Months using ReadyForZero: 24
Accounts paid off: 5 of 5
“I’ve had debt for 15-20 years and finally got serious about it a year and a half ago. Today, I’m 100% debt free thanks to ReadyForZero”
Like so many Americans, Valerie had a play now, pay later mindset. Over the course of nearly twenty years, her mindless spending habits began to add up even in spite of regular salary increases and an uninterrupted work history. She refinanced her mortgage twice, paying down debt both times, only to let the debt slowly grow with no real plan in place to address the underlying habits and attitudes about money. Everyone has setbacks in life, and Valerie was no exception.
In 2006 she went through a divorce, and in 2009, after being diagnosed with Stage III breast cancer, her “you can’t take it with you” attitude hit an all-time high. Time felt precious to her in a way money did not. She spared no expense on travel for herself and her son, clothes, and dining out.
Newly remarried and completely in remission by 2011, she took careful stock of her life and especially her finances and was astounded by the magnitude of the debt – at the time, over $25,000. She realized that if she didn’t change course immediately, she was headed for financial ruin.
I told myself that this was an unsustainable situation. I almost felt like a slave to it.
Paying Off the Debt in Secrecy
Filled with shame about her financial past and concerned that her husband would want to step in and save the day, she knew it was important to establish a new relationship with money and spending entirely on her own in order to ensure a debt-free future. It wasn’t until her debts were fully paid that she finally let her husband in on her secret triumph, and because the shame around her debt was so extreme, she was thankful he never asked for details about the extent of her money troubles.
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I know this wasn’t the best decision to hide the debt from him but I also knew that this was something I had to do for myself. I created a plan and was determined to stick with it and finally pay off these lingering debts.
The feeling of being embarrassed and ashamed is something millions of Americans feel every day. When you think about someone having a load of debt, it’s easy to judge and think how financially irresponsible they are. At some point in time, we’ve all been there.
Some people try to bury these facts and not confront the situation head on. They’ll stop checking their credit card balances in fear of knowing the truth: the cold hard reality that they are drowning in debt. They will only check their balances when it’s time to pay the monthly payments.
The Master Plan to Pay Off The Debts
Valerie took a multi-pronged approach to eliminating the debt. The first step was to accept reality and deal with the problem head-on. With her excellent credit still intact and sufficient available credit on multiple cards, she took advantage of the 0% credit offers available to her. With no accumulating interest, all payments went to debt principal.
I moved everything over to a 0% balance transfer card and watched it like a hawk. I created a detailed spreadsheet of when the balance transfer would expire and paid off the credit card where the promotion was expiring the quickest first.
This is why it’s important to tackle your debts head on before it gets too late. As soon as you miss one payment, it’ll be extremely difficult to apply for a balance transfer credit card.
The second step was to take a hard, honest look at her spending habits. She pored over several years’ worth of expenditures and quickly identified all the areas where she could drastically slash spending – clothing, eating out, entertainment. The fact that she now shared major household expenses with her new husband was also tremendously helpful in freeing up disposable cash for debt pay down.
I was spending around $6,000 on clothes every year and I knew this was the first step to minimizing my spending.
The third step was diligence. She created strict budgets for all discretionary spending and stuck to them. She clipped coupons and shopped sales for necessary purchases. Over time, she created good spending habits that made decision making easy – would she rather be entertained for two hours at a play or be debt-free in two years? The debt-free option always won out. Her reflexive free-wheeling spending was transformed into reflexive fiscal conservatism, which she knows will serve her well in staying debt-free from now on.
On today’s date, September 1, 2015, Valerie will be 100% debt free. It took her 18 months but the lessons she learned along the way has been invaluable.
So What Now?
In the process of getting her financial house in order, Valerie also undertook a comprehensive decluttering mission in other areas of her life as well. She’s convinced that letting go of all the unused gadgets, unnecessary clothes, and other useless things contributed to her ability to let go of the debt as well. She’s discovered tremendous joy in surrounding herself with fewer things which has created more financial freedom for her to enjoy experiences. Now debt-free, she’s looking ahead to all the amazing experiences she can afford to have next year. Budgeted trips include dog-sledding and a week in Hawaii with her family, and a girl’s-only adventure in Cuba with her friends.
I want to be able to finally enjoy life. All those things I bought in the past are meaningless. I want to be able to spend my money on unforgettable experiences that will last a lifetime.
Valerie’s remarkable story is a true testament that anyone can get out of debt. When you’re buried in debt, it’s easier to not face the truth. It’ll cloud your judgment and take you into deep depression. Facing your problems head on will always be the right choice. And just like Valerie, once you have that burning desire to finally kick debt in the butt, anything is possible.
Congratulations Valerie and thanks for sharing your story!