How I Paid Off My Debt in Less Than Two Years (and You Can Too)

How I Paid Off My Debt in Less Than Two Years

Being in debt is something we all have a love-hate relationship with. We love the vacations, clothes, cars and stuff it can buy, be we hate to pay the bill at the end of the month.

After finally coming to grips with my dysfunctional relationship with debt, I decided to get out of debt once and for all. Here’s how I paid off $14,000 in just 14 months, and how you can too!

Step #1: Understand Your Money Personality

The first step that I had to take when facing my debt problems, was to understand my personality with money. Was I a spender? A saver? A combination of both or something totally different? Once I understood the way I handled money, it made it easier to overcome those temptations, or even head them off before it became a big deal.

The way we handle and view our finances depends on many different factors: how you grew up, what you learned from your parents and all the good or bad habits you picked up along the way. It’s vital we understand our own personalities and mindsets if we want to manage our money successfully.

If we can embrace both our weaknesses and strengths about ourselves, we can quickly create better financial habits. And that’s the key to accomplishing your financial goals — changing bad habits and reinforcing good ones!

Step #2: Create a Realistic Plan

Once I understood my mindset with money and what my debt pitfalls were, I created a get-out-of-debt game plan. I signed up for ReadyForZero and started plugging in my accounts so I could see an accurate picture of all my debts.

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Yes, the amounts were overwhelming and the interest rate on some of the accounts were more than alarming. But then I realized how fed up I was with paying the banks and funding other people’s pockets with my hard-earned cash.

It was time to change!

If it was up to me, I would have been debt free within six months or less, but with an income of 36k per year, that just wasn’t a realistic goal. It’s important to create both an inspiring but realistic plan if you want to be debt-free. Otherwise you might set yourself up for failure and end up going in the wrong direction.

Step #3: Get Pumped Up

Being in debt has a way of dragging you down, both emotionally and psychologically, so instead of letting it weigh on your mind, day in and day out, it’s better to get pumped up and tackle your debt head-on.

How do you do this?

Well there are many different ways, depending on your likes and dislikes. For me, I liked having a visual aid, something I could look at every day to remember why I was making the financial sacrifices and that it would all be worth it in the end.

Some people call it “Dream Porn,” others call it a “Vision Board,” but whatever your method is just make sure that it gets you pumped up and excited about your debt goals.

If you and your significant other are working towards debt freedom together, turn it into a fun competition. See who can pay off the highest amount of debt each week. Get your whole family involved and make a game out of how much extra money you can find each month. Which brings me to my next point…

Step #4: Use the Power of Peer Pressure

Good peer pressure is a powerful thing, and can be used to your advantage if you learn to properly harness it. To really be successful with your financial goals it’s a good idea to get your friends and family on board with what you’re doing. In the very least, tell them about your goals and plans.

When you share your goals with your friends and loved ones, they can help keep you accountable — and maybe even become your biggest cheerleaders. The truth is no one achieves financial goals entirely on their own, so open up to your peers and allow them to help.

I can attribute a lot of my financial success to the support of the ReadyForZero community along with my amazing community of blog readers. Without the support of your peers, it makes an uphill battle seem nearly impossible. This kind of good peer pressure is what will help you succeed much faster and ensure your goals are accomplished.

You can read more about Carrie‘s journey toward becoming debt free on her blog.

Image credit: iakov

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  • John S @ Frugal Rules

    Great work on paying off $14k in 14 months, that’s awesome! While having a plan is key in my opinion, knowing our money personality is vital. It starts with that, in my opinion, and it can help you come up with a much more effective plan.

    • http://carefulcents.com/ Carrie Smith

      Oh yes absolutely John. In fact I tried to get out of debt once before but since I didn’t understand my money habits and how I handled financial situations, I slipped right back into debt again. This time I feel like it really stuck because I understood my money personality!

    • Le pacificateur

      I have a 7K debt for almost 6 years i feel like i am carrying the world on my back. Just don’t know how to deal with it anymore…

    • http://carefulcents.com/ Carrie Smith

      Very good point John! Knowing how I am when it comes to handling money has been the key to success for sure.

