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My Story (of How I Paid Off More than $100K in the last five years)

My story starts like many… Hubby and I working, living a “normal” life, coasting along. We had always been casual about money – often running a several thousand dollar balance on credit cards. Hubby lost his job at the beginning of the 2008 recession and was out for a year, then a second time in 2010 and was out of work for 14 months plus I had some furloughs/reduced hours at work at that same time. Those job losses took a toll on our finances. Once he found a job the second time, I sat down and took a hard look at our finances. They had ballooned up to an unsustainable amount. I was determined to get everything paid off. In the last several years (about five for serious effort), we have paid down close to $100,000. Here’s a little background on how we did it.

Step One: Identify Where We Stand

I put together a spreadsheet to track all the debt, including the interest rates, monthly minimums, and totals. I also participated in some paydown debt challenges on various frugal forums to try to keep myself motivated. I joined here a few years ago.

Step Two: Make a Plan

I input all the information into a couple debt calculators (undebt.it is a particularly good free one), which allowed me to slice and dice different options. What would be the fastest way to pay down the debt? What would be the cheapest? The debt calculators looked at paying down the lowest balance, highest balance, lowest or highest interest, etc.

Step Three: Lower Your Interest Rate / Monthly Payments

We called almost every vendor (tv, phones, credit cards, etc.) and asked for lower interest rates, better deals, etc. We often threatened to leave and go to a competitor. We cut things we didn’t need. In some cases, we closed credit cards and worked out payment plans. This saved us hundreds if not thousands of dollars. We also chose to do a consolidation loan where we were fortunate to get a very low interest (2.5%) loan instead of high interest credit cards. This has made a huge difference in how fast we have been able to pay down our debt.

Step Four: Bring in More Money

I started a side business and really started focusing on it more in January 2014. My side business has been a HUGE factor in getting the debt paid off faster. It has actually grown to bringing in several thousand dollars per month (enough that I might end up making it my full time job at some point). The truth of the matter is, if you are living paycheck to paycheck, it’s going to be a challenge to pay off large debt. You simply have to look for ways to increase your income – whether working more hours, getting a second job, starting a new business, selling things, or whatever). Put your thinking cap on and bring out your inner entrepreneur. Don’t forget to take income taxes into account on extra money you make.

Step Five: Expect Some Setbacks

Even after getting our personal loan and thinking we were “in the clear” on our paydown path, life happens. Circumstances intervened (accidents and breakdowns) where we ended up having to replace our two vehicles in one year. We were not expecting that and took on that additional debt. But it was what it was. We also had various house projects that came to a head. We’ve replaced and generally paid cash for our furnace, air conditioner, and other items.

Step Six: Track Your Progress

Every single week, I recorded every single payment I made. I made a little visual where I could X out the numbers to show my progress. I found it more motivational to drop zeros (so essentially I was paying down $100 instead of $100,000). I shared my progress with others so they could cheer me on. I have been relentlessly positive through this entire time (annoyingly so according to my husband LOL). Because we were snowballing (paying off one debt and adding that debt's payment to the next debt's monthly payments), our paydown rate increased. So in the early years, it was being paid down like $10K a year, but in 2017 I paid down $18K in five months.I was super excited when my debt paydown screen (showing future payments) finally fit on one screen. :)

Step Seven: Celebrate Milestones

Do something to celebrate milestones as you go along. When I hit significant milestones (for me that usually meant passing a “X0,000” number, I did something to mark it. It might be a dinner out or some other small item paid for in cash. People can’t happily live in austerity forever. We need to include some fun along the way. In our case, we actually did a big celebration of an Alaskan cruise last year (paid for in installments with credit cards that were paid off before any interest was incurred) for our 25th wedding anniversary.

There is a lot of free fun to be had and there’s much to be said for making yourself a happy homebody, but it’s also nice to know that you have budgeted to be able to splurge on some things. Just don’t make it a too regular thing and be sure you can pay for it.

Friday I was thrilled to celebrate the payoff of that personal loan I had mentioned (a year early!). I am now down to just my husband’s car loan to finish off, which I expect to be done in July or August and the mortgage, which we recently refinanced to a 4 year earlier maturity.

This has been a long road with lots of potholes along the way, but lots of beautiful views too. Enjoy the journey. This is your life. Your life is NOW – it doesn’t start “after the debt is paid off”. Practice patience and keep plugging away. You’ll get there too!
 

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Discussion Starter · #2 ·
$100K paid off and not one note of congratulations? Tough audience! Thank goodness some clicked way to go or I'd be completely demoralized. LOL :D
 
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so what are your plans now that the debt is gone? Saving for retirement, a trip, college...??? Cutting back on work hours, new house?

And BTW, CONGRATS!!:vs_rocking_banana::vs_clap::1partyguy::partyhat4::vs_bananasplit:
 

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Congratulations on your successes! I'm sorry I missed your post earlier this week. You have accomplished so much.

We will be celebrating 10 years of living debt free, later this year.
 
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$100K paid off and not one note of congratulations? Tough audience! Thank goodness some clicked way to go or I'd be completely demoralized. LOL :D
Ah... don't be demoralized. Myself ... I have very little that shows up on my newsfeed. I do a lot of my reading in the archives and bring stuff back up from that deep basement. I just saw your post.
Congratulations! I used to read your other thread of your side business. I was impressed enough I googled you :) No, not stalking you. I was just very impressed. Even more so after I googled.
 

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Discussion Starter · #6 ·
so what are your plans now that the debt is gone? Saving for retirement, a trip, college...??? Cutting back on work hours, new house?

And BTW, CONGRATS!!:vs_rocking_banana::vs_clap::1partyguy::partyhat4::vs_bananasplit:
I'm not quite sure.

I've been building up my side business with a thought of potentially moving to it full time. There were a few things I wanted to do prior to doing that and this was one of them.

I want to build up a little more in an emergency fund before I make a final decision.

But I feel so much better now if anything were to happen to my job or my husband's job.

I'd like to get financially independent, so most likely much will go into retirement funds plus we have some house projects we need to get done over the next few years.

Hubby wants a $60K truck, but that's not happening.
 

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Congratulations on your successes! I'm sorry I missed your post earlier this week. You have accomplished so much.

We will be celebrating 10 years of living debt free, later this year.
Woo hoo!!! That's an awesome accomplishment in itself!
 

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Discussion Starter · #8 ·
Ah... don't be demoralized. Myself ... I have very little that shows up on my newsfeed. I do a lot of my reading in the archives and bring stuff back up from that deep basement. I just saw your post.
Congratulations! I used to read your other thread of your side business. I was impressed enough I googled you :) No, not stalking you. I was just very impressed. Even more so after I googled.
LOL I'm just kidding on the demoralized, but it cracked me up that no one had left any comments.

Like you, I am often visiting some of the older threads. So much great information out there and much of it has fallen by the wayside.

Thanks LOL, though now I'm wondering what's coming up with the google search. Guess I'll have to check. ;)
 
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