Debt-free by age 30

Everyday Stewardship |

How one couple reached their goal

Earlier this year, Dan and Carrie Kane walked into the Kidron branch of the Everence Federal Credit Union and paid off their mortgage. To mark the occasion, they brought their two children, Lilly (3) and Adella (1) and took a family photo with Branch Manager Amy Byler. (On June 22, the Kane family welcomed their third child, Everly Mae.)

Dan and Carrie, who are not yet 30 years old, were married when they were 24. The house they now own free and clear is the one Dan bought when he was 23 and single. At that time, he took out a 30-year mortgage.

Kane family interactions

Dan and Carrie Kane managing their finances, with a little help from their daughters, Adella and Lilly. Photography by Jim Maguire.

They wanted to change the mortgage, to shorten the loan to a five-year period. To refinance, they first had to come up with $20,000 cash. Then they had their new $80,000 mortgage remaining.

“As a finance major, I knew the numbers pretty well,” Dan said. “We may have been able to make more money in the stock market, but we felt strongly about being free of debt.”

As it turned out, five years was more than enough time. The Kanes paid off their mortgage in 21 months.

How the Kanes managed their money

Before they were married, Dan and Carrie had premarital counseling with Dan’s uncle, a pastor. He gave them a book by Dave Ramsey to read. “The book opened our eyes to the idea of paying off debt and showed us another way to live,” Carrie said.

Because Dan had been living in the house and paying the bills himself, the couple decided they would live off his income and save Carrie’s. Dan works for The Timken Company as a Principal Supply Chain Analyst. Carrie works out of the couple’s home, as an Independent Consultant and Regional Vice President for Arbonne International, a health and beauty company specializing in natural products.

“My parents were both really smart about money,” Dan said. “They taught my brothers and me not to spend more than needed and to live below our means.”

Carrie said that at first, progress was slow. “I wasn’t making much money initially. I drew a large thermometer as a way to visually track our progress. Every month, our oldest daughter and I colored in the amount we’d paid down on our debt. It seemed like such a big goal! What we threw at it seemed like very small amounts at first.”

But Carrie’s business soon picked up, allowing them to make larger payments.

And, while Dan had learned a lot about careful money management from his parents, Carrie had learned about generosity from her parents. So, the couple wasn’t using Carrie’s income only for debt repayment – but to give back.

Carrie and the mortgage thermometer

To help track their progress, Carrie drew a thermometer and colored it in each time they made a mortgage payment.

With privilege comes responsibility

Just as Dan learned from his parents the importance of being responsible with money, Carrie, from her parents, learned the equally important virtue of generosity. “My parents are incredibly generous with both their time and their money. My desire to be just as generous has motivated us to become debt free as quickly as possible,” she said.

Because Carrie and Dan grew up in loving, secure homes, they feel a responsibility to help those less fortunate. “We want to have an impact on people’s lives,” said Carrie.

So, when one of her friends from college went to Haiti to work in an orphanage, Carrie and Dan wrote a check. And when another friend went to India to work with girls who had been rescued from the sex slave trade industry, again the Kanes provided financial support.

Carrie is passionate about children who don’t have loving families. So helping provide better living conditions for the children in Haiti and India meant something to her – as did the opportunity to contribute to the significant work of her close college friends.

Managing their money well, so they can give when needs arise, motivates the Kanes as much as living without debt.

“We complement each other well,” Dan said. “She’s the dreamer. I’m the numbers guy. ... We come from very different backgrounds, but we both understand the other’s perspective and have worked together to accomplish our goal.”

Still, the Kanes admit they’ve had to make sacrifices to accomplish what they have.

Carrie’s advice

  1. Live beneath your means. “It doesn’t matter if you have one income or two. The main thing is to spend less than you make. Then you have money left over to save, pay down debt, or give away.”
  2. Be clear about your goals. “You have to set specific goals about what you’re trying to accomplish. Then, when you’re making sacrifices, you can focus on what you want to accomplish.”
  3. Celebrate progress. “We marked points on our debt thermometer where we got to celebrate. We’d go out for dinner or do something special.”

