The Great Recession (2007-2009) caused higher levels of unemployment, plummeting real estate values and a lot of people to feel uneasy about their financial situation. Many parts of the United States were hit hard during this financial crisis, especially my home town of metro Detroit.
Today, I talk with Christin McKamey, a fellow metro Detroiter and the blogger behind Veggie Chick. We discuss how the Great Recession affected her and her husband Robert financially and emotionally. At one point, Christin found herself in nearly six-figures of debt with no job prospects. Her drive to improve her financial situation helped her to eliminate her debt and eventually become mortgage-free.
We chat about her and her husband’s financial past and upbringing, how she earned extra money to get rid of her debt and what they will do with their money now that they are mortgage-free.
A Background of Financial Hardship
Christin and Robert are no strangers to financial difficulty.
Robert and his family grew up in Detroit and were supported by government assistance. After his first marriage, he lost everything and was $45,000 in debt and ended up living in his friend's basement.
Christin moved to Hawaii at the age of 22 and then moved back to her home town of Detroit during a difficult time: the financial crisis. She had a master's degree and a bachelor's, but still had difficulty finding a job.
With $75,000 in student loans and soaring credit card debt, Christin did what she could to make money by babysitting and teaching on the side. This rough time in her life really changed the way she thought about money.
Robert and Christin met in 2009, and although he was in a better financial position than Christin, they managed to work on their debt together. She eventually got a good job and started making a higher income.
Baby Steps to Eliminate the Debt
She discovered Dave Ramsey and The Total Money Makeover and immediately started implementing the baby steps. She learned the importance of paying herself first and started paying off her student loans.
Christin started by paying off the lowest balance first – this gave her the confidence to get to the next step. Once she started making $40,000-$45,000 with her new job, she was able to chip away at her student loan debt.
To pay off more of her loan balance, Christin started doing some photography as a side hustle. She understood that she needed larger payments to get rid of the loans, and $50 here and there wouldn’t cut it. By shooting weddings on the weekends she was able to make a lot more and she started contributing thousands of dollars to her loans. Her husband also had a scrappy mentality and would take freelance projects here and there to make extra money.
Combating Lifestyle Inflation to Become Mortgage Free
Christin soon got a better job that doubled her salary. With this extra money, she was able to focus on the mortgage of the house they lived in. Her husband had bought the house 7-8 years before and although he was doing well, she wanted to contribute to the payments.
When her salary doubled, she didn’t adjust her lifestyle. She didn’t have a car and she kept her expenses low. Also, she bought a house in Hawaii and after selling it, was able to use the profit to get rid of more mortgage principal.
Thanks to her increased income, low expenses, and determination, her debts were decreasing fast.
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Living with Separate Finances But Combined Goals
Christin and Robert keep their finances separate. They have a bit of a unique situation since Robert was at a different stage in life and had a daughter and house when they met. However, they have the same goals and work on them together. Now that Christin is making a good income, they can split pretty much everything equally.
She uses the example of their project of renovating the kitchen: she paid 75% of the project because she was the one who wanted more and had specific ideas of what she wanted. They've agreed that if one were to stay home while the other works, then they would combine finances.
Related Interview: The Benefits of Keeping Separate Accounts in Marriage – with Aditi Shekar
The Mortgage Elimination Process
Christin understood how important it was to save money and pay off as much of the mortgage as possible. To her, the mortgage was more important than lifestyle inflation.
The original principal on Robert’s house was $170,000. When they started paying it off together, the principal was down to $140,000. After Christin sold her Hawaii property, it went further down to $90,000. Three years later, the mortgage was completely paid off!
At that time, they had a combined income of $200,000+ with Robert making a six-figure income as a photographer and Christin working in digital media and marketing.
Do they have any regrets of not putting that money in the stock market? Christin says no. They badly wanted to get rid of that huge monthly payment and they wanted to feel like they owned their property. It was an emotional decision that they were happy to take. After the experiences they had in their financial past, it makes a lot of sense
What They are Doing With Their Money Now
Now that they don’t have a mortgage, what do they do? They got into real estate investing. Robert bought another house in 2011 for $37,000, and Christin bought herself another property for $46,000. Both properties have now appreciated to above $100,000!
With all their real estate buying and selling, they now have $100,000 left on a commercial building which they’re thinking of turning into a salon.
In terms of fun, Christin and Robert love traveling. They go to Hawaii every year, they love to travel during the winter and are constantly looking for places to invest in.
Related Interview: How I Took My Salary from 5-Figures to 6-Figures in 7 Steps
Christin's Advice For Others
Christin understands that being neck-deep in debt can make someone feel hopeless. But she says that it’s the little consistencies every month that make the difference. It helps to be obsessive – she checks her budget every day to make sure she keeps on track.
The number one thing is to make the debt repayment a priority. Forget about the Joneses’ and keep looking at the end goal.
We all go through tough periods of our lives when the end doesn’t seem close, especially when it comes to a huge mountain of debt. Christin was able to take inspiration from a difficult time during the Great Recession and used that to get rid of her student loan debt, home mortgage and become a real estate investor as well.
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Are you trying to pay off your mortgage? What strategies are you using?
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