Through planning, budgeting and open dialogue, one Maryland-based Air Force couple is well on their way to paying off more than $89,000 in debt. If all goes according to plan, it will have taken Air Force Senior Master Sgt. John Dixon and his wife, Kathy, six years to emerge debt-free.
Early in their marriage and in their 20s, the couple found themselves living paycheck to paycheck. Between Friday night margaritas or random Starbucks runs, Dixon says she and her husband didn’t maintain a budget and weren’t looking at any patterns in their spending other than living in the moment.
New cars, student loans and family medical debt all compounded over time and simmered on a back burner in their lives. “It’s funny how something that wasn’t the biggest issue in our marriage, ended up being the biggest blessing long term,” she said.
It wasn’t until an Air Force colleague they knew through church recommended Dave Ramsey’s 7 Baby Steps financial program that things began to change. Taking a deep dive analysis into their financial situation was eye-opening.
“It forced us to have honest conversations about our money,” she said.
Dixon admits that she panicked when she saw how much they actually owed. The couple came up with a budget and realized how much they were spending on certain items, such as nearly $1,000 a month eating out.
“We had no idea what was normal until we went through this exercise,” Dixon said.
Read: Enlisted family pays of $60,000 in debt (and you can, too)
By creating a zero dollar budget, a budget where income minus expenses equals zero, Dixon says that she and her husband became more accountable than ever before.
“There’s no freebee money. We determined what is an appropriate amount for each category of spending and saving, and stuck with it.”
Dixon says that couples who embark on a journey of financial freedom, first and foremost, need to just stay the course. “Keep on the path of imperfect progress.”
In her opinion, it’s easy to get discouraged. In 2018, the couple’s oldest son, who was four at the time, needed an extremely complicated emergency open-heart surgery. The total bill from the surgery was expected to be $160,000, and after insurance, they expected their portion to range from $15,000 to $35,000.
“At that point, we had paid off $35,000 of our debt in the process and this came as devastating news on so many fronts,” Dixon said. In the end, their son fully recovered and the couple ended up with only a $1,600 bill. “Imagine if we had been discouraged and said ‘we quit,’ and didn’t keep saving,” Dixon said.
She stresses that there’s no magic answer to erasing debt. “The only magic is just staying the course even when you don’t feel like it.”
Dixon has three top tips for young couples looking to tackle debt:
- If you’re a couple and your partner is not yet on board, Dixon recommends starting with your own portion of budgeting. “Don’t let this be the reason you don’t start taking control of your finances,” she said.
- Simplicity is key in terms of paying off debt. Dixon says that Dave Ramsey’s program was perfect for her family but there are plenty of similar options available. Military OneSource is a great place to start.
- Her last recommendation is to find a community, friends, family or faith, that will provide encouragement in the process.
For Dixon, debt has so many more implications than money just coming in and out of your bank. It boils down to freedom and clarity. As of press time, the couple has paid off $70,000 and expects to be debt-free within the next two years.
“The freedom we feel living within our means is liberating. . . Just imagine what we are able to do when this is over,” Dixon concluded.
