Just seven months ago, I was on the edge of bankruptcy. I had more than 10K in credit card debt, owed more than 7K on an expensive truck payment, and had more than 35K in student loan debt.
About three months ago, I hit my first milestone: I sent in the final payment on my credit card debt, and I have kept it paid off ever since. It was an enormous relief to not have that cloud of debt over my head any longer, but I still had some mountains to climb.
This morning, another cloud went away, and the sun is shining in, a bit brighter this time.
I walked into the financial institution that held the loan on my truck and wrote them a check for the entire outstanding balance on the truck. I now own the vehicle free and clear – it’s mine. Even better, I no longer have that $300 a month truck payment weighing over my head.
Right now, the only debt I have is my outstanding student loan debt. Right now, I still owe about $28,500 in student loans; one is about $5,500 and the other accounts for the remaining $23,000. My next goal, unsurprisingly, is to watch that $5,500 loan go away as fast as I can.
How did I do it, you ask? For the credit cards, their interest rate was so enormous that I simply dumped every spare dime I could find in them and started really living a thrifty lifestyle. I stopped buying books (my passion) and visited the library instead, I started preparing a lot more meals at home, and I sold a bunch of stuff around the house that I didn’t really want on eBay. These three things allowed me to knock out 10K in credit card debt in about four months. Once I committed myself to not spending money in frivolous ways, suddenly I had tons of money to throw towards killing the debt.
I then started saving that money towards an emergency fund, and it built up faster than I could have imagined. The emergency fund reached a level where I felt very comfortable with it, so today I spent a portion of it to eliminate my truck loan. Now I can dump even more a month into savings – and I plan to do a similar trick with the student loans, too.
For the first time in a long time, I owe nothing besides my student loans – and it feels great!