  • http://www.monsterpiggybank.com/ Glen @ Monster Piggy Bank

    I love hearing peoples debt pay down stories. It always keeps me motivated to continue my own debt pay down progress

    I am hoping to have all our debt paid off within 24 months. I’m not sure how well we will go, but it is worth a try.

    • http://carefulcents.com/ Carrie Smith

      That’s so exciting to aim to be debt free within 24 months. I think that’s a very doable goal, and I know with the help of the community you’ll be able to stay on track! Good luck Glen.

  • http://twitter.com/boomerangbuck Andre Brown

    Great post and thank you for sharing your experiences! I like the idea of a money personality. How we grew up and what we were exposed to has a great impact on our habits. Great info and I hope to join you in the debt free club one day!

  • Greg Johnson

    one more week and ill have no debt except student loans and my new car. being in the oilfield i will have both paid off in one year

    • Rider

      You speak babble, in one week no “debt”, but yet you have other multiple lingering “debts”? You sir, are very confused about the word “debt”.

      • http://twitter.com/lgheifner lagina

        Umm, I’m thinking he means – in one week all bills – EXCEPT his student loan and new car will be paid off. Not sure how that’s babbling…he was just stating that this week – apparently he was paying off all but that last 2 of his debts..which most likely will take some time to pay off. :) Great job Greg!

  • Vserp

    Oh maybe I should write an article too! I’ve paid off $60k in 10 months. Too bad I still have another $65k to go.

    Here is the trick: have a really high salary. The end.

    It’s always simple math. You can never pay back more than you make minus necessary expenses to live off of. It’s impossible.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Hi Vserp, we’re definitely trying to help people no matter what their salary is, although you’re certainly right that it is easier if you have a higher salary. Is there any particular information that would help you? Let us know and we can try to incorporate it into our future blog posts.

      • $360695

        Another thing to add for Vser….If he has such a high salary….he shouldn’t be in debt in the first place.

        • Vserp

          Many people with higher salaries have graduate education (possibly even a majority). If they come from middle class families there is a good chance they have high debt loads. It’s a fairly common combination.

          The scam is for many of these people, myself included, they are better off not having the debt in the first place because of the lost years and how bad job security is these days. Most of the data indicating more education results in more income is falsified or dated.

          • EnjoyingTheView

            “Most of the data indicating more education results in more income is falsified or dated.”
            Not True! I strongly disgree with your defeatist presumption that more education does not result in more income! It usually DOES!

            First of all, you must choose an education path that will give you useful and currently marketable skills that will pay enough to cover the cost. Don’t pay outrageous tuition to an ivy league school unless you have VERY GOOD financial support and can compete with that level of performance! An expensive Ivy league degree is NOT necessary to simply land a decent paying job! Make sure to appply for ANY and ALL grants and scholarships that you might be qualified for! Make sure your major is in a discipline that is currently in demand! For example, a philosophy degree would probably be a very bad choice unless you have a particular job in mind that clearly REQUIRES such knowledge! This the number one most common error people tend to make who pay for an education but do not end up with a comparable job! They either spend WAY too much at an overly expensive school and/or pick a useless degree program!

            Second, you must take your course work VERY seriously and make the best grades you can. You won’t get that dream job if you graduate with a lackluster grade average!

            Third, you must target appropriate job openings that require the very knowledge and skills you have now acquired. You will likely need to relocate, so plan for that as well! Look closely at the advertised job requirements and make sure that you mention these exact skill “buzzwords” in your resume, which should be neat, concise and taylored to whatever job your are seeking!
            Fourth and also very important, be on time for your interview, wear neat, professional attire that is appropriate for your target position, be confident and friendly, but not silly or smug! Also remember that you will probably NOT get the first position you apply for, so keep your chin up and be persistent!
            If you properly follow these basic concepts, you will be VERY likely to land a job that will suit your education, which, in turn, will give you enough income to eventually pay off your student debt!
            The only thing stopping you is you.

