"We Got Out of Debt"

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Couple who Paid Off Entire Mortgage

We paid off $65,000 -- including our mortgage

Nanci Singleton, 50, is a stay-at-home mom, and her husband, Charles, 56, is an information technology manager. They have a 9-year-old son, Javan. The Singletons' household income is about $67,000.

The Debt-Free Challenge

"I've never liked owing anybody anything. It bothers me to pay interest because it means I'm paying more for something than it really costs. My husband and I never had any consumer debt -- and never plan to. The only money we owed was what most people consider acceptable debt: $16,000 in car loans and a $54,000 mortgage. But even that bothered me. It stresses me out to think about owing anything. And I was worried about the state of the economy. So I decided we would pay off those loans in full."

Redefining Wealth

"My husband and I were missionaries in Ghana for 12 years. We weren't the type of Americans who lived like kings on a U.S. salary in a developing nation. We managed on the same allowance as our Ghanaian colleagues did -- under $30 a month. That meant we had to think about every penny. I mean, we couldn't even go out and buy an ice cream cone. We'd have to save up money just to invite friends over for dinner. You get a different perspective on consumerism when you live in a place that has so few material things. So now I know that I can be happy living on relatively little."

"No Spend" Days

"I was very systematic about how we could eliminate all our debt. I created a spreadsheet with all of our expenses on it, including fixed costs like housing and utilities as well as our discretionary spending. I decided that one way to save a lot of money would be to have 'no spend' days.

"Here's how it works: First you figure out your discretionary expenses -- not essentials like the mortgage and utilities, but money you spend on things that aren't necessities. Let's say your basic living expenses come to $3,600 a month and $1,200 of that is discretionary spending. Then you divide that number by the 30 days in the month and figure you've got $40 a day for nonessentials. So the trick is to not spend for a day or two each week, and immediately put that $40 or $80 or whatever it is toward your debt."

Financial Security

"Once you get into the habit, cutting back like this gets easier and easier. I think my record was 15 'no spend' days in a single month. Also, by making a commitment to reduce your spending, you drive less, spend less on gas -- and you are less likely to give in to impulse purchases. And that makes it easier to save more money.

"We don't feel deprived. In fact, our lives feel very rich. Because our mortgage is paid off, we were able to save for a down payment on another house -- a foreclosure -- which we closed on this spring. We've moved and are renting out our original house, so we have an additional income stream. It's amazing what you can do when you have no debt."


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