How This Single-Income Family Found Financial Freedom in Just 27 Months

By Alaina Tweddale on 27 January 2015 4 comments

When their second child was born, the Fobes family had almost no disposable income and were $37,000 in debt. Tracie Fobes had recently lost her part-time, work-from-home income, and the couple was struggling to make ends meet on their one full-time salary.

The Fobes juggled their bills for four months post-baby before they realized something had to change. "We were living paycheck to paycheck," says Tracie. "Money was tight and we were stressed. We were trying to figure out how to make ends meet but we were getting nowhere fast. It was really bad." They weren't sure how they were going to manage long-term when a family friend told the Fobes about the Dave Ramsey method and get-out-of-debt due date they'd set for themselves. "They were doing it successfully on one income," says Tracie. "That's what got me thinking that maybe we could do it, too."

Using a Roadmap to Chip Away at Their Debt

After that fateful dinner, the Fobes spent the following three days reading as many Dave Ramsey books as they could get their hands on. "We felt like we had an answer and a way we could actually do this," she says. "We felt like we finally found a solution to our problem."

The first step the Fobes took was to create an in-depth budget. "The first time we [wrote out our budget], we both wanted to throw up, it was so bad," laughed Tracie. "But we buckled down and realized we had no one to blame but ourselves. We changed our money attitude and moved forward."

The budget helped the Fobes realize where they were overspending and where they needed to cut back. Grocery costs were way too high, they realized, so Tracie set to work learning how to meal plan and use coupons to slash food costs. Tracie would plan her family's weekly meals around what was on sale that week at the supermarket and what coupons were in her Sunday newspaper supplement. She also became efficient about using what was already in her pantry. "It became a goal to pay as little out of pocket at the store as I could," she says. In one year alone, Tracie saved $6,000 just by menu planning and couponing.

Then, there were the restaurant meals. "We were also spending a lot to go out to eat," Tracie says, admitting to their three time a week habit. "If you eat out eight to 10 times per month and it costs $20 per adult, that's over $4,000," she explains. "When you sit down and do the math, you realize how sickening it is." So, they slashed their restaurant budget and reallocated those funds toward paying down their debt.

Like most Americans, the Fobes had plenty of stuff around the house that they didn't actually use. "We did an assessment of our wants versus needs," Tracie says. "We had all this furniture that we were storing for a home remodel that we knew wouldn't happen for at least 10 years. We realized that we wanted the furniture but what we needed was to get out of debt." Cleaning out the house raised $3,000, which went directly toward paying down their debt. "It was a nice way to clean out the house," Tracie says. "We got rid of a lot of junk. It was liberating. We didn't realize how much all that stuff was weighing us down."

Staying the Course

It can be hard to maintain frugality for as long as it takes to pay off a hefty debt burden. Tracie's healthy attitude helped her stay on target. "We didn't get into debt in two months," she says. "It takes a long time to pay it off. You have to be patient and stick to it. You have to not give up."

In addition to spending cuts, The Fobes also took any unaccounted for money and put it toward lowering their debts. There were income tax returns, but there was also a new income stream: Tracie had wanted to share her newfound saving strategies with others, so she started blogging about her journey at Penny Pinchin' Mom. The blog was a hobby at first, but over time it grew into a substantial income source.

"My first monthly revenue check for the blog was for $65," she says. "We made $1,000 in the first year but it went up from there." In year two her blog earned $23,000 and then $38,000 in year three. "The extra income really helped. It felt like free money, so we just used it to pay down the debt," she says. "In the end, we paid off $37,000 in just 27 months."

The Final Stretch

In 18–24 months, the Fobes will pay off their last remaining debt — their mortgage. "Having financial freedom is like no other feeling in the world," Tracie says. "Our money is our money now. We decide how to spend it."

For others looking to start their own get-out-of-debt journey, Fobes suggests leveraging a personal passion to build a side income. "Photographers can take family photos, writers can freelance," she says. "Many people also do well with multi-level marketing companies because the work can be done in the evening, after traditional work hours." Blogging worked for Tracie, but there are many different paths to follow.

Now that the Fobes have a comfortable disposable income, they use it to spend time as family. "We do fun things on the weekends and we don't think much about the cost of event tickets," she says. They go on vacation with the kids. They work on home remodeling projects. "It's amazing," she says. "When people ask what's stressing me out, our budget and finances never come to the top of the list."

Do you have plans to cut expenses or boost income this year? What strategies do you have in mind for your own debt elimination journey? We want to hear about it in the comments below.

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Guest's picture
Guest

So a big part of how a single income family can get out of debt is to not be a single income family anymore... I'm not sure the headline on here adequately represents their situation.

Guest's picture

I hear you on the patience.... Getting debt-free takes a while. We're hoping to pay off the house in 2020, turning a 30-year mortgage into an 11 year-mortgage. But oh that mortgage amount seems to just inch downward!

Frugality works slowly, but some aspects are actually fun, like learning new DIY skills, making instead of buying, and finding fun, cheap entertainment.

Frugality is also often healthier -- walking or biking instead of driving, gardening, and doing your own cooking are all both cheaper and better for you.

Guest's picture
Olivia

We invariably compare our situation with another's when reading an article like this. Hoping for something we can put into practice. But our situations have many more variables. We don't even know how much her husband earns, or basic costs where they live. Saving $6000 a year on groceries is not encouraging to someone only spending $4000 a year.

We're not unhappy they are getting out of debt, that's a great thing, but this kind of article is not useful. Unless it's to say budgeting, meal planning and side gigs, (if they are wildly successful), work.

Show me a family who makes the median U.S. household income of $50,000 a year or less and how they manage to provide for their family. Break that down into action steps. That would be useful.

Guest's picture
Keesha

Olivia, I completely agree. It seems like if you're already cutting back, the only way to get out of debt is to increase income