          • McShady

            “I spent eight years and $9 billion getting my Ph.D in Social work, but social workers only make $30,000 a year… Education is pointless.”

            Well, yea. For you.

          • dorisdsr

            Have you heard about MIT Open Courses? Anyone can go to the MIT site and take all their courses for FREE! If you want credit I think it only costs $150 per class. You can have live mentors, the best professors, video instructions, class notes, even chat with classmates on line. It is wonderful and FREE!! What better to have on your resume than MIT? It is costing them appx. $4 MILLION per year–you can donate IF you wish to and can afford it. Otherwise it is NO cost at all. I am taking Physics and it is THE best. Check it out.

          • Doug Ullrich

            Bad planning— a PhD in Social Work — you should have gotten that in Accounting or Engineering… Social Work historically pays poorly, BUT I would hope you are competent enough to be paid more in your field than someone without a bachelors or masters..

          • kikidiki

            Dude. No one becomes a social worker for monetary reasons. If social workers were truly compensated for the value of their work, which, in my estimation, would be much more than 30k, imagine all the people who would flock to the profession for the wrong reasons.

          • kikidiki

            Especially when you can get an MSW and make 30k to start lol

        • um

          not true. College=expensive.

          • Daniela Mitrovic

            College is stupid expensive. I got a two year degree, and it’ll take me ten years to pay back the loan. The ironic part is that I still can’t even use the degree because everyone wants experience. In order to get experience, I need to take a pay cut that’s 1/2 my currently salary. So, for now, I’m kind of stuck in a job that doesn’t utilize my skills so I can pay back a loan for a degree I can’t use.

          • http://www.twitter.com/bwfeldman Benjamin Feldman

            Wow, sorry to hear this! I think many people today are facing this kind of Catch-22. Student loan debt is constraining, but I hope you’ll get that dream job eventually.

          • BeatusSum

            I kind of feel the same way as this. Without a doubt, education can make a big difference in earning potential, but I currently am working on an associate’s degree that will take years to pay off. When I look at jobs in my field, the only ones that pay well enough to put a dent in that debt plus cover the expenses of a growing family all require experience… so I am left with low-wage jobs that may take years to really come to anything. I am not trying to discount higher education, but it is not the guaranteed ticket to the middle class that it once was.

          • http://www.twitter.com/bwfeldman Benjamin Feldman

            It is a very difficult situation! And you’re definitely not alone. There are many others in a similar position. I wish you the best of luck in overcoming that debt. And also, have you tried our free get out of debt app on ReadyForZero? If so, I’d love to hear what you think.

    • Guest

      You can do it! My wife and I knocked out 120k in about 2.5 years. Keep it up!

      • Vserp

        Thank you for the kind words. It is rough but probably it will be worth it. The best part will be knocking out that last $25k or so in one lump sum, I’m looking forward to that. It will annoy the lender/servicer so much to lose that gravy train of interest.

        • Mcshady

          It really wont. They’ll just put it back out there into the pond and make that same interest off of it from someone else.

    • Thatisright1

      Extra job(s), spend less, extra job(s), raise

    • Fladabosco

      I agree but most people’s problems don’t come from necessary expenses. How many people write ‘the only debt I have is my car.’ My wife and I are now multi-millionaires but I drive a 1991 Mercedes which I love and my wife has a 2002 Passat that’s a nice little car. We have the same little house we bought 25 years ago. We cook most of our own food and don’t take fancy vacations. Over the years these things really add up.

      • Vserp

        A lot of people do lack discipline, that’s true. But when we are comparing disciplined people with other disciplined people it’s always purely going to be a numbers game. I thought it was common sense to cut unnecessary expenses if your goal is to de-leverage debt, and you should de-leverage when the interest rate is higher than the returns you can get for the same money. Student loans are extremely toxic because of their absurdly high interest rates and how useless they are as an asset (they are not one).

