How $20 changed my life

[TxZen]

We were in CC Debt for over $65K...let that sink in for a moment. 5 years ago, I made it my mission to get out of debt. I would take $20 extra a month and put it towards the 2 highest interest cards we had. I remember thinking How the heck is this going to happen? I felt like no progress was being made but it all started to snowball as we paid off each card. It took about 15 months before we saw a good dent.Eventually, we were able to make it $40 extra a month, then $80 and so forth. We always took 10% of whatever extra money we might come into and put it towards debt. We did silly things like not eat out for a month and put that money towards debt or sell off a few items we were not using. I just paid the last of our CC Debt off this month. Now, that last payment was $1500 because we took our refund and paid it all off. We decided instead of saving the refund to just get it done. I can tell you, small steps get to bigger things in life. It's such a nice feeling to know all we owe is the house, normal bills, insurance, etc. Don't get discourage!!! It can happen and when I add up all the interest we would be saving over 20 years, it's over $21,000..isn't that bananas?

[TVRodriguez]

We were in CC Debt for over $65K...I just paid the last of our CC Debt off this month.

WOOHOO!!!!! Congratulations!! That's awesome. Well well done. :cool:

[Teacher Terry]

Awesome!

[lessisbest]

That's a great job....! You should celebrate. :)

I found this from Kiplinger and wrote it in my "Book of Odd Knowledge" #3, to remind me "cash is king".

"If you have a credit card balance of $5,000 with an APR of 14%, and you only pay the minimum of $100, it will take 22-years to pay off the debt in full, according to a Federal Reserve credit card calculator. You'll also hand over $6,110 in interest. Boost your monthly payment to $150, however, and you'll be debt free in 4-years and pay $1,369 in interest."

It also goes along with the "5 Only's" I found someplace and also added to my book.

-Only buy what you need (but everyone can justify nearly anything).

-Only buy what you can pay for.

-Only buy after you've compared prices.

-Only buy something after you've put thought into it.

-Only compare yourself to yourself - not others.

[Francie]

Awesome, to be sure!

We've never had an exorbitant amount of debt --- just usual cc debt, a couple of thousand, which we usually only paid the minimum payment -- plus, of course our mortgage --- but we got really really lucky. DH retired, we sold our house at the top of the market, paid off all our debt, moved, and paid cash in a low market for a house here. We are totally 100% debt free, not by our own efforts, but by a really fortuitous housing markets in both places. And we are carefully not getting into debt again. Retirement is good. Excellent, actually.

[TxZen]

Some of that was a student loan, around $5k and unfortunately, an ex-wife who was opening CC cards in her name using hubby's social. We caught her and reduced child payment to her to practically nothing. :)

[TxZen]

Oh and to say, at 40, I want for nothing, really. We need a new mattress set and we are looking for a good used mower but other than that, we have everything we want. I only go to the store for food and basic necessities now. It's nice. :)

[RoseFI]

TxZen, KUDOS! I had similar experience (and numbers) with debt snowball method combined with 9Steps. In 2005 I set a goal to be free of CC/installment debt by 2012. Got free by mid-2008, and my new SO said, let's make that 2012 goal ALL debt for both of us. So we did. TxZen, I don't know how long you've been debt-free, but can you describe what a quantum shift it is? In my experience, it's a quantum shift to get out from under that CC load, and then it's a further quantum shift to get out from under ALL debt -- wouldn't you say, Francie? I can't really describe it to people, I just say REAL FREEDOM, and that they just have to trust me that it's a goal worth reaching for. Not a change in terms of lifestyle, but in a more existential kind of way. People somewhat get it when I show them a compound interest graph, and then I turn it upside down and say -- this is what you are spending on interest, that you could be putting toward opportunities instead. (Really bums out the student debt-holders when I say that. Everyone else tells them student debt is an investment, not a liability. But of course people say the same with mortgages.)
It's like, :treadmill:not only have you stopped digging deeper into a hole, you are out of the hole completely, and the world rolls itself out under your feet to take you in whatever direction you'd like to go. The game is rigged, and all the sudden, you become one of the people it's rigged for -- making it all the more obvious how the game is rigged. WEIRD. Suddenly the moral dilemma regarding repaying debt becomes a moral dilemma regarding how you invest your savings, and if you use it to perpetuate the game, or to change it...

