How We Got Out of Debt While Beating Cancer

Andres and Christina

This is a guest post by Andres and Christina. They have a very unique story to share. See below!

We were living a “normal” life when it happened, out of the blue.

Steady jobs, a nice rented apartment in San Diego, world travel as often as possible, friends, family – oh, and some debt!

Needless to say, cancer wasn’t part of our plans for 2012.

But there we were, 32 years old, in a doctor’s office being told Christina had cancer: stage 4 Hodgkin Lymphoma, to be exact.

Our first concern was Christina’s health. It was a scary time as we had to grapple with questions like, How serious, how life threatening is this? What happens next? What are the treatment options?

As the reality began to settle in around us, we realized that, when dealing with cancer, it’s not just your health that you need to worry about.

Cancer can wreak havoc on your finances, too.

Even if you have great health insurance, cancer still requires major unforeseen expenses. And sadly, many cancer patients forgo scans, skip medications, delay treatments and/or incur astronomical debt (a side effect known as financial toxicity).

Fortunately, we had done two things in the previous months to help prepare ourselves for such a potential catastrophe:

1. We had begun to dig ourselves out of debt in an effort to become financially free.

2. Thanks to some very fortuitous foresight, we had upgraded our health insurance plans.

Thanks in great part to these two little decisions, we were ultimately able to get through two consecutive bouts of cancer, and come out on the other side with zero debt – and the inspiration to start our own businesses and travel the world.

Here is how we did it.

The Realization: We’re in Debt

Back in the fall of 2011 – about 6 months before we had any inkling that 2012 would become our first year of dealing with cancer – we took our first fateful baby steps on our path to financial freedom.

It started with a minor epiphany: our finances weren’t as solid as we had thought them to be. Sure, we had student-loan payments and car payments. True, we didn’t have that much money saved in the bank (let’s just say it was well under several thousand dollars).

But we made decent money (each of us was earning around $60,000/year at the time) and always had enough spare money to go out with friends, and take 1-2 international trips per year.

So while we weren’t exactly on the path to becoming rich, we never felt like we had a problem.

That’s when we realized: We’re completely delusional!

This realization wasn’t instantaneous. After some reading and research, we finally took a close look at our real financial situation and realized that we were in a surprisingly precarious position.

Unsurprisingly, our biggest liability – aside from weak savings – was our “crippling” debt. I use quotes here because we had never even considered ourselves to even have any debts. If someone had asked us whether we were in debt, we could have honestly looked at them in the eyes and said “No,” without realizing it wasn’t true.

We were suffering from the debt delusion.

Our misguided and completely inaccurate view of debt was based on a misperception that debts such as student loans, car payments, or even small credit card debts are not actually debt. We thought of debt as something that people with massive credit-card bills have, or people who take out irresponsible loans and then fail to pay them back.

After taking a good, honest look at our financial situation, we slowly grasped that – far from being debt free – we were in fact approximately $25,000 in debt.

Our debt was composed of about $10,000 in student loans, $10,000 on our “practical” Honda Civics, and $5,000 in credit cards.

It was not easy to face this information – the truth was not what we wanted it to be! – but by going through this fairly painful examination we discovered the information we needed to fix our predicament and take the next step.

Once we woke up and acknowledged our true financial picture (gloomy!) we were in a position to come up with a gameplan on how to rid ourselves of the debt burden.

Andres and Christina

The Gameplan: The Budget

Before figuring out which debts to pay off first, the first thing we did was create a budget.

This was an absolutely essential step for us. If you don’t tell your money where to go or what to do, it’s very easy for it to disappear without your realizing it.

We started with our “non-negotiables,” things we had to pay every single month, such as rent, minimum car payments, minimum student loan payments, etc. We then added other necessary, but variable, expenses such as food and gas.

Then we we pulled bank statements from the previous 3 months to get a real look at our spending habits. One of the most common mistakes people seem to make when creating budgets is underestimating how many times we swipe those little cards each month!

Another thing we did, which helped us avoid “accidental” overspending, was temporarily ban all use of credit and debit cards, and instead just use cash. Each week we’d go to the bank and pull out the exact amount we needed to cover what was indicated in our budget, making it much easier to resist the temptation to veer from the plan.

Was it hard sometimes?

Occasionally it was a pain, but keeping our eyes on the prize made giving up small things surprisingly easy. We also knew that, after becoming debt free and financially free, we’d be in a much better position to enjoy our money, and this definitely kept us going!

Trimming the Fat: Minimizing Expenses

One of the issues with our budget was that, after accounting for all our expenses, we realized that we didn’t really have much spare money to put towards our debts. So we started to get creative in looking for ways to cut our expenses.

To step up our efforts, we looked long and hard at where we could further trim the fat, and realized that – despite some inconveniences – we could get rid of one of our cars.

