my two cents

‘How We Paid Off $200,000 in Debt in 5 Years’

Photo-Illustration: The Cut; Photo: Phyllis Iller

Julien and Kiersten Saunders, 41 and 37, quit their corporate jobs a few years ago after they became debt-free. They didn’t inherit millions or win the lottery; instead, they saved aggressively, lived frugally, and invested carefully with their eye on one goal: gaining control of their time and money. 

Of course, it also helped that their salaries were high (in the six figures, respectively) and that they still work independently. Together, they run an award-winning blog about personal finance, Rich & Regular, and this week published their first book, Cashing Out: Win the Wealth Game by Walking Away. It’s part memoir about how they paid off $200,000 in mortgage and car debt in five years, and part rallying cry for other “regular folks” to follow their lead and make a financial plan. 

The couple knows that this is easier said than done, and they don’t expect others to replicate their process exactly. They also enjoy life — they love to go out to eat near their home in Atlanta, and enjoy the occasional vacation with their 5-year-old son. So how did they get to this point? Here, they share tips on saving money, dealing with social pressure to spend, and working as a team to get out of debt.

What made you decide, as a couple, that you were going to be really aggressive about saving money?

Kiersten: What kicked it up a notch from just being good with money to having a totally different plan was going to South Africa for two weeks on our honeymoon and immersing ourselves in a completely different environment. Once we unplugged from the consumerism of the United States, we realized how far we had gone from who our true selves were. We asked ourselves, “What is the point of all this? How do we actually want to spend our time? What does an ideal day, week, year look like?”

Julien: It was a wake-up call for us. Even though we’d promised to disconnect from work during our honeymoon, we kept checking our phones. We were addicted to our jobs. Not being able to even keep that commitment to ourselves was alarming and scary for us. We figured that we needed to find the way out.

Kiersten: It’s like when people go meatless for a month or do a detox and they’re like, “Oh, my God. I don’t know that I can go back to that. I didn’t realize how far off from equilibrium I had gotten.”

It’s hard to get on the same page about money with a partner. What are some of your differences?

Julien: I think our first conversation about money was the very first disagreement that we had. It mostly highlighted the differences in our experiences growing up. I had seen some of Kiersten’s spending habits and almost took offense at how wasteful she appeared to be, in my mind. It just seemed like there was a huge, fundamental disconnect between how we each viewed money. But our argument forced me to think about why I had such extreme points of view, particularly on debt. A lot of it had to do with how I grew up and how little we had. That poverty mind-set lingered and impacted the way that I viewed money and even, in that case, a potential life partner. I still struggle with that. It’s not something that having more money frees you from. But I have learned to ask myself, “What else might I be missing out on if I continue to allow my past to dictate my life?”

Kiersten: My view of money was the exact opposite. I did not have generational debt or trauma, but what I did have was that endless American optimism. I assumed, like most people, that I would always be making more money in the future. So my plan was just to outearn my spending habits. It was very YOLO and naïve. It took Julien, who had been exposed to more and different hardships than me, to say, “All right, let’s test your theory. Let’s pull up all of the org charts of these companies that you think you can work for, and see how many people who look like you are in the pictures.”

Confronting that uncomfortable truth was what woke me up and shook my plan. I had just assumed I would be the exception or the first. And he was the first person who I trusted and who knew me well enough to say, “Maybe you should come up with an alternative plan, just in case historical trends continue.”

How did you get on the same page?

Kiersten: Well, one important thing is that our relationship was healthy. A lot of people believe that when there is money conflict, it’s an indicator of the health of your relationship, particularly when you have bad fights like the ones that we did. Our first conversation about credit-card debt led to a breakup. But that argument was sort of like a little kid learning how to ride their bike. If they do something reckless and fall, it doesn’t prevent them from going again. They just know not to go that far the next time.

What we did was start to come up with little systems to pump the brakes. For example, we put time boundaries around the conversation and made it very specific to one topic. Financial concepts are so intertwined with other issues that it’s easy to go down a side street and start discussing another conflict. We will call an ELMO if we find ourselves going down the wrong path. ELMO is an acronym for “Enough, Let’s Move On.” We also have a safe word. It’s “donuts,” and it indicates that that’s enough — we need to pause the conversation. When I feel myself getting emotional, I’ll just be like, “You know what? Donuts. We’ll come back to this.”

Another favorite is, “Tell me more.” I had gotten used to making excuses for my money and using empty phrases like, “We’ll figure it out,” or “It is what it is.” And Julien would be like, “No, tell me more. Why do you think that?” It’s just an invitation to keep the conversation going instead of dismissing it.