[TxZen]

I told my hubby this is the first month I had nothing to pay out (everything else is on auto pay) so I now have an hour of my time back. Second, I see stuff, things, food, whatever and I see $$$ and I hesitate when I shop. I double check my cart before I check out now and I really try to stick to a list, so I am not double buying and it's only what we truly need or use. I also see how people define success differently- it's not a title, paycheck, car, house, family name, who you know..it is truly freedom to be with my little family, happy, healthy, doing the things we want to do and not having to worry. Life is WAY to short. I can now enjoy getting my Masters because I am not pinching pennies to pay bills (I have a GI Bill paying for school, so no out of pocket, except gas and food, which I will take with me.) I delayed school and stayed in a horrible job because I was trapped, which compromised my health and wellbeing, which rolled over to family, and you see, now I have stopped the bleeding. It's awesome!!! We are also more focused on living smaller, even less stuff, working on our health more, being more charitable/volunteering, travel locally, and yes, even just to sit home and watch a show I like because I am not working crazy hours or extra jobs anymore. That is nice too. :)

[gimmethesimplelife]

Congratulations! It's such a great feeling seeing debt vanish! So liberating, and it gives you more options in life instead of being chained to a situation in order to keep debts current. Rob

[Tussiemussies]

Congratulations...it must feel so great to have that ball and chain of debt off of your neck!!!

[Lainey]

TxZen, thanks for telling us, it's always very inspiring to hear these stories. Great achievement!

[jp1]

Congratulations on a job well done.

This can be added to the thousands of similar stories that could be summed up: "Once upon a time, a person figured out that being in debt is a very bad harmful thing. The End."

As most of the people on this forum know, it's far better to let the reality of compounding interest work IN your favor instead of AGAINST it. Once one sees this in action they never make that mistake again. Kind of like how people who have lost important files to a hard drive crash learn to never again not back up their files. Once the lesson is learned it's a mistake that smart people rarely repeat. But trying to teach someone that lesson in any other way is very difficult. A lot of people seem to only learn it on their own the hard way. For this reason banks will never run out of paying customers.

[catherine]

I love this post! Congratulations! Thanks for sharing it. So true how those little things add up.

[Float On]

Congratulations!!! I was debt free for a few years and then sadly took on debt again, we're knocking it down and this is the last time. Always love to hear about people reaching debt-free status. It keeps me going.

[flowerseverywhere]

Wonderful. And not eating out is not silly. To this day, years and years being debt-less I find it hard to spend money on overpriced food that who knows how it was prepared or handled. It is quite smart in fact.

$65,000. Aaaaack.....

[razz]

Wonderful post to read and you deserve all the congratulations for the hard work and discipline.

[TxZen]

Thank y'all. It means a lot because I can't go around telling my friends "HEY I am out of debt!" They don't understand. LOL I love that we all get so excited for each other.

[TVRodriguez]

I also see how people define success differently- it's not a title, paycheck, car, house, family name, who you know..it is truly freedom to be with my little family, happy, healthy, doing the things we want to do and not having to worry. Life is WAY to short.

YES. I am down with defining success how YOU see it, not how it is often portrayed.

[ToomuchStuff]

Congratulations.
I certainly don't understand the silly comment. I do think it was a Suzie Orman book I picked up somewhere (garage sale/damaged freight store), that recommended putting ALL your change in a jar and putting that towards your CC debt, every month. I haven't used it for that, because I am the type to pay it off every month and have for years. I think the last time I had CC debt that lasted more then the next pay period, was when I first bought my home and bought remodeling supplies as I found great deals on them.
Never understood how people get all that CC debt, or those credit limits.:confused:
Now I will say I have used the change thing, as a fun money thing (put it in a machine for an gift card for something I want, put it in debit card account, etc).

[TxZen]

We are using change or any money under $5 into an account for a pool someday. We don't want anything extravagant but just to cool off on the hot Texas days. We have a nice amount in there already. Our plan is for 2 years out from now to get one. :)

[Rachel]

AWESOME, TxZen!!! What an accomplishment! Congratulations!!!