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I had the pleasure of speaking with Bernadette Joy in this episode of The Wealthy Neighbors Show.
Bernadette and her husband AJ were able to successfully pay off over $300,000 worth of debt in over 3 years.
We talked about how she found herself in so much debt, how she was able to get AJ on board with paying off the debt, and we even went into their plans for building wealth for themselves going forward.
Bernadette is a lot of fun and her story is super inspirational!
How Did You Find Yourself $300,000 In Debt?
Bernadette racked up $300,000 in a little over a year.
When she realized her career was unfulfilling, but she didn’t know what she wanted to do, Bernadette decided to go back to school for an MBA.
Around this time, she, along with her husband AJ, bought a primary mortgage and an investment property.
What Was That Moment Like When You Realized You Had So Much Debt?
When Bernadette realized she had racked up so much debt in such a short amount of time, she cried and felt overwhelmed.
She didn’t realize that the student loans she had taken out were accruing interest during the grace period.
Bernadette also didn’t realize just how much she had taken out in student loans either.
If she could do things differently, she would have gone into her MBA program being fully aware of the costs and also would have had a career plan mapped out as well.
What Was Your Income Around That Time?
Before going back to school, Bernadette walked away from a 6-figure job and accepted a role at another company making around $30,000.
At the time, AJ’s salary was in the $90k range giving them a total household income of slightly more than $120k.
What Were Some Of The 1st Steps You Took To Pay Off Debt?
Bernadette came to AJ, who was very nonchalant, and told him how the debt made her feel.
After a while, she was able to talk AJ into following Dave Ramsey’s baby steps.
This meant taking their emergency fund down from over $10,000 down to $1,000 and putting the rest towards their debt.
This was a scary move because they owned 2 houses at the time and a big emergency could have sent them deep in debt.
She also went back and read all of the student loan paperwork she had ignored previously to learn what she could do to escape debt for good.
What Helped AJ Get On Board With Paying Off Debt?
There was a situation where AJ let it slip that he used a credit card to pay for a trip even though they had agreed to not use credit cards any longer.
This was because they were having trouble controlling spending with credit cards.
Once AJ saw how crushed Bernadette was by his decision, he realized how important debt freedom was to her and decided to jump on board.
Did You Do Anything Unconventional To Pay Off Debt So Fast?
During their debt-free journey, AJ and Bernadette took on a lot of side hustles in addition to their day jobs.
Bernadette also started a business renting dresses for special occasions that became a full-time job for her.
Another side hustle they picked up was being an extra for TV shows that were filming in the area.
These things were unconventional for Bernadette because she grew up white-collar and used to care what other people thought.
Now that she was so motivated to become debt-free, she didn’t care what her friends and family thought and pushed forward.
How Did You Celebrate?
Bernadette and AJ went to Italy for a week and paid for the entire trip with cash!
This was their first vacation during the entire 3 year journey to debt-freedom!
What Are They Doing To Build Wealth Going Forward?
Now that they are debt-free, Bernadette and AJ are putting the extra cashflow to work by maxing out their 401(k) and IRA plans each year.
They’re also in the process of saving up for another rental property after selling the first one during their debt-free journey.
Bernadette also has a new business to grow helping other people get out of debt themselves!