In your book, you write about how you paid off over $200,000 in debt by cutting your costs on the “big three” — food, housing, and transportation. Can you tell me about some of the specific ways that you saved money in these areas? How did you manage to do it and still live your lives?

Julien: I have a culinary background, so focusing on food came really easily to me. There was a lot of cooking at home. Like, even if we were going out to dinner, maybe I’d make us an appetizer before we left so we’d spend less at the restaurant, or we’d agree not to have dessert while we were there and have it at home instead.

Another big one had to do with cars. It was really just a commitment to not follow the crowd. Even though I could afford more, I still kept driving a 2006 Honda. I was less concerned about how the car made me feel and more concerned about what it allowed me to do, and the big thing with that was it allowed us to increase our savings rate and pay down our mortgage.

Kiersten: I had already bought my luxury car, so I was stuck with it, but what I focused on is the total cost of ownership. I couldn’t do much about the car note, but I could change my insurance to a local company that didn’t come with nearly as many bells and whistles, but could give me a lower premium. I also started going to local mechanics that didn’t have the flashiness of a free car wash and complimentary coffee, but could perform the same tune-up services at a significant discount.

Overall, we were just really creative, and we kept a mantra in mind that every time we paid off debt, it was like giving ourselves a raise. And when we compared that to what it took to get a raise in the workplace, it was far easier, frictionless, and empowering in the sense that we could control it, and it put money directly into our pockets.

How did you keep yourselves from feeling deprived while you were saving so aggressively?

Julien: I remember feeling deprived of nicer living accommodations. There was a persistent leak in our old home and it was such a source of stress because it was coming through the foundation. Every time it rained, the carpet in our living room would get soggy, and I would just throw down some beach towels. It would saturate one towel, then I’d throw down another one. I would get so annoyed, and I remember thinking, We’ve certainly made enough money to afford a nicer home, like so many of our other friends. But we were so focused on paying down debt that we didn’t want to tear up the carpet to discover something that would derail that entire process. The funny thing was, when we finally did a renovation on that home, our contractor solved the problem for like $500. We were bracing ourselves, creating a cushion in our budget for a multi-thousand-dollar problem. And he solved it with some cement. I don’t really know what the lesson is there. But we made it through.

How did your saving affect your social lives? I know that sometimes other people feel judged or even hurt when you aren’t willing to spend money the same ways that they are or to do things with them.

Kiersten: Definitely. When you’re a marginalized identity or from a community where sharing and family is very much part of the cultural fabric, money is very interpersonal. And when you decide to do something with your money, whether it’s good for you or not, it affects other people and the plans that they may have that require your financial participation. So yeah, there was definitely a lot of pressure that came with doing something that was countercultural. One example is when we decided to open a 529 account for our son, and we encouraged our family to put money into that instead of giving him gifts — that was considered tacky. On his first birthday invitation, I said that we welcomed people bringing previously loved gifts, maybe toys that their own kids weren’t playing with anymore. People thought that was tacky, too.

People also have stopped telling us things. Maybe they got a new car or decided to get an advanced degree — they will sometimes withhold that information from us, thinking that we’ll judge them. That put a strain on several of the key relationships in our life. Ultimately, I don’t have a magic trick for controlling other people’s emotions. We had to accept that our decisions have ripple effects. And instead of focusing on validation and unlimited support and unwavering cheerleading, we focused on things we had in common — traditions, love.

You mentioned that people were afraid you would judge them for spending money in certain ways. Did you?

Julien: I think we certainly did in the earlier stages, but after a while, the more we learned about what this journey looks and feels like, I actually am now really empathetic.

Kiersten: In some cases, people are truly burdened by the systemic obstacles and health-related challenges of this country. But with most of the people who bring a financial challenge to us, it’s like seeing people drowning in shallow water and you want to be like, “Just stand up.” Maybe the issue is that they’re underpaid at their profession, or they’re employed in an industry that generally underpays. Or if they have expensive habits, like they have too much house or too much car. And usually the problem is that they want a solution that doesn’t address the actual problem. Most of the time I’m not judging them, but I can see their problem from a different vantage point and it’s more like, “Man, you’re not going to want to hear this, but just stand up. Just get rid of the car, just sell the house, just decide that you’re going to do some things differently for a year.” Of course, those changes also require emotional and inner work. But it’s interesting that people describe their financial problems and the decisions that they’ve made as if they’re permanent and can’t be undone.

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‘How We Paid Off $200,000 in Debt in 5 Years’