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My Get Out Of Debt Success Story – $70,000 In Four Years

by The Happy Rock on May 15, 2007

brokenchains.jpgThe title of the site mentions gaining freedom through personal finance, so it is about time that I share some of our journey. The family’s finances are now on auto pilot, but that is only after 4 years of blood, sweat, and tears. The idea is to not only share the overview of the last 4 years, but also highlight the key concepts that we encountered while paying off over $70,000 in debt.

One would think that defaulting on a Sears credit card freshman year in college, and then having to get an 8% deferred interest student load to finish sophomore year would have changed my life. Well it didn’t. What it did do was set the stage nicely for my vengeance against debt. The chains started to loosen during my two year engagement as we started preparing for marriage. Take a look at the post on the book that started most of our great conversations during that time. What happened was that we began to evaluate our thoughts, philosophies, and relationship towards money. This evaluation started to give us power and was our first step to financial freedom.

Evaluate Your Relationship with Money - During many long conversations, we explored what we learned in our family of origins about money, how we currently operated, and what we thought money would look like when we were married. Our eyes were opened and we felt like we could have power over money and not let our finances control us. With my brief sordid history with debt and my wife’s loathing of credit cards, we were encouraging each other to despise debt(Step 2)

Despise Debt - Shortly after we were married in October of 2002(paid with $10,000 CASH), we had about $72,000 in debt. 70% school loans and about 30% in cars. We rented a reasonable apartment for a year, but were still feeling the bondage of the debt on our life and relationship. Frustrated, we started randomly attacking our debt with extra payments. This is where I came across Dave Ramsey, and was inspired to learn as much as possible to help us out.(Step 3).

Get Knowledgeable – Dave Ramsey’s book launched me into the world of personal finance. I checked out arm loads of books from the library, and devoured anything and everything I could find on the subject. I eventually returned to the Ramsey Snowball method. It suited me and I enjoyed the motivation his free streaming radio show provided. The best part was the simplicity of the plan and the ease at which my wife to climbed on board. With the new found plan, and all of the other information I was soaking up we began to take control of our finances(Step 4).

Take Control of Your Finances – We were renting DINKS(Dual Income No Kids) armed with a pretty shovel to dig out of debt. We watched our spending, trimmed our expenses, and put every extra penny towards debt. We learned how to plan, save, and spend CASH on larger items. We set up Microsoft money, created a budget, and communicated about how we were spending our money. The growth of control bred more motivation and energy. We sold our junk on eBay, and were able to put a $1,000+ towards debt each month. The debts began to fall, and with each one we became more focused. We even saved for a small down payment on a condo. An amazing thing happened when we got down to under $30,000 in debt…a world of options started to open up. We could envision a great future, and it seemed attainable. Things like working for myself, pursuing jobs we wanted, and having a family were definitely things that were within our grasp. Now that we were in control, we could have perspective on our life(Step 5).

Gain Perspective - In about three years, we were debt free; $24,000 a year towards debt!! As our money became our own and not the banks, we talked a lot about were we wanted to go in our lives. It was a wonderful feeling to realize that we could seek things that we truly valued in life. We saved $10,000 for the adoption of our son, increased our giving, and started building an emergency fund. In about 4 years our lives, finances, and marriage had been transformed. What an amazing ride it was, and journey is just beginning. As Dave Ramsey says : “We changed our family tree”. Our lives and the lives of our children will feel the effects of the last few years for a long time.

{ 17 comments… read them below or add one }

Ed B May 15, 2007 at 4:24 pm

These are great tips and paradigms to achieve the essential victory over debt. You have influenced me regarding this issue. THANKS.

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Fabulously Broke June 21, 2007 at 12:41 pm

Here’s hoping that’s me and my husband in 2 years, to clear about $30k in debt. I know I can do it on my income alone (he doesn’t work), and that it’s feasible. It’s just a matter of discipline, and putting $1500 towards debt each month, scrimping, $100 fun money for each of us, and cooking in bulk at home more…

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TheHappyRock June 26, 2007 at 12:47 pm

Fabulously Broke,

I think it will be you in two years. It sounds like you are forming a good base on which to attack the debt. The more income you have, the faster and easier it will be, but it sounds like you have a plan. Just work the plan.

