Updated on 12.08.06

The Financial Turnaround Continues

Trent Hamm

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!

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  1. LeisureGuy says:

    Very heartening. You’re serving as an excellent example. Re: books (my passion, too). I find that the on-line catalog at my library is now my best friend: I can put books on hold, request purchase of titles, renew books, etc. The library almost automatically acquires any book that has good reviews and is popular (which takes care of a lot of my reading) and they are totally open to purchasing a title if you can find a review that recommends it. For other titles, Abebooks.com has been a great resource, though in fact the library fills almost all my reading time.

    Keep up the good work.

  2. Rockmann says:

    That is so awesome, what a great accomplishment. I read your 10 part series on the mistakes you made and I can relate to many of them. I too made the decision, or let’s say the credit card companies made them for me, when I made a few late payments and universal default went into effect. I was over 30K in debt on four cards and the highest having an interest rate of 27%. Once I made the decision to address the issue, my life has been so much easier. I have not charged anything since early 2004 and pay cash for everything. Using my debit card for purchases that may require a card. I now let the Smith’s keep up with the Joneses and just watch the train wrecks around me as my co-workers continually refinance and buy the soon to be artifacts.

    Thanks for sharing your story, it really helps those that need to acknowledge their problems and there is a bright future for those that do.

  3. Great job man! Hard work always pays off. Keep us updated on your status, and keep us hungry readers updated with your informative posts.

    A Financial Revolution

  4. NCN says:

    WOW! Awesome, awesome, awesome, awesome, awesome job! Doesn’t it feel great. You rock. Keep up the good work.

    (A funny thing will happen to you… when you get over the joy of getting out of debt, a super cool “peace” will set in, and then you’ll be super excited about your future… trust me!!!)

    Again, great job!

    PS… thanks for the link… but I’ve moved to dedicated hosting… could you update the link to read http://www.ncnblog.com Thanks, NCN

  5. LuckyLily says:

    Love your blog. Books are my weakness, too. Like LeisureGuy, I discovered my local library’s online system. It’s incredible!

    Now I need to eBay or donate all of the books lying around the house that I’ve only read once, along with other stuff I’ve bought over the years that has turned to JUNK. This weekend will be dedicated to cleaning out our house. Thanks for the inspiration!

  6. Tamara says:

    You are very inspiring. I am not on the edge of bankruptcy but I do have a lot of debt and feel like I’m sinking. So far, I haven’t spent any frivolous money for over 2 weeks and am planning to not buy anything frivolous this entire new year. I am going to pay off debt, go on some very nice but simple “fairly close to home vacations” and learn how to sleep at night again without worry. As a single income family with 2 kids, I know we can do this as we really do have a nice wage. It was just that spending was out of control. I love your site…keep it up!

  7. charleygresham says:

    i’m to preocupied to worry my self about someone else my truck is in the shop and i need about 3000 $ to get it out ihave a clear title

  8. peter says:

    This all sounds a bit unfamiliar to me – I’ve always avoided major debt (other than mortgage) and I’m quite happy about that. Good that you’re getting on the right track.

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