The biggest milestone we've hit yet!

**Preston** · 04-01-2010, 02:35 PM

So I started our debt reduction process in July 2007. It wasn't until June 2008 I really started to focus, and wasn't until Jan 2009 I went nuts.

When this started, we had about $49000 in credit card debt. Medical bills, stupidity, and the list goes on. I didn't think we would ever see the light at the end of the tunnel.

Last week, I paid off the last of the credit card debt. And it's over. We pull in $3500 a month per our budget.

We went out to a nice Brazilian steakhouse and it was nice to be able to pick up the $115 tab (plus a nice tip in cash) knowing there was plenty of money in the bank to cover it.

But then we dove right back in... And here is how the next phase of our debt reduction goes...

We owed $11000 on a timeshare. 10% interest.
I applied for some new credit cards at 0% for 6, 9, and 12 months. So we are no longer paying interest on the damn thing. And I can easily 'snowball' those amounts and pay them off well before the interest kicks in. Savings of ~$1000 in interest.

And, psychologically, I find it easier to deal with 3 smaller debts than one big debt that the payment doesn't go down. That and the timeshare company doesn't have online banking access so I can never get an up-to-date balance without calling them. And they want to charge $5 a month to get a statement in the mail (which is BS) So I got rid of them. I like being in control and knowing how much is owed. The only thing I'm paying interest on (non-mortgage) is a student loan of $6500 at 3%.

And i get the cashback from Discover. Woohoo!!

**Mom2-3** · 04-01-2010, 05:28 PM

You paid off almost $50,000 in debt!! WOOHOO!!! Any secrets? Words of wisdom?

**mauimagic** · 04-01-2010, 05:54 PM

Preston, that is absolutely amazing!! Congratulations on all your diligence and hard work!!

**Michelle68** · 04-01-2010, 06:41 PM

Yay, Preston! That's an amazing accomplishment.

**Preston** · 04-01-2010, 08:17 PM

Originally Posted by Mom2-3

You paid off almost $50,000 in debt!! WOOHOO!!! Any secrets? Words of wisdom?

1) Spouse was on board from the get go -- not as intense as I was at first but made slow improvements over time. I made sure I acknowledged these instead of focusing on her faults.

2) I tried (and failed, but am still trying) to go car free and bike everywhere. My health has improved significantly because of this. I've saved gas too.

3) Do not make your budget too tight, you will splurge.

4) Take the time before you budget for the month to see the progress you've made since the start. And then remind yourself it wasn't for nothing and go back for the next round ready to fight harder.

5) One method I did, as I had a tendency to get overzealous paying off debt is when a card is paid off, leave it open while you work on paying off the next one. If an emergency comes up that is not covered by the EF, fall back on the paid off card and then go back and knock it out during the grace period. then back to knocking out the next card. when it is paid off, close the one that was already paid off. Does that make sense? this helped give me peace of mind.

6) Remember, debt is not a tool, it is only a way to steal from your future.

**Palooka** · 04-01-2010, 09:01 PM

Great job.

That's pretty cool that you can use your bike.

**craftypam** · 04-01-2010, 09:10 PM

This is what you worked hard to do to your debt

d

FANTASTIC JOB!!!!!!!!!!!!!!!! Doesn't it feel great!!!!!!!!!!!!!!!!

**bumplett** · 04-01-2010, 09:19 PM

great news!

keep up the great work! You'll be finished with those three in no time!

timeshares SUCK! ((even after the damn thing is paid for, you'll still have your annual maint. fees)) - we have a week in New Orleans, let me know if you ever want to trade to have somewhere diff. to go

**Greebo** · 04-02-2010, 08:52 AM

Fantastic! No problem at all here w/ juggling the debt for better rates, etc. It's the underlying habit change that matters. ROCK ON!

**Mom2-3** · 04-02-2010, 11:54 AM

Wow! You guys have done great! WTG

**Samigirl** · 04-03-2010, 12:34 AM

Wow...you've done a fantastic job. I'm very impressed!

**frugalfranny** · 04-03-2010, 02:44 AM

I am TOTALLY IMPRESSED!!!

WAY TO GO PRESTON AND FAMILY!!!!

**tommysofly** · 04-05-2010, 09:14 AM

Wow 50K in 3 years..

Congrats!!

**DukesAngel** · 04-05-2010, 05:47 PM

CONGRATS!!!!!!! I am really proud of you!

**Preston** · 04-05-2010, 08:57 PM

Originally Posted by bumplett

great news!

timeshares SUCK! ((even after the damn thing is paid for, you'll still have your annual maint. fees)) - we have a week in New Orleans, let me know if you ever want to trade to have somewhere diff. to go

We actually don't have a fixed week structure, we have the newer points structure which gives us more flexibility. We can do partial weeks and rent cars and stuff. But honestly, I think it was a bad move for us, but what is done is done.

I'm now looking at that maintenance fee as a 'vacation savings' although I know it isn't. Money put aside for this is for the vacation and I use it to pay for as many trip expenses as we can.)