I would also offer the advice to truly find your reason for getting out of debt(kids, security, values, etc). Let the reason drive your energy and motivation.

Thanks for the comment.

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Vitaliy April 28, 2008 at 6:34 am

It’s very informative article, thank you.

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Rob From Debt Relief USA August 11, 2008 at 11:25 am

Thanks for sharing, a very informative post.

We’ve found that the snow-ball method is a very popular way in reducing debt.

Firstly, write down all your debts with the least amount owed on top. Then, concentrate all your efforts into paying the smallest debt first. Once that has been paid off move onto the next smallest debt and so on.

This approach instils a very positive mental attitude to managing debt and ultimately getting back into the black again.

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Breakaway August 21, 2008 at 10:44 pm

Wow… that is so inspiring…. right now my wife and i are just focusing on our credit card/loan debts… then cars and student loans will get tackled. But finding out that it is doable is very inspiring. I should go install Microsoft Money.

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Glory September 9, 2008 at 4:04 am

Your example will expire all people who are in debt now, I think

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Lissie October 3, 2008 at 5:31 am

Its pretty sad how so many people think that having thousands of credit card debt is normal! They obviously never sit down and work out the amount of interest that they are paying on that debt :and probably for things that they don’t value very much either. Inspring story

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sensiblefinance.co.uk October 9, 2008 at 5:05 pm

Really honest post happyrock! I think it’s the feeling of being trapped that really gets people. After been stuck in the debt quagmire myself . . . I’ve learned that the one thing I ever really crave is freedom . . . i.e. no payments owed on a monthly basis. This will all be cleared by the time I’m 30 . . . then I can go and live in the financial freedom I crave.

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Money Funk October 29, 2008 at 12:03 pm

Your story is truly inspiring. I also found and enjoy Ramsey’s Snowball method. I like the simplicity he offers in his guidance.

My husband and I are applying the Snowball method to our $90,000 worth of debt (doesn’t include the mortgage). And although I am only in my 9th week, I can tell its going to work. We also plan to be out of debt in 3 years.

I actually look forward to the paychecks coming in because they are directed to our mission of paying down that blecky debt. :-)

Love your site!

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Financial Samurai October 10, 2009 at 8:19 pm

Good stuff guys! That’s a massive amount of debt to pay off.

I’ve got $31,000 in debt and have the cash to pay it off but would you if it only costs 2.65%?

Without giving too much away, I have at least 5X the debt in savings.

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Car Insurance Phi January 4, 2010 at 6:27 pm

Just ran across this article and had to read it! Wow- you and your wife did an amazing job and I’m sure taking that journey together to pay off your debts only made your marriage stronger as you guys learned how to deal with finances as a couple. Such an inspiring story for others out there and myself as well! Thank you for sharing.

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Mark Andrew May 20, 2010 at 7:19 am

It is so inspiring…. right now my wife and i are just focusing on our credit card/loan debts… then cars and student loans will get tackled. But finding out that it is doable is very inspiring.

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Debt Freedom Plan July 26, 2010 at 10:22 am

What a great story. I’m working on my own debt reduction and its fantastic to know that with some hard work I can one day get out of debt too.

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congratulations! on forget a debt(ing) December 26, 2011 at 8:23 pm

Great job putting your debt burdens behind you. Nothing like finding some relief when you forget a debt on your own and get positive results.

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Kathleen December 31, 2011 at 1:37 am

I love reading stories like this. Good on you both for doing such a great job and staying focussed. I am on my own debt reduction plan and am feeling all the good things that you mention above. I should be debt free in about 15 months and have been hard at it for the last 14 months. I search the internet for positive success stories such as yours and am often emotionally and philisophically encouraged by the stories I read. Thanks for posting yours and good luck with your future.

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Jane June 16, 2012 at 7:50 am

Thank you for posting this! It’s blogs like these that have helped me decide to pull the trigger on tackling our own $99,800 debt…I just started my own blog for accountability and hopefully to inspire others like you have.

Thanks again!

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