Back in 2010, my husband and I got married with a hefty debt of over $45,000 hanging over us. Given our average salaries and my husband earning just slightly more than minimum wage, owning a home in one of the most expensive real estate markets seemed impossible. Fast forward six years, and we now own a two-bedroom house worth over half a million dollars, with no debt in sight. You might wonder how we did it – we took it step by step.
At times, giving up seemed like the easiest option given our overwhelming debt. But instead of surrendering, we tackled our financial challenges gradually. We started by focusing on my car loan with a monthly payment of $434. Each month, we paid as much as we could until, after more than a year, we finally paid it off. This freed up extra funds, which we then used to pay off other debts.
Next, we turned our attention to my student loans, starting with the smaller ones and gradually working our way up to the larger ones, celebrating each small victory along the way. Once we were free from debt, we began saving money for our dream home. By addressing our financial challenges little by little, our dream of owning a home became achievable.
When we first got married, we were living in a fancy neighborhood, well beyond our means. To save money, we moved into a simple studio apartment once our lease ended. Living modestly for about a year and a half significantly sped up our debt repayment.
As our income improved, we moved into a townhome. However, we still kept our living costs low and stuck to a strict budget. Staying financially disciplined, despite many sacrifices, was tough, but keeping our eyes on the bigger picture kept us focused.
All along, owning our dream house was our main goal. Though it was tempting to spend our savings on lavish vacations, the dream of owning a home was stronger. Once we had enough savings for a down payment, we started house hunting. The bank pre-approved us for a larger loan than we were comfortable with. So, we chose a modest two-bedroom home in a friendly neighborhood. This decision stretched our budget, but it proved to be the right one.
Now, we proudly own a home and our financial security is solid. Reflecting on our journey from being in debt to becoming homeowners, I’m amazed by how far we’ve come in such a short time. When people ask how we achieved this transformation, I always tell them: one step at a time.
Are you on a similar path to homeownership and aiming to clear your debt first? How do you stay motivated despite the challenges?