        And now with Bernanke’s assault on savings, it makes even less sense to carry a high debt load.

      • Lbrown

        Did you and your wife become millionaires in your profession as musicians or by some other means? Would you mind mentoring me?

      • Souris Optique

        Most of the people you are talking to would *love* to be able to own “a 1991 Mercedes” and a “little house we bought 25 years ago.” Much *less* go out to eat or “take fancy vacations.” I guess being “multi-millionaires” these would seem like money saving measures, but you just end up sounding out of touch to people to whom buying “a little house” is an improbable dream.

    • http://carefulcents.com/ Carrie Smith

      Good thing I was only making $36,000! Having a really high salary would have made it SO much easier.

  • Disillusioned in California

    This article was stupid. Long-term budgets to reduce debt only work even for those considered “tight” if wages are steady and stay ahead of inflation.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Sorry to hear you didn’t like the article. For a longer and more detailed article, you might want to check out this one: http://blog.readyforzero.com/how-to-get-out-of-debt. Always interested to hear what you think. Thanks.

    • Thatisright1

      The points made in the article are still valid.

  • lpzgrn

    What about when you’re paying $1500 / mo for childcare for two kids because you don’t have the grandma safety net & can’t afford to stay home but make too much for government freebies and are getting furloughed?

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      This is really hard. Sorry to hear about the furloughs. A lot of people right now are going through this, and we hope it ends soon. In the meantime, I hope maybe our blog and resource centers can help. Also, have you tried using ReadyForZero yet? https://www.readyforzero.com

    • Mom_of_3

      Start looking at anything you don’t absolutely HAVE to have. Its not fun…not at all. I’m paying $1200/month for daycare/tuition, and I am hanging on for that day (in two more years) when I am DONE with that. We got rid of our home phone, got rid of bottled water, started planning our menu according to the grocery store’s sale paper, use coupons as we come across them, we only go to the movies once per year now, we do eat take out twice a month…but its closely budgeted…stuff like 10 pieces of fried chicken and 4 biscuits for $10. I’m looking at switching from AT&T to Straight Talk…that will save $90 per month…as soon as my contract is up in 5 more months. I already shopped around for cheaper insurance. We talked about dropping cable…that would save $100/month…but my husband doesn’t really want to do that. I’ve been buying the kids clothes at the consignment store. I’ve been running the heat and AC less. I’m avoiding cooking in the oven to save on electricity…or if I do, I’ll cook 4 dishes all at once. I make my own homemade laundry detergent too from borax, washing soda, and soap & water.

      • http://www.twitter.com/bwfeldman Benjamin Feldman

        Wow, you are an expert at saving money – nice job! I like your idea of switching to a cheaper phone service. That is something I’ve been meaning to look into myself. If you ever want to write a guest post for us on how to save money, let me know! :)

      • Dave

        You avoid cooking in the oven to save electricity, yet you have a $100/month cable bill that you won’t cancel?

        Ever hear the phrase “low hanging fruit?” That is where you start, and it is the cable bill in this case.

        If your husband doesn’t want to cut it maybe he should come up with an extra $100/month income to pay for it. Many of my friends sold blood plasma in college and made ~$400 a month that way.

        • flagirl336

          I think the lady is doing great to do the best she can. She can’t hold a gun to his head.

          Your idea that someone has to “pay” for luxuries themselves with extra income is a great one, though. Maybe she can propose that as a challenge that he’d be willing to rise to.

        • Jett

          Dave,
          I see your point. Cable is a luxury item and could be easily cut – by some people. People who initially jump into paying down debt get overwhelmed with how restrictive the process gets. It is like crash/fad dieting. If you restrict everything you enjoy, eventually you will binge on that one thing. Perhaps the husband is maintaining sanity by the $100 cable bill, and it is truly the best way to keep him from spending that $100 (or more) on something else.
          I believe this also relates to spending choices/habits.
          Then again, who said mom is in debt? Perhaps she is a money micromanager?
          I, however, would cut the cable.

