With its extremely high cost, it can be difficult to know how to pay for adoption without debt.
Amanda and Jonathan Teixeira went through the adoption process three times and ended up paying nearly $100,000 in total. But they did all three adoptions without debt.
Here's how they did it.
In May 2010, I married my dream girl. She was funny, beautiful and chock-full of 90's TV trivia. Our first couple of dates consisted of a lot of Saved by the Bell and Seinfeld jokes.
Outside of knowing the Soup Nazi episode verbatim, Nicole and I both came into the marriage knowing the general basics of personal finance. You know, advice like:
In the years before our marriage, we did rack up a hefty amount of "good" debt. Car payments and student loans were a few of the good debt offenders we carried into our marriage. Hey, you NEED a car to get around, right?! And how else are you going to pay for college?!
After some research and personal soul-searching, there really was no good debt or bad debt in our eyes. It was just debt to us. This was all just money we owed someone. It wouldn’t go away until we decided to clean it up.
We decided that being in debt was not something we wanted for our new family. We vowed to become debt-free (outside of our mortgage) before our first child was born.
In September of 2010, we owed $20,908 on my wife’s car and $27,124 on my student loans for a grand total of $48,032 of good/bad/indifferent debt. During the next 12 months, we took that $48,032 of debt and clobbered it!
By September 2011, we owed $0. Zilch. Nada. Bye-bye debt.
Here are the 5 steps we took to rid debt from our family forever:
We developed a monthly written budget that defined our way forward. We knew we had to reduce our expenses and increase our debt payments. The written budget guided us to ensure we would stay the course.
For budgeting, we used a simple spreadsheet. It wasn't too fancy. We just listed out our income and our expenses and made sure we allocated each of our dollars to an assignment.
As the years past, we decided to upgrade to Mint. This online budgeting tool gave us more flexibility and made the monthly budgeting process a lot quicker through its ability to link up to your bank and credit card accounts.
I developed a simple 10-step guide to get started on Mint.
(For couples, consider checking out Zeta. This is another free budgeting option that will help you win together.)
Good old fashioned pencil and paper will even do! Make sure you have a budget and stick to it.
There are multiple debt elimination strategies to consider. Choose the one that works best for you and your situation.
How it works:
Debt Snowball Example:
Why the Debt Snowball works:
How it works?
Debt Avalanche Example:
Why the Debt Avalanche works:
You can also look at using a Hybrid Model of these two approaches where you pay off the debt with the largest interest percentage first, and then get some quick wins on the debt with the smallest balance.
Or simply just choose the debt that you HATE the most and smash that one first!
We chose the Debt Avalanche method because our student loan and car debts amounts were nearly similar. The student loan had an interest rate of 6.8% so we decided to blow that one up as soon as possible and then tackle the car loan. If the student loan refinancing companies like SoFi were around then, I definitely would have taken advantage of that for a lower interest rate (and even a cash bonus!)
Outside of spending less money, another great way to eliminate your debt fast is to make more money!
Before we decided to go crazy on our debt, I received a promotion to a sales position that allowed me to make a commission when I brought in new business. At that time I was making around $70,000 per year without commissions. When Nicole and I decided to rid ourselves of our debt, let’s just say, I became highly motivated to sell … a lot.
I expanded our portfolio with a major client and doubled our business in 2011. Our business grew, my team grew and so did my commission checks. I ended 2011 with just over $100,000 in total income!
With that additional income, we did not adjust our lifestyle and buy new clothes, fancy dinners, and jewelry. We took the extra money we received each month and slowly but surely paid down our debt using the Debt Avalanche.
Now you may not be in a sales job like I was, but increasing your income is completely in your hands. It just takes extra effort.
Here are 10 ideas for increasing your income immediately. I’ve done 5 of these personally:
Related Article: 26 Smart Ways for Moms and Dads to Make More Money
It is incredibly easy to stray away from your budget and your debt elimination strategy. There are always shiny objects that will distract you and take you off course.
Although I consider myself a frugal and disciplined guy, I had a tough time not spending the extra commission dollars I was receiving at my job. I’m human, right?
To help me stay on track, my wife and I would remind ourselves that being debt-free before our first child came into the world would set our family on a course for financial success that would last our entire lives.
That reason for pushing hard (my “Why”) gave me the motivation to stick to the plan. I kept thinking about how SATISFYING it would feel to rid ourselves completely of this debt.
We’re not robots. Live a little! When you pay off one of your debts, celebrate!! Go out to dinner. Pop some champagne. Share the news with family and friends. This is a BIG deal. You are NOT normal (in a good way)! This encouragement will motivate you to keep charging down the path toward complete financial freedom.
Nicole and I celebrated each debt crushing milestone together and it made our new marriage that much stronger. We were partnering together on something so important for our future and we were winning.
That year of debt destruction allowed us to have Nicole leave her job and stay home to raise our kids. You can't put a price tag on the bond she's developed with Zoey and Calvin during the first years of their lives.
Fast forward to today, we've kept up our debt elimination plans and have paid off our $195,000 mortgage in less than 4 years. That major reduction in our expenses has allowed both me and Nicole to choose the work we want to do instead of the work we have to do.
At this rate, we’re creating a financial future for our two children that we would never have imagined possible. And to think, it all started with taking that first step in making the conscious decision to eliminate our debt once and for all. Now we have the freedom to live the lives we’ve always wanted.
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"Believe you can and you're halfway there."
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