70k in credit cards, paid off!

[Jessamyn]

I'm not much of a poster but I've been around a long long time. 4 years ago I bought a house while I was getting my master's degree. I made 65k a year. Somehow in the next 6 months I managed to accumulate $70,320 in credit card debt along with my 70k in student loans. At the end of 2009 the minimum payments on the cards and my mortgage and electric were more than than my take home pay. I cut everything out that cost money and I planned out my cash flow a year ahead of time. Using my very small savings of 3k, I managed to keep current on all my payments and bills, and I paid off all of the credit card debt in 3 and a half years. I have never been so proud of myself as I was when I made the last transfer to pay off the final amount.

I made a list of every item I bought that made up that 70k and as I paid down the balances I subtracted the oldest items. By the end, I was only paying off interest. Also during those same 3 and a half years, I met the most wonderful man and ended up married to him. I told him about my debt 4 months into the relationship with the intention of letting him go if it was too much for him. He stuck around, because I was working so hard to pay it off. And while he probably paid for more of our dates than I did, I never let him help me because it was my responsibility. And today, I have a credit score above 800. I still have student loans to take care of but my income did go up because of them and they are not at credit card rates. And I know I can do it, since the hard part is behind me.

The best part of it all? Going out and buying some new clothes, with cash of course! I had 1 pair of pants, a couple of t-shirts and a couple of sweaters and a pair of shoes with holes in the soles. I feel so much more put together now with just a few more outfits.

[treehugger]

That is an amazing accomplishment! Thank you for sharing that with us.

Kara

[catherine]

Wow! Thank you for posting this. I needed it today. I've been on my own debt reduction program (starting with $197,000 in 10/09). I've gotten it down significantly but recently hit a few "murphys" as Dave Ramsey would call them and also have been less attentive to my spending, and so I have got to get seriously back in the saddle.

I appreciate your sharing your experience!! It helps to motivate me.

[Weston]

Congratulations Jessamyn. For me, reading stories like yours is always the best part of the forum.

[Jilly]

Congratulations! Yours is an amazing story of dedication and results. Yay you!

[JaneV2.0]

Such a satisfying accomplishment--WTG!

[mtnlaurel]

I am so happy for you Jessamyn! Thank you for sharing your success with us!!!!!!

[fidgiegirl]

Jessamyn, so awesome! A real inspiration. It's amazing what focus can do for a goal - like Catherine, it was a good reminder for me as well.

[ejchase]

Congratulations, Jessamyn! It was very inspiring to hear your story.

[razz]

Wonderful to read about this effort and success!!!

[Florence]

:cool::cool::cool:Congratulations!!:cool::cool::co ol:

[fidgiegirl]

You know, I was continuing to think about this, and wanted to add that your comment about the clothes really struck me. Not only is it enough to focus on the goal but to REALLY cut all expenses. DH and I are good at lip service but not as good as actually doing . . . thanks again for the great reminder and inspiration.

[ToomuchStuff]

Good job. I do wonder if you got past the "somehow" to figure out how and why you got to that point. Understanding so that you won't repeat the mistakes of the past.

I've seen that, with my own family and don't get it.:confused: Neither do they, as they refinance the house to pay it off, only to repeat it.

[iris lily]

oh gads, that is FABULOUS!!!!!!!! Thanks for sharing, this kind of news always makes me happy.

[treehugger]

That's a great point, ToomuchStuff. This in no way diminishes the accomplishment of paying off that much debt, but going forward, if you don't clearly understand the how, then it will be difficult to avoid again (similar to the weight gain analogy we have discussed before).

DH and I are slowly but surely digging our way out of our debt (job loss + medical catastrophe + stupidity), and we have learned so much in the past few years, that I am confident we will never be in this position again.

Kara

[SteveinMN]

:+1::+1::+1::+1::+1::+1::+1::+1::+1::+1:

[redfox]

You know, I was continuing to think about this, and wanted to add that your comment about the clothes really struck me. Not only is it enough to focus on the goal but to REALLY cut all expenses. DH and I are good at lip service but not as good as actually doing . . . thanks again for the great reminder and inspiration.

Ditto several times over...

[Blackdog Lin]

Now that you've shared such a fabulous simple-living story.....I hope you'll join us more often. I know we can all learn from you.

[Tussiemussies]

Such discipline and dedication. Glad for you that you were able to chip away at this mountain of debt until you were done. That is a REAL accomplishment. :)

[Jessamyn]

Thanks!
Boy do I know exactly how I got into that mess. For starters, I wasn't paying attention to what I was spending. I had new house expenses, some of which could have waited, friends would come help paint or move and I'd have to feed them all. Book expenses from school, airplane tickets, a personal trainer, basically I had a lifestyle above my means. That was the whole point of the exercise of listing every penny I had spent on the cards. It felt good to delete them when paid but it was difficult and a learning experience to see payment going to two year old expenses.