          • Jett

            I mean to add to this that paying off debt, unlike fad diets, is only as restrictive as you choose for the process to be. If you wish it to be lax (which is my preferred method for my debt at the moment) then it can be. It can also be highly stringent. The difference is that I am choosing to pay off my student loans, new car, and house in a short amount of time, and it is not a question on which I can afford to pay – it is a question on how much extra I can afford to pay. That is where my budget, plan, and goals come in. Some people do not have the luxury – the debt outweighs the income.

  • SD

    My husband and I are beginning the process of selling our house in order to get out of debt. The kids have left home and we no longer need as much space. Although we love our home, we’ll love being out of debt even more. We hope to pay off the balance on our mortgage, pay off our 8 year old car and have some money left over. We plan to rent a smaller, cheaper house for a while which means we’ll no longer be paying property taxes, homeowner’s insurance, etc.

    Everyone wants financial freedom but I believe few are willing to take the (sometimes extreme) steps necessary to make that happen.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Agreed! Sometimes it does require extreme steps. Congrats on deciding to take the steps to become debt free very soon.

    • Tally

      At current interest rates, consider buying a tiny house you could rent out later (1200 sq ft or less).

  • Thatisright1

    Kudos to you. My wife and I just paid off 120k of debt (cars, boat, credit cards, and house repairs on a HELOC). It took us 2 years and extra jobs working the night shift, but it was well worth it.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Congratulations! That is great to hear. I’m glad you were able to make it happen. Thanks for sharing your story here.

  • Fladabosco

    I retired at age 40 to do what I wanted. I had an agreement with my wife (who works and is now the major supporter). I had to have NO debt and 2 years mortgage payments in the bank. One of my weapons is against credit cards. I don’t use them. They are evil and as we see as a country now have seen how they have dragged people into debt – expensive, usurious debt.

    If you have never read Rich Man, Poor Man its central tenet is that the poor dad made more money but borrowed heavily, and the rich dad never spent money he didn’t have.

    Obviously there are people in the US who feel they have been forced to use credit cards because of the recession but if you can avoid using them you should. They are a minefield of ridiculous fees and penalties and outrageous interest rates up to EIGHTY PERCENT in the US for some cards. Eighty percent! Good lord!

    You can get a bank loan for a few percentage points right now but the average credit card rate in the US is over ten percent. In a country where children are not taught higher order thinking skills it doesn’t surprise me that they think credit cards are a tap that money spills out of.

    The best way to get rid of debt is to not get into it.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      There are a lot of reasons people end up in debt, including medical bills, unemployment, etc. But I agree that most credit cards charge interest rates that are too high. It’s always a good idea to avoid credit card debt if possible, and that’s something we advocate here on a daily basis. Thanks for your comment.

      • Dave

        Interest rates are supposed to reflect risk. People willing to spend money they dont have to buy clothes or vacations are obviously a higher risk than someone that has more conservative spending habits. As such, those people absolutely should be paying those high interest rates since so many of them are going to declare bankruptcy. Just read the comments on this very post…

        “I got out of debt in just 4 months! I had a chapter 7 bankruptcy and kept almost everything. The creditors were left holding worthless paper. Sometimes the debtor wins! YUK YUK YUK; HE HE HE!”

        Explain to me why anyone would lend anything to this guy without a huge interest rate…

    • Twigg

      Wow you’ve got a great wife. I would be bitter seeing you enjoy freedom at 40 while I slave away.

      • Fladabosco

        You can relax. When I ‘retired’ we had a 5 year old and a 3 year old and a 50 year old house that had never been taken care of. It’s not like I played golf every day and she has lots of perks. I should mention that when I was young I was sous chef in one of the San Francisco area’s most expensive restaurants. I am also a musician and I am really busy performing and teaching. I don’t have to, and that’s the difference.

        I don’t think she minded working that much when there was chocolate souffle waiting for her when she got home.

        • flagirl336

          You sound like a man who knows the way to a woman’s heart. ;-)

    • Thatisright1

      Borrowing money under the right conditions can make an average man/woman rich over time.

