The Getting Out of Debt Storyline

Over at LearnVest, Jill Davi shares her story about how she racked up $30,000 in credit card debt, and then paid it all off. It’s a nice “taking control of your finances” story, but like a lot of other narratives about people getting themselves out of debt, it follows a familiar storyline: Person with massive credit card debt decides to cut up her credit cards, then makes major life changes to cut back on spending (i.e. moving in with another person to pay less in rent, cutting out shopping completely, creating spreadsheets), and then pays off the massive debt load in a relatively short period of time (for Davi, it was paying off $30K in 18 months, while earning a little more than $30K a year—which is extraordinary).

I like a good “getting out of debt” story—they can be inspiring. I just wish they were sometimes a bit more relatable, because stories like these can make it sound like pulling yourself out of debt can be an easy thing to do, when it’s something a lot of people struggle with. I’d love to read a piece about someone who got herself or himself out of debt, but about how it wasn’t easy, how it took a lot of time to fix some deep-rooted, unhealthy habits, and how it’s fine if you fail a few times along the way, but that it can eventually be done. Anyone have a story like that?

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73 Comments / Post A Comment

laurafayesmith (#3,012)

Ugh, I wish I was sitting on the “I have a story about how I got out of debt” side of things – right now, that’s the story I’m IN, and I have no idea how or when it will end. My husband and I are in a lot of debt and trying to shovel our way out of it, but facing tons and tons of setbacks (like the dog suddenly needing nine teeth pulled), and constantly weighing the “do I just go do something I hate and make money” route against the “do what you love and money will come” route. It sucks. I agree with you – I would love to hear a story about someone who made it out of debt in a normal way/amount of time, as opposed to the yahoo-headline generating story. That would be TRULY inspiring.

kickmuri (#3,118)

It’s never easy! It’s crazy how most of these people had someone who supported them while they were paying their debt off (the $90,000 chick from LearnVest) or this girl who paid off everything by moving in with her sister (and not paying rent?! maybe?). While my debt wasn’t large as theirs, it took me 4 years and lots of slip ups to pay it off. I still have slip ups. Those habits are hard to beat.

Mike, I have that exact story you’re seeking – to the letter. [So much so that after almost a year of reading, I finally popped my Billfold commenting cherry simply to tell you this.]

Mike Dang (#2)

@thirtyist@twitter Omg, you must write this story!

Sloane (#675)

I like a good get out of debt story too, and while I’m not on that journey anymore, it’s good to hear about people who have had such huge success. My hangup with these stories is that they depend on making huge changes, which are often not possible. For example, I lived with my parents after college, and then had roommates during and after graduate school. So there was no way for me to cut my biggest monthly expense much more than I already had (I had gone to graduate school so that I could afford to live on my own, so moving back in with my parents was an option that I willing to consider, but only if things got really bad). I already make my coffee at home (because I like it that way), so the latte thing doesn’t do much for me. I cook at home already. You get the picture.

I managed to pay off my debt, but it was a very haphazard journey for me, with lots of wrong turns, lots of just figuring it out myself. Oh, and there was the time a financial planner (certified and everything) told me not to worry about paying off my student loans, and I was like, “what?!!”

wendyleigh (#3,537)

I’ve read stories of these people giving up their $150 month gym memberships. It’s irresponsible spending that got them into debt in the first place. I am glad these people were able to wipe out their debt, but it’s hard to congratulate them for doing the responsible thing. I know a girl who threw herself a “debt-free party.” I just thought that was pretty tacky. They wrote about these parties at the WSJ (maybe The Billfold did a story?)

Just to clarify, those who go into debt for things like medical expenses, school, etc are not the same who charge nights out, clothing, entertainment, etc.

CubeRootOfPi (#1,098)

@wendyleigh Right? I think most people in debt are in the situation that laurafaysmith is – they got into debt because of school or difficult situations and/or can’t free up any more disposable income. As you said, good on them for getting out of debt, but the “I stopped spending $500 a fortnight on clothes, cable and drinks” isn’t realistic for many, if not most, people.