"What did they give up?"

Making sacrifices for some people means eating out less frequently, or making coffee instead of stopping at Starbucks. But one of Dan’s sacrifices meant physical discomfort every time he got in his car.

Kane old car

Dan, folded into the 1996 Honda Civic he recently traded in.

“I’m tall, six foot five,” he explained. “And for the past two and a half years, I’ve been driving a 1996 Honda Civic. It’s not comfortable, but it’s practical. We paid cash for it. The car gets me to and from work, but that’s about as long as I can stand to be in it.”

And, when he drove, he reminded himself of the money they were saving by not buying him a new car. (At the time of the interview, Dan was very excited that they had saved enough to buy him another car. So they were on the verge of trading up.)

Kane family house

The Kanes' house and the replacement for the Honda.

 

Carrie also feels the sacrifices personally, every day. “We do not have a working dishwasher. We hand wash all our dishes.” And, the house could use new carpet and some other upgrades.

“Sometimes,” she said, “it would just be easier to ignore our goals and allow ourselves to spend money more freely. There are times when saving or paying down debt is difficult, but we know that the current sacrifices are small compared to the freedom of being debt free and financially secure.”

In addition, while the Kanes are united completely on what their goals are, it’s not always clear to other people. “We live in a society that values really nice houses, cars, etc. Sometimes people have suggested that we just sell our house and get a newer, bigger one. But our patience has contributed to our newly found debt freedom!” Carrie said.

Dan and Carrie each have a way of thinking about money and the sacrifices they’re making in the "short term" that enable them to remain focused on their "long-term" goals. They are highly educated – both have master’s degrees. And Dan has a master’s of business administration with an emphasis in finance. But even with all that education, early on they sought help from Everence.

So where do they go now that they’ve met their goals?

Now that the mortgage is paid off, what’s next?

Kane family on front stoop

The family together on the front step. Clockwise beginning with Lilly (age 3), Dan, Adella (1), Carrie, and baby Everly Mae (6 weeks).

Paying off the mortgage was one goal the Kanes had. But it was only part of a larger goal that will continue to shape how the couple chooses to spend money.

Dan said, “The goal was to be completely debt free by age 30 – and then to NEVER pay interest again. We wanted to get debt free and to stay debt free.”

Because what they’re doing is working for them, Carrie and Dan will continue to live off of one income and use the second to save for their next goals and to give to the causes they care about.

One of the Kanes’ goals is to send their children to a private Christian school. Their oldest daughter is 3, so they still have a few years to work towards that goal.

Their immediate priorities include having two family-friendly vehicles and contributing the maximum to their Roth IRAs. After that, they’d like to start saving aggressively for a larger, more accommodating house, “hopefully paying cash,” Dan said.

And, the couple has other long-term goals.

“We want to get our finances in order now,” Dan said. “I don’t want to spend my whole life in corporate America. I want to retire when I am relatively young and still have the health and vitality to do things that are meaningful to me like giving back to the community, spending time with our children, and traveling.”

Carrie says that sometimes they have to remind themselves to spend money. “We have to balance,” she said. “It’s a fine line between being aggressive about your goals and still enjoying the time and making memories with the children. At this point, we’re fortunate that our girls don’t know the difference between an indoor water park and Disney world.”

Kirsten L. Klassen is a marketing manager for Everence. She enjoys meeting members of Everence and telling their stories.

Why budgeting is so important

When you know where your money is going, you control your finances. Otherwise, they’ll control you. If you are at a loss of how to set up a budget, ask for help.

Budgeting allows you to set aside money for bills like property taxes and car insurance, so you’re not stressed when you receive those bills. Having a budget helps you live within your means.

Sometimes, it’s hard for people to distinguish between their “wants” and their “needs.” But it gets easier with practice.

One of the remarkable aspects of the Kanes’ story is how clear they were about their goals. They set specific goals – and when they achieved them, they immediately set new goals.

We’re here to help you succeed. What are the financial challenges you’re facing?

- Amy Byler, Branch Manager of Everence Federal Credit Union, Kidron, Ohio

Find an Everence representative