  • Tehani

    Paying off debt can only be accomplished when one has a high income and low expenses.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      It’s very hard to pay off debt when you have little flexibility between monthly expenses and monthly income. I agree about that. I know a lot of people are dealing with challenges ranging from unemployment to medical bills to crushing student loan debt right now. We hope to be able to help all our readers as much as possible and hopefully some of our posts will resonate with you. Let me know if there is any potential topic you’d like us to write about.

    • Fladabosco

      1) You can (and usually should) avoid getting into debt. Debt has costs. It’s like giving your boss back whatever raise you’ve gotten and then some. 2) You can pay off your debt as long as you have income. 3) You can negotiate with your debtors to make it easier to pay off. 4) You can change your spending habits. Spending $10 a day on lunch is no big deal but if you do it every day that’s $200 a month or $2400 a year. $5 a day on lattes runs you $1200 a year.

      If you put a dollar into a 401K you get the dollar plus whatever match your employer gives and you pay no taxes on the income until you withdraw. If you take the dollar and spend it, you get about $.60 of it to spend after taxes, then you pay interest on it. You have half the money to spend and you have debt.

      • Tehani

        Yes, one can pay off debt as long as there is income, but if that income is low, paying off the debt will take much longer. Having little income would only allow the person to make minimum payments. Minimum payments get wiped out by interest.

        • flagirl336

          It’s amazing how many Americans think they have a low income, yet they still have cable and a smart phone. Plus they eat out often. Cutting out those expenses alone could pay off a sizable debt over time.

          And what better motivation to increase one’s income with a second job or better skills than to get debt-free?

          • phoenixchick

            We canceled cable and are saving about $80 per month for this reason.

          • http://www.twitter.com/bwfeldman Benjamin Feldman

            That’s great! Eighty dollars per month is a lot of money. Are you finding alternative forms of entertainment that are free or low cost?

          • phoenixchick

            My husband has Netflix and I am usually just online. We weren’t really using the cable, so it’s not really a loss for us.

  • antiana

    The idea is great but I don’t think that it can be done in all situations. I don’t have a high salary. I got in debt due to an on-line income scam. I am now 81 and bring in 1300 a month. My husband is 84, ill health, and small pension. With house payment, utilities, medical, it is just about all we can do to make it. My retirement plans and income were spent on raising 5 children as a single hard working mother. Now I would just love to have my walls painted which have not been done in 12 years.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      I’m sorry to hear that. It’s really unfair that you got scammed and I also am sorry to hear about your husband’s medical problems. You are definitely right that it is easier to get out of debt when you have more income coming in. I’ll post a few links below that may be helpful to you. Let us know if there are any questions we can help answer. And thanks for your comment.
      http://blog.readyforzero.com/how-to-negotiate-medical-debt/
      http://blog.readyforzero.com/ways-to-get-out-of-debt/
      blog.readyforzero.com/how-to-get-out-of-debt

  • Johnathan Huntington

    I got out of debt in just 4 months! I had a chapter 7 bankruptcy and kept almost everything. The creditors were left holding worthless paper. Sometimes the debtor wins! YUK YUK YUK; HE HE HE!

    • phoenixchick

      Wow. I don’t know what your story is, but it sure doesn’t sound like there was a whole lot of thought put into what was spent on the debt or filing the bankruptcy to get out of your debt. Good luck on getting any decent rates for a car or a mortgage due to being the “debtor that wins.”

  • iwannabeabillionaire

    Less than 2 years ago, my husband of 24 years left me with over $30k in credit card debt…..today I am DEBT FREE. I didn’t go bankrupt, I had no help or support from anyone. I took a 2nd job, stoppped using my credit cards, payed of the highest interest cards 1st then worked my way down the ladder. The only “cheat” move I made was I opened one new credit card that offered me 2.99% on balance transfers for 18 months. That card just jumped back up to 13.99% and I payed it off!! Ding-dong I’m DONE.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Congratulations! That is an inspiring story. If you’re interested, it might be fun to have you write a blog post or do an interview with us telling your story and sharing advice with others who are trying to pay off their own debt. Let me know if you’re interested!