Emma Peel (#317)

I think Logan is going to have a story like that one day, amirite?

Even after reading this story, I have no idea how she pulled it off — my best guess is she didn’t pay rent at all, which… um, yeah, not paying rent is a good way to free up a huge amount of your budget!

Catface (#1,106)

@Emma Peel Agree. I find that a lot of these LearnVest stories are very thin on the only details that matter to me — the site’s like the People magazine of finance writing. Here, about 2/3 of what I assume to be the writer’s gross income (vs. net; she isn’t even clear about that) was dedicated solely to paying down debt for a period of a year and a half. If in fact she did not pay rent, this is THE most important aspect of her getting out of debt, and it is irresponsible of LearnVest not to foreground this in the story.

Also YES PLEASE to everyone here who has more relatable, less sunshine-hazy stories — sharing them.

aetataureate (#1,310)

@Catface “the site’s like the People magazine of finance writing” hahahahaha! Well played, friend.

Sloane (#675)

@Catface Check out “The Unemployment Diet” article. Her husband got fired, and her first thought was about cancelling a Caribbean cruise and a yoga retreat. She goes on to talk about some more serious financial matters, true, but that’s where she starts. So…not applicable to me.

Catface (#1,106)

@Sloane I am enough of a masochist that I did read that article! Thank you, it was nauseating. “I discovered Starbucks beans at the grocery store”: well, aren’t you a regular Vasco da Gama.

I live in fear of the day Mike or Logan will link to a story on Savvy Sugar, compared to which LearnVest is an Econ 101 textbook.

chic noir (#713)

@Emma Peel not having to pay rent & not owning a vehicle = a lot of money.

Clara (#3,450)

@Catface Cannot stop laughing at this comment. Thank you.

navigateher (#555)

@Catface This is the best comment of all Billfold.

megsy (#1,565)

I’m fighting to pay mine off day by day and I have done ALL the right things and I spiral into super self destructive behaviour. And I have one heck of a story for you involving things like money and health and the military… I just can’t write it until september 19.

MaxBraverman (#3,273)

Are we ever really debt free though? I feel like it’s impossible to live without debt unless you’re incredibly wealthy. I would relate to a story that was more along the lines of “I went from Soul Crushing Debt And Dodging Calls From Bill Collectors To Responsible Debt I Can Manage”.

aeroaeroaero (#1,422)

@MaxBraverman Just wondering what you mean by this? I am debt-free but I definitely still feel Poor, as in I just started saving money like two months ago, and have been living paycheck to paycheck my entire adult life. But I don’t have debt — no car payment, no mortgage, no student loans, nothing. I feel like I can’t be the only person in the situation, and I am definitely not incredibly wealthy.

MaxBraverman (#3,273)

@aeroaeroaero Most people don’t live without a mortgage or multiple car payments. I live in the suburbs and there aren’t a lot of places to rent so I bought a house. I think that sort of debt is necessary to me having a roof over my head. I work 45 minutes from home and need a reliable car so I have a car payment. These sort of debts are what I’m talking about. Not credit card bills.

SterlingCooper05 (#2,529)

@MaxBraverman The majority of people are debt free prior to college and 40% of them go to school without taking loans. Of this 40%, the ones that rent housing and pay cash for transportation are debt free. They don’t have to be wealthy to achieve this lifestyle.

loren smith (#2,300)

@aeroaeroaero I am in the same boat as you, but I started saving a little over two years ago. I consider myself now more broke than poor, but that’s only because I got so hooked on saving. Keep it up! It feels amazing when I log into my savings accounts.

lalaland (#437)

@MaxBraverman Really, the incredibly wealthy are usually not debt-free either – they can take out huge amounts of debt, which is cheaper than equity, to finance various endeavors. Whatever returns they make offset interest payments, etc. Essentially they operate like large companies. In any case, debt is not necessarily bad and not necessarily something to avoid.