It struck us as an obvious realization at the moment, but we had never, ever considered sharing a car before.

Becoming a “single-car family” meant saving on car payments, gas, insurance and maintenance. The price was minor scheduling inconveniences, but the savings were huge.

Andres and Christina

Attacking Our Debts One by One

Now that we had a budget, and had found ways to control our spending and minimize our expenses, we needed a specific plan of attack for how to tackle our debts.

There are many schools of thought when it comes to debt-payoff strategies. In many ways it makes sense to pay your highest-interest debts off first, as they’re the ones most quickly draining you of your income.

However, we took a different approach. We decided to use basic human psychology in our favor, and opted for some quick wins.

So rather than looking at things from an overly-analytical perspective, we simply chose our tiniest debt, and paid it off in full. A quick win!

We made a list of all our debts and arranged them from smallest to largest. One quick win led to another, and another. All of our money and effort went into paying off that one bill, until it had a zero balance. Then we moved on to attack the next one.

By paying off our debts from smallest to largest, we were able to steadily relieve ourselves of the stress of having multiple debts, by continuously being able to cross debts off our list.

Naturally, this also made us feel really good every time we paid off a debt – however small – and it kept us feeling motivated. Our large debts still loomed large on the horizon, but we were making fantastic progress, and also whittling down our debts from various to a handful, and finally from a handful to a couple…

Cancer: A “Minor” Roadblock

By early 2012 we were feeling great and making awesome progress.

We’d paid off several debts (including tiny ones we hadn’t even considered, like $9 worth of library fines!), and whittled our original $25,000 down to $15,000.

Spirits were high as our list of debts had shrunk to just 2: half of our remaining student loan payments, and our final debt, the car payment.

This is when we found out Christina had cancer.

Suddenly becoming debt free didn’t seem so urgent anymore, and our priorities shifted completely to doing everything possible to make sure Christina got healthy as quickly as possible.

But after a few weeks of adjusting to our new reality, our thoughts gradually returned to our vision of becoming debt free.

Fortunately, Christina had great health insurance, which meant we could receive the best in treatment. But even with insurance coverage we had to shell out an annual medical deductible of $4,500 (and also encountered other medical expenses along the way), all of which threatened to derail our efforts.

The first thing we had to do was adjust our timelines and expectations, and not beat ourselves up about it. Cancer seemed like a pretty good excuse for taking a few extra months to achieve our goal!

We also had to revise our budget, as our income was somewhat diminished by the fact that Christina had to take a leave of absence from her job.

Thankfully, all the money she had paid into disability insurance over the years came back to be extremely helpful. While it did not fully replace her salary, the monthly check came to about 75% of her typical paycheck, for which we were extremely grateful.

The Final Push

Despite the setbacks, we got our plan of attack back on track.

It took a few more months than originally planned, but by the summer of 2013 we were celebrating two milestones: Christina being declared cancer free, and paying off the last of our debts!

Being debt free (and cancer free) was an amazing feeling, and – feeling incredibly inspired – we decided to keep going.

Using our newly-developed budgeting skills, we began to put all our efforts into saving a nest egg with which to leave our jobs and start our own company.

By December 2013, we had successfully launched our new venture, Boutique Japan Travel Company, which we run while traveling the world.

Over the course of the past year we have had the chance to live in Japan, Mexico and Thailand, and pay visits to Bali, Hong Kong, the Philippines, Vietnam and Cambodia.

And in the fall of 2014, Christina launched a brand-new podcast and website, The Cancer GamePlan, dedicated to helping people affected by cancer live life to the fullest.

None of this would have been possible for us if we hadn’t made that little decision to take control of our finances and pay off our debt!

Andres and Christina

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  • Thanks so much Ben for featuring our story!

    • So grateful you and Christina shared your experience, Andres! Congratulations on ALL your incredible accomplishments. PS I love your photos!

      • Thank you Claire! Glad you liked the photos, too!

    • You are so welcome! Thanks for sharing it with all of us.

      • Clinton Payne

        Hey benjamin…sorry…got a question. I bought a truck several months ago(made the down payment,but have missed atleast 4 monthly payments). I have moved out of state and want to use my truck to get to work and back for another couple months till me and my fiance can afford one. Heres my question. Can it be called in as stolen? I dont want that kind of problem. My son landon payne(watch…landon payne memorial….on you tube)passed away a fe ewe years ago(my family were arrested for his torture and murder) and am just now putting my life back together…..got a good woman….a good job and would like to know I cant goto jail if I continue to use it to goto work for awhile. I got no choice,but I was wondering if u can help

  • Valerie

    What a wonderful and inspiring story!! Congratulations on your good health – physical and financial. Hooray!!

  • WoW! It is a great motivational story. I think, we should follow the all steps to get out of debt.

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