    • http://carefulcents.com/ Carrie Smith

      WOW! Great job becoming debt free! It sounds like you made the necessary sacrifices to get the job done. How does it feel to be free?

  • http://www.facebook.com/david.lindley.946 David Lindley

    one way i think would be great for those who have been successful at getting into debt then out of debt would be a system to help others get out of debt through lower rate loans (investments) in other people. The bank’s are killers with their 14+ percent interest. When if someone could afford to take a risk for say 8 percent that may just be what someone needs to get on track. What do you all think?

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Interesting idea, David. There are a few companies, such as Lending Club and Prosper, that are doing peer-to-peer lending now, where ordinary people can invest in each other’s debt. Definitely a good idea on your part!

  • MexicanExecutive

    The key to paying off debt is to write it all down and immediately decide what is a priority and identify inefficiencies. I started off over $200k in debt several years ago..everything from credit cards to cars to home equity and more. It was a nightmare but I was took it all on like a man possessed. I immediately took out the stuff I know I did not need, even tracking how much was spent for a house cleaner and starbucks runs. I cut down expenses but eliminating the unnecessary things I was willing to do myself. It has been almost 5 years but I know have 10k owed left on my 2009 Prius @ 1.99% and I am about 3 months from paying it off. I have about $300K saved right now but have told myself that I would keep a good reserve in the bank in case of an opportunity to invest in property or other things when the opportunity presents itself. I continue to put away 50% of my income into savings. The fact is you need to have discipline. I do not have an MBA or any other higher level degree. Just perseverance and the desire to be self made. I think about each expense and multiply it times 12 months. i.e. cable bill? that’s over $1500 per year. Cell phone? $1800 per year. If you take the moment you are about to buy that fast food for $7, think about how many times you do that a month…15 or 20? add it up and multiply times 12. I look at every expense like this and it has become a fun game to me. I stop before I spend that money and have applied what I would have spent that day for a dinner of $50 and put it towards a bill. I put away another $1200 to the Prius this month avoiding a vacation I was about to buy. You can get out of debt faster than you think when you realize how much extra spending you do on things you have become accustomed to.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Hi there, this is a fantastic comment and a very interesting personal experience that you’ve shared. Congratulations on paying off so much debt! I have a question: Would you be interested in talking to me for a blog post that I’m working on? If so, please e-mail me at Ben at ReadyForZero dot com. Thanks!

  • impeachin2012

    Tell all of your friends you are in debt and lose your friends in how soon did she say?

  • thorny_lady

    10 years ago my now-ex left me holding the bag on over $50k of debt AND I had to fork over about $130K of my retirement that I had worked hard to put away (he never saved anything and charged up all the credit cards – part of the reason we are no longer together).
    First I cut my expenses by selling the house and putting all of my 1/2 of the proceeds towards the debt. Moved into a small apartment to save money. Then, I pumped up my savings and paying down the rest of the debt by living frugally (hey, one of the cheapest resources around is your public library — you can get books, movies, music for free!) and automating the savings and debt repayment through my employer and bank.
    Now I am deb-free except for a mortgage and I have over $500K in the bank.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Wow, that sounds like an amazing experience and a lot of hard work and good decisions on your part. Congratulations! Would you be interested in talking to me for a blog post I’m working on right now? If so, please e-mail me at Ben at ReadyForZero dot com.

  • mas8baller

    LOL I just don’t get into debt. Simple.

    • http://carefulcents.com/ Carrie Smith

      Great point!

    • Jett

      Gee, here I thought this was a blog where people were reading about others trying to get out of debt! If people never went into debt, then a lot of jobs would be lost at the very least. Go tell your PC the he shouldn’t have gone to med-school because he went into debt. Or the banks that they should close, you know, since that’s how they make their money. Debt runs a LOT of industries.