Worker Parasite (#2,292)

@lalaland Good point – I think a different way to look at this is “what’s your net worth?” Most people have debt, but if you have more assets than debt you’re probably doing ok. Yes, that’s an overly simplified view, and yes, asset values can change dramatically, but as someone with no debt, I don’t view a mortgage as a bad thing. I’m doing everything I can to avoid any other kind of debt though.

aetataureate (#1,310)

@SterlingCooper05 I rent and paid cash for my car and am definitely anything but wealthy! You’re right.

MaxBraverman (#3,273)

@aetataureate I think that’s hard to sustain over a lifetime though. I don’t know how old you are, but I’m 35, single with two kids and living that way just isn’t possible for me. It’s great that you were able to do that, but it’s very hard for the majority of other people.

aetataureate (#1,310)

@MaxBraverman To me, a mortgage is a separate thing and I agree that anyone who wants to own a home is likely to do that. To save up that kind of cash is out of reach for virtually everyone. I totally get that.

But I don’t feel that way about car payments.

@MaxBraverman Yeah I’m not really a fan of the “debt is evil” school of thought. All debt does is let you buy things now instead of later! If someone saved up until they were 45 so they could pay for their college education in straight cash, we would consider them crazy, not smart.

Worker Parasite (#2,292)

@aetataureate Agreed 110%. I get why people do, and I certainly don’t want to be negative towards people who do have car payments, but, with all but one of the cars I’ve owned, I’ve always paid cash. Of course I also buy at least 5 years old, and owning a car is not absolutely vital for me to live my life, so I’m pretty fortunate that way.

aetataureate (#1,310)

@stuffisthings Let’s find some people who are in both the “debt is evil” and “parents/families helping is evil” schools and see how they do Anything.

MaxBraverman (#3,273)

I think everyone’s experience is different. It depends on how you grew up, if you had parents who helped with school, helped you after school, if you’ve been divorced (trust me that’ll change your finances in ways you never imagined), etc…The type of job you have and how much money you make is a huge factor as well (obviously).

@aetataureate One thing I always like to point out is that rich people — who you’d think would be in on the secret of our corrupt society built on evil debt — are actually perfectly fine with debt. They will leverage and mortgage themselves and their companies up to the eyeballs if necessary and will declare bankruptcy the moment it makes financial sense for them. A rich person is happy to take any money that will earn them a positive return: borrowed, given, earned, or stolen.

Only the lower classes attach any moral meaning to financial instruments like debts (which attitude actually DOES benefit the wealthy, at least those attached to the banking world, because people will keep paying debts they should logically abandon purely out of “moral obligation.”) Treating a debt like a moral obligation or a reflection on one’s character is pretty much the same as treating an ATM like a human being.

aetataureate (#1,310)

@stuffisthings Wait, I need more information. Taking on debt and then not paying it does have a moral component to me.

@aetataureate Well in that case you’re the only one of the hundreds or thousands of people involved in your debt transaction that has any emotional attachment to it. Unless it’s like, $20 you borrowed from your mom. To everyone else it’s a number on a spreadsheet.

@stuffisthings I mean I guess that sounds a little weird. I do things like tip and give money or cigarettes to homeless dudes or buy drinks for friends without running it through a spreadsheet first. That’s life. But *major* money-based debts like mortgages, credit card bills, etc. just don’t work that way. Making your loan payment on time is not going to make Sallie Mae smile. Goldman Sachs isn’t going to not be able to buy medicine for its kid because you defaulted on your mortgage. *Everyone else* involved in this game is looking at your loan through a lens of pure cold calculation, do you really want to be the only sucker who actually cares?

Let’s put it this way: when financial institutions make loans and set interest rates, they assume X% of people are going to default. They don’t give a shit WHY they default. It matters not one little bit to them whether its because they took the money under fraudulent pretenses with no intention of ever repaying, or they lost their job and their wife got cancer. X% defaults = Y% interest rate, period.

