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Back in 2008, Brad Chaffee and his wife were $26,076.75 in debt when they decided to pay it off and forsake all future loans.They’re now living debt-free with their three children in Charlottesville, Va., and hope to put 100 per cent down on a house.
Chaffee’s wife works part-time as a nurse and a top eBay seller, while Chaffee is building a T-shirt printing business and blogs about debt-free living at EnemyofDebt.com. Recently, they’ve both become health coaches.
U.S. News chatted with Chaffee about the sacrifices his family made along the way and why he’s so determined to stay out of debt. Excerpts:
When and why did you get serious about paying off your debt?
In 2007, I reread The Total Money Makeover by Dave Ramsey and it just pumped me up, made me realise that now was the time.
In the beginning, my wife and I struggled a bit to get on the same page. My wife was in nursing school and was really focused on that while I was the one reading the books and eventually completed [Dave Ramsey’s] Financial Peace University. I was a little more hard-core about how I wanted to do it, but she wasn’t quite ready for all that.
I became aware of the fact that I was being forceful when she hadn’t yet had the time to hear why we should do it my way. I was just a bit too excited and couldn’t comprehend why anyone wouldn’t be on board. So I backed off, realising that I was being a jerk about it. I decided to let our progress bring her to where I was at the time, which was absolutely excited!
Then what she wasn’t willing to get rid of and sell suddenly became listed on either eBay or Craigslist. Watching the debt disappear motivated her and that’s when we realised that we had to work on our communication and teamwork. Once we did that, we were high-speed locomotives on our way to debt freedom.
How long did that take?
It took us about 20 months but the first two months, January and February, we saved an emergency fund like Dave Ramsey suggests. We actually saved $2,000 instead of one because that made my wife feel more comfortable. It took us two months to save up $2,000 and then 18 months to pay off about $26,000.
What were some of the steps you took to get out of debt?
We kind of did it the hard way. I think a lot of people don’t really want to do it the way we did it, but we cut a lot out. We almost became minimalists in a way. At the time, we really wanted to get out of debt, so we were pretty extreme in what we did.
We sold our $8,000 car so we were able to knock that big chunk out pretty quickly.
We sold stuff, we had yard sales. My wife is a big eBay fanatic, so she actually still does this stuff but we got a little more serious about eBay. To this day, my wife and I look back at that experience and we think, gosh, we learned so much and that whole debt-free journey changed us completely.
What were the hardest things to give up?
I’ve always been an avid gamer and I had an Xbox 360 and a bunch of games so I sold that and, of course, we got rid of our flat-screen television. That was hard for me, but I’d have to say that the car was probably the hardest. We didn’t know what we were going to be facing once we sold that car that was so reliable for us. I ended up replacing it with an older car that looked like it came out of a junkyard. It was a crazy time for us, but we just decided to go and do it.
According to your blog, you’re planning to buy a house without taking out a mortgage. How’s that going?
We’ve had two houses since we’ve been married. We had that first house and we ended up making mistakes because we didn’t know how to manage our money, we didn’t know the implications of refinancing and spending your equity. We ended up doing OK, but not as good as we could have done. When we sold it, we did buy a second house and that one was the one that really kind of started to sink us a little bit. The second house, we got an 80/20 mortgage, interest only, nothing down. It was just stupid.
This was before our journey to debt freedom. We had a stupid mortgage and I couldn’t wait to get out from under that and we eventually sold that house and now we are renting happily until we save up to buy a house. It’s rather extreme for most people, but we feel like we’re going to be able to prove to some people that it can be done. It just takes a little work.
What do you think is a realistic timeline?
We’re still actually building our six-month emergency fund, so our goal is to have about $10,000 to $15,000. We’re in the process of doing that. We just don’t have as much money to do it as we used to, when we both worked.
We thought we were going to be able to do it by 2014 and then it was 2015 … But another thing is, we didn’t want to sacrifice the time with our kids. That’s always been the most important thing to us, which is why both of us aren’t working.
We really believe that us raising our kids is better for them then putting them in a daycare. Even though there are good daycares out there, we just feel like we want to do it ourselves. My wife going down to part-time was a strategic move because we wanted her to be able to experience that, too.
It’s all happening, just a little slower than we expected it. But now that we’ve experienced what we’ve experienced with no debt, we don’t have to make as much money to pay our bills and we don’t want to go back to working two jobs and never seeing our kids.
Some say that certain kinds of debt aren’t bad. For instance, taking out student loans to further your education and boost your earning potential. What do you say to that?
Well, the first thing I would say to that is be a student graduating in the last two to three years who has racked up all that student loan debt, and then say the same thing. There are a lot of students that are really struggling. Owing someone is owing someone regardless of how you look at it.
I don’t look down on student loans for some things. Doctors, for instance—if none of them got student loans, then we’d probably have a shortage of doctors. But they’re also in high demand, so if you go to school to be a doctor, then you’re most likely going to be able to make money.
You can get an education without going into debt for it. I’ve taken classes and I’m having to do it at a much slower pace than some people, but I feel like if you can’t afford something, then you shouldn’t do it. If you have to go into debt to do it, then maybe you should look for an alternative.