  • no money

    How did you do it? Was hoping for more details.
    Thanks, for sharing

  • Jennifer

    Has any1 heard of Dave Ramsey? Should check him out, he’s the MAN when it comes to being DEBT FREE….!

  • moanza

    I thought that being debt free would be a good move financially it wasn’t ! Your credit score is damaged. So keep this in mind before proceeding to debt free

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      In general, becoming debt free is very good for your credit score. I’m not sure what your experience was, but it sounds like it was atypical.

      • phoenixchick

        In my field, what I have experienced is that you have to use credit to show that you are a good risk. If you pay everything off and never use credit, you have no way of showing that you can manage making regular monthly payments. Also, if you close all of your accounts, that negatively affects the score, which could have also been the case for moanza.

        • http://www.twitter.com/bwfeldman Benjamin Feldman

          That’s a good point. Thanks for the comment. If you close all of your accounts then you credit report shows no “active accounts” which makes your credit score go down. This may have been what happened to the commenter above. Better to keep your accounts open (with no balances) unless you’re worried you’ll be tempted to get back into debt.

  • Haolejohn

    My wife and I have started our get out of debt race. We are 9 months into it. We’ve made a big dent in our debt, even after dealing with a very expensive emergency trip. The key for us (other than two incomes vs. one income) has been cutting out unnecessary expenses. We took jobs in the Alaskan Bush and eliminated all the lower 48 conveniences (Starbucks, fast food, etc…). This school year we plan on paying everything but house and student loans off. We have to use a credit card for groceries, but we pay it off each month.

    For us it was more than a higher income, it has also been a mindset change.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Wow, that sounds like a very interesting story! Congratulations on making so much progress. Would you be interested in talking with me for an upcoming blog post I’m working on? If so, please e-mail me at ben at readyforzero dot com. Thanks!

  • agsb

    Having a good paying job or retirements helps a lot!!!!!!!

  • vortex100

    How do you get out of debt when you are unemployed, have no income and your chances of getting a job are very difficult because you went to school to get an education, had your credit destroyed because you could not get a job to pay your student loans? I even got a job offer once, but it was rescinded when they looked up my credit report. How do I get out of debt?

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      I’m really sorry to hear about these challenges you’ve had to face. That sounds incredibly trying. While I can’t proclaim to have a magic bullet, my advice would be to see if there are any ways you can make money on your own (either via sites like Elance.com or via local part-time jobs). This article I wrote might help: http://www.military.com/money/personal-finance/4-ways-make-money-from-home.html. I realize that may not be a realistic option for you, but if not, maybe our resource centers can help: http://blog.readyforzero.com/resources/.

  • bsaunders

    I don’t understand why the need to earn more money is conspicuously absent from MOST writings on this topic. Sure, there are folks who have $500 in discretionary income that is currently being spent on the cable bill, eating out several times a week, and a membership they never use at the most expensive gym in town. Cutting those things out, yes, a matter of changing habits and biting the bullet. I gather the far majority of debtors are not in that situation and genuinely need to make more money.

    Also, I just don’t see cable as the easy target folks make it out to be – especially for families. In the 1970s, when I was a kid, a struggling family might make room in the budget for one or two nights out a month with the kids. TOTAL austerity for years and years has its own costs. It might have costed $40 to take a family of 4 to the movies, buy some popcorn and candy, and have some burgers afterwards. Today the movie alone costs $40! An $80 dollar cable bill replaces that night out and then some. Why is that not a reasonable value for maintaining a sustainable lifestyle during the debt payment period? If the family has 6 kids, the value is even greater.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      These are all good points, Barbara. Thanks for your comment. It’s true that each of us needs to find the balance that works best for us, whether it is earning more, cutting costs more, or making small changes. Sounds like you might be a good person to write a guest post on these subjects!

  • How to declare bankruptcy

    All of the information listed above is very interesting and very useful. Lots of people today are having trouble in their debt. They should take note about this article.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Thanks, glad you found it to be helpful!