I guess in principle if everyone started taking every loan available to them and defaulting on it then yeah, interest rates would go up and everyone would suffer. But for most people that’s not really viable — you can’t just go through life declaring bankruptcy every year, and you’d probably eventually get put in jail for fraud. Bankruptcy and default has a real cost, and that’s the point. We as a society have decided that’s what it should cost if you can’t or won’t pay your debts. Most people take loans intending to pay, they can’t pay, and then they make their life a living hell because they have a “moral obligation” to pay. But they don’t! Their only obligations to the lender are contractual.

I dunno, maybe think about bankruptcy/default/other ways of not paying your debts as like the early termination fee on a cell phone contract. It’s built into the price and the business model. If you have a year left on your $85/mo contract and you want to cancel it for some reason, it would be stupid to pay that $85 each month for 12 months instead of just paying the $200 fee, right? And nobody would call you immoral for doing it.

aetataureate (#1,310)

@stuffisthings Okay, so it’s fine to be snarky, but I’m still curious how “I don’t have this money, but I’ll pay for it with this conceptual money then not pay that back” does not have a moral component or reflect on one’s character in your opinion. It sounds a lot like people who don’t vaccinate their kids and rely on the other kids to have been vaccinated. Totally willing to have my mind changed about this.

@aetataureate Oh and as always I recommend Debt: The First 5,000 Years, a brilliant and highly readable anthropological study of the history of debt and our social relationship to it. There’s extracts around the web (including a very early Billfold post, I believe). It doesn’t explicitly endorse my view, per se, but it helps to understand how the concept is debt is socially constructed and it’s a cracking good read!

Worker Parasite (#2,292)

@stuffisthings But BK is highly punative, which you mention, but then contradict? Not 100% sure how it’s done in the US, but in Canada a bankruptcy/renegotiation of debts (called a consumer proposal here, not sure if it’s the same there) destroys your ability to get credit for 7 years. No mortgage. No car loan. No unsecured credit card. When you do get access to credit again it’s at absurdly high interest rates. Unless you’re doing this through a corporation you’re setting yourself up for a very hard 7 years afterwards. I get that you’re referring to this cost in your post, but I don’t understand how we can view BK like ending a cell contract early. If I pay the early out fee on my cell it’s not eliminating my access to credit for years to come.

I don’t think people can set up corporations for medical debts, underwater mortgages, or excessive consumer spending, but if one were to follow your advice, they wouldn’t be morally wrong, but because of the system we live in, they’d be hooped for years to come.

@Worker Parasite Exactly. Maybe I should have been more clear. If bankruptcy is “less costly” than continuing to pay, then you should choose that option, without “morality” entering into it. But once you start attaching moral feelings to debt, you get this debt mania where people frantically try to pay everything off, or cut their life to the bone to meet their debt obligations when it’s just not necessary…

Also, you can default on individual debts just by stopping paying them, and taking the dip in credit score, which doesn’t totally prevent you from getting credit. I got pretty wiped out in the late 2000s and even though I never declared bankruptcy, my credit is terrible. My car was repossessed while I was overseas (I specifically borrowed well under the Blue Book value in case I needed to sell it, but of course nobody was buying cars in late 2008/ early 2009), I have a private student loan that’s in default, and many of my small-balance credit cards and Federal loans went bad too. I’m gradually bringing things current as it makes financial sense but I don’t stress about it. My credit is good enough for what I need right now — I was able to get a small unsecured CC for emergencies, for instance, and they are raising the limit over time as I run a small balance and make my payments every month. I’ve also had no problem getting phone service or anything like that.

One of the things I defaulted on is actually an old early termination fee, too! At this point its changed hands so many times that it would be such a hassle to figure out what I owe to whom that I’m just going to let it be. It’s not even worth the time of whatever collection agency to continue trying to collect from me, because it’s like $160+interest, and soon it will be past the statute of limitations and they can’t legally collect it nor report it to the credit bureaus.

