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Eight years ago my husband and I were both out of work, and deep in debt. Today we are debt free (aside from utilities, taxes, and living expenses).

How did we do it? The same way the rest of y'all are: instead of taking on new debt, we started paying off what we owed. There are a lot of books and plans out there for helping you get out of debt, but I didn't know about any of that back then, I just knew we needed to get out of the hole we were in.

We canceled services we didn't need. We went to basic cable. We dropped long distance on our phone. The lawn service went away. I stopped renewing magazine subscriptions and canceled AAA insurance because we already had a similar plan with our car insurance.

I cut up all the credit cards. It's been cash or check ever since.

I made payment arrangements with whatever companies would let me do it. I was up front about the situation and honest about my desire to pay them. In some cases I paid $10 or $20 a month for over a year to settle the debt. Unfortunately I think creditors are a lot less willing to do this now than they were a few years ago, and will just send you to collections after 30 days.

Evey month I looked at how much (or little) money we had and divided up the bills as best I could. A lot of utilities are happy to get anything from you and (at the time anyway) did not shut off service if you were making monthly payments of any amount toward the bill. We didn't qualify for low income plans for anything because DH had made 'too much' money the year before.

I started "snowballing" on the debts. I didn't know that was what it was called, it just seemed sensible to start throwing money at them to get rid of them. I began with the smaller ones, just to be able to reduce the number of overall debts, and to get a feeling of accomplishment. When I finished one, I put the "extra" into the next debt.

Through it all, we never missed a car payment. If we had to ignore everyone else and go hungry, we made every car payment on time. The car was absolutely essential to DH being able to work.

I went to a credit counseling service. What a joke. After looking over what we owed and taking into account the crap job my husband was working at that point they told me we didn't make enough money to qualify for their service. No duh! If I had money I wouldn't have been there looking for a solution.

We got extremely lucky in a couple places. We were living in a house owned by my FIL and he was lenient on the 'rent' we owed. Otherwise we might have ended up on the street. The people at our small bank knew we had problems and looked the other way for a couple months when our balance was negative. We had had some problems with bounced checks (my husband was doing the over-the-phone check thing when credit card companies called, and causing overdrafts and bounced check fees) and it took a while to get the cash scraped up to settle that. And I got my husband to stop making overdrafts on the phone.

I tried finding work but things were in a slump here, I couldn't even land a crappy retail job at holiday season that year. I ended up selling crafts on ebay for a while, and did ok ( couple hundred a month) but that market has since changed dramatically, and pretty much dried up now.

I put in a vegetable garden. It didn't produce a lot of food, but it made me feel like I was doing something positive.

The toughest part was dealing with the credit card companies. Some of them were easy to work with. They helped us set up payment plans and settle the accounts. We had one company that was just absolute hell to deal with. They'd lie to us about the plans just to get money, and then we'd find out 30 days later we were not in forbearance and our money was just gone into the black hole that had been created. We got absolutely screwed on the interest rate, it more than doubled our original debt. At one point I sat down and did the math with an online rate calculator and figured out that we would NEVER be able to pay off the account during my husband's lifetime. And at that point I told them to go to hell. We had nothing to lose (no house, no car -- technically the bank owned it) so I had no fear about what would happen at this point.

We ended up settling a few years later with a collection agency, for about what the original debt was. By that point we had come into some money due to a death in the family (luck again) so we were able to pay it and get rid of it. But that still left us broke, with other debts to pay.

Once DH got a job again, after that first year out of work, it got a lot easier. We still did without for a long time, and I still threw as much money as we could into the bills. The last few years have been easier, we've been able to buy new things (within our budget) and take some short vacations (paid in advance, no credit cards). We've really adapted well to living within our means. It's surprising how easy it is to do that when you don't have huge credit card payments sucking you down.

So, for those of you struggling with this, keep with it. I may be a long, dark road, but keep moving forward. It may seem absolutely hopeless -- I was in tears myself more than once -- but you can succeed. Just keep going one step at a time. Soon enough you'll be running for the finish line!
 

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I love to read these kinds of stories! I swear, I felt your fear, your despair, your anger and finally, your triumph. Thank you for sharing your empowering story.
 

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I wanted to say thanks for giving us such a detailed look at your struggles, and finally, at your success.
thanks
 

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Great post! Thanks for taking us through your journey!
 

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Thanks for sharing your story. :)
 

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You succeeded and I am glad that you told us your story. It is very uplifting and helpful to all of us that need the extra nudge. Thank you.:)

Monner
 

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Wonderful post!! Thanks for sharing your journey along the way.
 

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Wait a minute you paid off your debt and made your life better by working hard and sacrificing?!? Come on that's impossible we all know that you need to have a BAIL OUT to be rescued financially. You did it wrong! Or maybe it is people exactly like you that need to be invited to speak to every single one of these CEO's that keep going up to Capitol Hill demanding a bail out. You are an inspiration and exactly where I hope to be when I have put in my own years of hard work and sacrificing. Thank you so much for sharing!
 

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What a truly inspirational story. Thanks for sharing!!
 

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Thank you for sharing your story.... what an inspiration you are!
 