I lost friends when I couldn't pay for dinner, family got mad when I said no and since I was too embarrassed to admit what I'd done, I couldn't give good explanations why. And I had no choice, for me, late payments and short payments weren't an option. I was a person of my word and I had told those cards I was good for that credit so I had to be. I think that was the most important moment of my life, that I was stronger and of my word more than I ever thought.

The lesson was learned pretty deeply. I still don't spend on anything. Going shopping was scary, the thought of paying $40 for a shirt makes me sick to my stomach. Whereas before it was just what you paid. I feel guilty when I make any kind of purchase without planning for it in advance. I bought two boxes of cat food and worried even though we now have plenty of money in the bank.
I don't think I could be that person again, even if I tried! Which I won't, it's too awful.

[rerun]

Good for you. Congrats on getting out of debt! DH and decided to pay cash for things when we got married. We just bought a second car paid in cash. I thought about if we had borrowed all of the money for the big projects we did in the last few years, remodeling the basement, buying two cars etc. and how much debt we would be in now if we hadn't waited to have the cash to pay for it. Keep up the good work! It feels so good to not have any debt. As Dave Ramsey says, "you have to live like noone else, so later (when you retire) you can live like noone else" (or something like that). Congrats again!

[Tiam]

I'm not much of a poster but I've been around a long long time. 4 years ago I bought a house while I was getting my master's degree. I made 65k a year. Somehow in the next 6 months I managed to accumulate $70,320 in credit card debt along with my 70k in student loans. At the end of 2009 the minimum payments on the cards and my mortgage and electric were more than than my take home pay. I cut everything out that cost money and I planned out my cash flow a year ahead of time. Using my very small savings of 3k, I managed to keep current on all my payments and bills, and I paid off all of the credit card debt in 3 and a half years. I have never been so proud of myself as I was when I made the last transfer to pay off the final amount.

I made a list of every item I bought that made up that 70k and as I paid down the balances I subtracted the oldest items. By the end, I was only paying off interest. Also during those same 3 and a half years, I met the most wonderful man and ended up married to him. I told him about my debt 4 months into the relationship with the intention of letting him go if it was too much for him. He stuck around, because I was working so hard to pay it off. And while he probably paid for more of our dates than I did, I never let him help me because it was my responsibility. And today, I have a credit score above 800. I still have student loans to take care of but my income did go up because of them and they are not at credit card rates. And I know I can do it, since the hard part is behind me.

The best part of it all? Going out and buying some new clothes, with cash of course! I had 1 pair of pants, a couple of t-shirts and a couple of sweaters and a pair of shoes with holes in the soles. I feel so much more put together now with just a few more outfits.

Pretty inspiring!

[Zoebird]

Congratulations on your *amazing* accomplishment!

I hope you get your $70k in student loans paid off swiftly as well. Sounds wonderful!

[jennipurrr]

Thanks for sharing your amazing story!!!

[Tradd]

What good news! Congrats on the hard work!

[bke]

That is really impressive! Keep up the good work.

[Selah]

Wow, congratulations and thank you for sharing your wonderful story with us, Jessamyn! You are a true inspiration!

[clara24]

Definitely an amazing accomplishment where some of people can't do.In Helsinki Finland many people are still paying their debt to some perintätoimistot (http://www.duettogroup.fi) or collection agencies which they are really having difficulties because of the interest rate hopefully they have a great plan on paying their debt in order for them to be a debt free soon.

[Radicchio]

Jessamyn, I so appreciate your last post explaining where the debt came from and the mindset that enabled you to do the hard work of paying the debt off. I applaud your honesty and character in taking care of your obligations in an honorable way. In the past, I've seen other sites talking about fixing bad credit, paying off bills, etc.; and often they recommend ways of paying less than the total due or even advising which bills a person could get by without paying, without too much damage. It was, frankly, shocking to me that people somehow felt entitled to walk away from a mess they had made themselves. Your willingness to sacrifice in order to keep your word is admirable.

I realize, of course, that there are some situations when a person can't settle all the debts as you have done and, perhaps, defaulting on loans is unavoidable. But it should never be the first option---only a last resort. Not everyone takes responsibility like you have, though, and I'm always heartened to read accounts like yours.

[Joyous_5]

Inspiring for sure--thanks for sharing your story here! :)

[befree]

Awesome!! And if you can pay off $70,000 in 4 years, that means you can save up enough for one heckuva big emergency fund in no time!! You are doing so well, and are on your way to living debt-free. What a high that will be!