If you’re fighting to pay down debt, you’re not alone. The average American has $90,460, according to a 2021 CNBC report, from a range of sources including student loans and mortgages. And, Experian found the overall debt balance grew in the U.S. at the highest rate in 10 years.
But the news isn’t all doom and gloom. Military families have proved it is possible to pay down balances by relying on purpose and a plan.
Total debt success
A home loan is typically the largest debt military families carry. Active-duty Army spouse Vanessa Witts and her husband reached debt success by paying off their $230,000 mortgage in five years.
Paying off a mortgage is no easy task, let alone doing so in five years.
“We wanted the flexibility that came from being debt-free,” Witts said.
They also wanted to free up the money they were spending on mortgage payments to put toward “better-paying investments.”
Angie Kiser, a retired Army veteran, and her active-duty husband paid off $130,000 in debt, including four auto loans totaling $100,000 and a $30,000 adoption loan for their son.
When it came to the adoption loan, Kiser said they didn’t anticipate taking on debt to adopt their son.
“It was a debt we did not expect to have and worked diligently and sacrificed to pay it off early,” she said.
How to pay off debt
Hearing the amount of debt they paid off is great, but the real question is, “How did they do it?”
In Kiser’s case, they set goals to cut expenses in order to have more money to put toward debt payments. They only ate out twice per month, and when Tom deployed, all the extra tax savings went to debt payments.
Also, having two incomes gave them additional funds to pay down debt.
“Each time we freed up money from either a car loan or a credit card, that extra ‘bill’ money would go directly on the adoption loan,” Kiser said.
But they also took the extra money they received — no matter how small — to pay off their loans. Money from tax returns and pay raises eventually added up to the total payback of what they had borrowed.
Witts and her husband also used two incomes to their debt advantage.
“Having a dual income has allowed us to meet our financial goals more easily than if we lived on my husband’s salary alone,” she said.
Like Kiser, the Witts also put any additional financial “windfalls,” like extra deployment money, toward their mortgage. They also credited living in low-cost areas like North Carolina to help pay off their mortgage faster because their expenses were lower.
Benefits of paying off debt
For Kiser and Witt, paying off debt came with some added benefits.
Kiser said paying off their adoption loan brought “relief and closure.” And Witt said after selling their home, they were “able to invest the full amount of the sale proceeds” and had money to fund current priorities, like saving for their retirement and children’s education.
Getting out of debt and finding financial success is possible. And it can bring added quality of life benefits. You just have to set the intention, make a plan and stick to it.
Want more financial readiness tips? Download our complimentary 2021 Military Money Guide.