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Discussion Starter #13
Wait a minute you paid off your debt and made your life better by working hard and sacrificing?!?
I have to add, for those who are just starting to figure out what kind of trouble they are in, that there is no easy solution. It's very frustrating when you're in over your head to find out there is no life preserver coming. Your life is out of control and you're panicking, and there must be a way out of this mess. Those self-help books and financial advice websites can't help you. They'll give you tips on saving money, or investing wisely, or tell you how to budget, but they won't have any quick fixes or instant cures for being in debt and out of money.

YOU are the only one who can do it. You have to swim, or at least tread water. You'll cry and you'll swear, and you'll know deep in your heart that it's hopeless... but it isn't. You'll come up with the money to pay the bills. You'll work extra hours, and spend less. You'll give up dinners out, and movies, and new shoes and other things you love. You'll spend months or even years thinking you were stupid to get into this position and that you'll never have money again to enjoy the things you used to and you'll feel bad that you're brown bagging leftovers while your friends eat out for lunch.

And somewhere along the way you'll realize you found the strength to take control of your life again.

I'm probably preaching to the converted, so I'll just wish everyone the best of luck with their own goals. It's not easy. If it was, everyone would be debt-free.
 

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Thanks for sharing your story! It's helps keep the rest of us on track : )

leezza
 

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Wow, thank you for sharing. So inspirational and accurate. I think a lot of this mindset and determination comes about from just being tired of being overwhelmed and out of control. I saw so much of myself in what you were describing. I think when you truly come about, it's all about finally taking control and being a powerful (and determined) force in your own life. It's funny that some people see frugality as being weak when it is so much the opposite!!
 

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Just found the post. Thank you for sharing your story. You are a very brave woman and now should know that you can accomplish anything!
 

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I know this is an older thread but I couldn't have read it at a better time. I really needed this right now...our finances seem out of control at the moment and I really needed the kick in the pants this thread gave me! We were behind on our electricity bill and we were on the verge of it being cut off. I had the money to pay it in full but we were also on the verge of having our satelite tv cut off as well (and I love me my tv time! :) ) I knew that if I put half of the money I had on each bill that I could probably forestall them being cut off BUT I decided to be good and pay off the electric in full and hope that the satelite would stick around until I had the money. I was feeling very proud of myself about that...until the other day when the satelite was indeed cut off (10 mins before my show ended no less :( ). I having been feeling very down about that and wondering if being 'good' about this debt reduction is even worth it if I'm missing out on one of my favorite things. But now I've read this thread and it's given me renewed drive to stick with being 'good' and getting things under control!

Thank you! Thank you! Thank you!
 

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I know this is an older thread but I couldn't have read it at a better time. I really needed this right now...our finances seem out of control at the moment and I really needed the kick in the pants this thread gave me! We were behind on our electricity bill and we were on the verge of it being cut off. I had the money to pay it in full but we were also on the verge of having our satelite tv cut off as well (and I love me my tv time! :) ) I knew that if I put half of the money I had on each bill that I could probably forestall them being cut off BUT I decided to be good and pay off the electric in full and hope that the satelite would stick around until I had the money. I was feeling very proud of myself about that...until the other day when the satelite was indeed cut off (10 mins before my show ended no less :( ). I having been feeling very down about that and wondering if being 'good' about this debt reduction is even worth it if I'm missing out on one of my favorite things. But now I've read this thread and it's given me renewed drive to stick with being 'good' and getting things under control!

Thank you! Thank you! Thank you!
hello baja sarah,
it could be a blessing (and god doing for you what you could not do for yourself) that that cable got cut off.

Welcome to the village. I get my frugal batteries charged here.

have you considered a part time job? your son is ten now, and you could slam this debt if you worked really, really hard for a year. daytime delivery of pizza while he is in school, or sharpen your career skills in job retraining?

Do you know about dave ramsey and mary hunt? They are the financial "gurus" i follow.

I find it motivating to listen to the Dave Ramsey free archives on the computer while I do my chores. go to his site- top right corner.
 

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hello baja sarah,
it could be a blessing (and god doing for you what you could not do for yourself) that that cable got cut off.

Welcome to the village. I get my frugal batteries charged here.

have you considered a part time job? your son is ten now, and you could slam this debt if you worked really, really hard for a year. daytime delivery of pizza while he is in school, or sharpen your career skills in job retraining?

Do you know about dave ramsey and mary hunt? They are the financial "gurus" i follow.

I find it motivating to listen to the Dave Ramsey free archives on the computer while I do my chores. go to his site- top right corner.
I have been considering a parttime job. I do some babysitting most weekends...We usually just spend the money but now I am thinking that I am going to be putting that toward debts. I don't drive so that limits me a little in that I can't get a delivery job...although I am going to be looking into newspaper delivery...I can do that walking (and it will help me with my weight battles :) )

I'm upset about losing the tv - and really miss it - but I am very proud of myself that I paid the more important bill first. I had some trouble falling asleep last night because I was laying there thinking of ways that I could get the debt paid off in the fastest way possible. This site can be addictive! There is so much information...I love it! And I'm going to be checking out the Dave Ramsey site in a few mins.
 
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