In a previous post, Calculating Your Magic Number, I wrote about how my husband and I live on one income and bank the other. We’ve been doing this from the beginning, and it’s become second nature to us.
When it comes to paying off debt, we do a modified snowball method. Minimums are paid from one paycheck, so we stay on course. In the savings account, in the meantime, we save up $5000.00 at a time and throw that chunk at the debt when we have it. This method has worked well for us.
We’re currently, debt-free except for the house, and once the annual savings goals (retirement, travel, and house expenses) are complete, the next $5000.00 saved will be thrown at our mortgage.
Having started our married life by only living on one income and banking the other has allowed us to chip away at financial goals steadily. I encourage everyone to look at your lifestyle and see if it’s possible to cut back enough to do this as well. I have a friend who plans on being a stay at home mom when they start a family. They were barely making on both their incomes. Once they became debt-free, I encouraged her to see if they could work on trying to live on one income NOW before they started a family, because if they can’t do it now, it’ll be much harder once a child is in the picture.
There are multiple resources out there giving advice on how to pay off debt. We did a modified version of the Dave Ramsey system. I recommend it over other systems out there. Modified or not, this system has helped millions of people.
*Not a paid spokesperson or affiliated with Dave Ramsey and Ramsey Solutions in any way.*