a car loan of about $50,000. That meant we were paying over $1,000 a month in car payments alone. 

In 2009, the housing market crashed and I was no longer able to afford the inflated payment of my mortgage. I was forced to foreclose, which affected my credit. The following year, we used my wife's credit to purchase another home, this time on a 30-year fixed mortgage loan.

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To get out of debt, we set a common goal and worked towards it

Facing up to the realities of our debt and lifestyle was a humbling experience. We both quickly realized that a major life change was needed and we were not going to fight it.

Once we decided on a common goal and clearly understood our "why," we were able to develop a budget that we felt good about sticking to. We started living on a budget in 2011. Our first goal was to cut back as much as possible on all unneeded expenses and focus on the basics: food, shelter, clothing, and other necessities.

Some of the expenses we cut from our budget were, cable television, eating out at restaurants, increased vehicle deductibles to lower our monthly car payments, Starbucks, and video game subscriptions. This saving helped us establish an emergency fund with $2,000 in cash for the unexpected, like if we had to fix one of the cars.

We paid the minimum of all our debts, except the one we prioritized

From there we shifted our focus to paying off my credit card. Our debt-payoff strategy was to pay the minimum on all of our debts except for the one we were attacking. By doing this, we were able to pay off my credit card in about two months.

Next, we shifted our focus to paying off our vehicles.

We were paying about $1,100 on vehicle loans each month, and we were sick of it. We made the minimum payments on everything else and focused on paying off one vehicle at a time. I also picked up extra off-duty jobs, and we put every spare cent towards that principle balance.

In two years, we were able to pay off about $74,000 on both vehicles. And we still drive them to this day.

At that point the only debt we carried was our home mortgage.

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We used visual tools to stay motivated

Inspired by how quickly we could pay off our other debts, we decided to see if we could pay off our mortgage. Before shifting to this new goal, I maxed out my retirement plan at work to take advantage of compound interest. Once we adjusted for the change of retirement contributions, we made the decision to try and pay off our home.

I am very visually motivated, so we came up with a visual aid to remind us of our progress and our goal. We placed a glass jar on our kitchen countertop and filled it with marbles. Each marble represented $1,000 we owed on our mortgage. At the end of every month, we would see how much we had paid off and would remove the marbles based on how much we paid on our mortgage over the month.

Every day I would walk past that glass jar or sit next to it when I ate breakfast or dinner. It was a constant reminder and something I needed to stay motivated. Because we had no additional debt at that point, including vehicle payments, we could put a minimum of an extra $2,000 towards the mortgage each month. 

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We built a community to help us move forward 

In 2013, when we started paying down our mortgage it was $160,000. We were able to finally pay it off in June of 2020. 

The amount of freedom that comes with being debt-free is a feeling that is hard to put into words. But I have been able to chronicle our journey with a financial blog I started in September of 2018 called Arrest Your Debt. It has been gratifying during this process to use the lessons I learned to help other people become debt-free, even on one income. 

On the other side of achieving this goal, my wife and I are still amazed at what we've been able to accomplish. We're 36 years old, and the only ones in our group of friends without a mortgage or debt. There were days during those seven years that we felt like our goal was impossible.

But by budgeting, along with finding ways to bring in additional income each month, we were able to achieve these financial results on a single income, supporting our family of five. I've found that when you stay focused and refuse to give up on your goals, things that seem impossible quickly become possible. 

Ryan Luke is a father of three, husband, financial coach, and full-time police lieutenant. His story about his struggle to make ends meet, to paying off his home in less than 10 years, has been featured on MarketWatch, Fox Business, MSN, and other media outlets. He currently blogs at Arrest Your Debt as a way to help others get out of debt and start building wealth.

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