I mean, I dunno, do you think AT&T was counting on that fee revenue and now all your phone bills are higher because of my jerk ass? Even if that’s true, AT&T took the hit and sold the debt to a collector a long time ago, at a time when I really couldn’t pay even if I wanted to. Me paying them now is not going to affect your phone bill one iota. If someone could explain why I should feel bad about this I’d be interested to hear it!

chic noir (#713)

@MaxBraverman THIS!

All it takes is one major illness them boom…back in debt.

lalaland (#437)

@stuffisthings You’re right, to a company, debt is just the right side of the balance sheet.

Unfortunately while corporations are considered people, it’s hard to detach from your personal debt. I am in the debt business, so to speak, but I currently have none of my own because, well, I don’t like it.

Worker Parasite (#2,292)

@stuffisthings I think I agree with aetataureate, and I don’t mean this to be an attack on your actions – but yes companies expect a certain default rate, but if enough people don’t pay their phone bills maybe the phone company lays some people off, or maybe their stock falls and people who hold the stock (even indirectly, say through a pension plan) suffer. One person not paying a bill isn’t going to impact my life, but if enough people decide not to I could be negatively impacted. I’m not saying there’s a direct relationship; AT&T isn’t going to say “10 people stopped paying their bills, let’s fire someone now!” but I do think it’s wrong to not pay a bill if one is at all able to because it could contribute to hurting someone else.

@Worker Parasite Well that’s like, next-level speculation — sort of like saying “hey don’t eat that bag of chips because then you’ll get fat and my health insurance will go up.” I mean, I stopped using AT&T’s services and I didn’t pay them for the privilege of doing so. It’s not like I used services I didn’t pay for — I’d already well paid for whatever subsidy they applied to my iPhone.

Fact is, though, I didn’t pay it at the time not because of some moral objection to their business model (though there are things to object to) but because I was broke and living in another country. If I paid that ghost debt now, I’d only be generating profit for some bottom-feeding collection company that bought it off AT&T for pennies on the dollar, who would use the proceeds to call up and harangue old ladies about their medical bills, and why? Because of my “moral obligation” to the stack of legal forms in a filing cabinet somewhere in Georgia that comprises AT&T Mobility LLC? Yeah sorry, I’m going to go ahead and spend that money in the real economy buying goods and services from my local merchants, thanks.

To give another example, I have some old $300ish credit card balance that was originally with a bank that failed, was bailed out, and sold my card to a holding company shortly after I stopped being able to pay it. They then sold it to debt collectors who have been passing it around ever since, but the entity that originally lent me the money has been sucking on the Federal Reserve/Bank of England trough for years now. My write-off didn’t affect their ability to lend one bit, because since 2009 they have unlimited 0% interest money to lend out to whomever they want to.

I’m not saying look at the business practices of each company you owe money to and decide who you want to pay. Just treat the debt the same way they do, and let the market work out the consequences. If I can afford to pay, great. If I can’t — or if the costs of paying are greater than the costs of not paying — then sorry, Financial Institution, you made a bad bet. This happens to Financial Institutions a thousand times a second and they seem to make enough good bets to produce some pretty healthy profit margins, so I’m not too shook up about it.

People on the right (not saying you guys are, btw) like to say “let the market do everything,” but then they turn around say everyone has to pay their debts or they’re Bad People. Nope, not how it works, I’d rather just play the same game as the people with real money thanks. Debt is a contract and a legal construct, nothing more, nothing less.

Worker Parasite (#2,292)

@stuffisthings I’d be concerned about playing the same game as people with “real money” if I didn’t have any. Someone with “real money” isn’t as concerned about a higher interest rate than someone with a much more modest amount of income.

Thanks for not saying I’m not on the right – I’d HATE to be tarred with that label!

@Worker Parasite I was thinking about this some more last night and I guess what’s funny to me is the cognitive dissonance involved in saying things like “Debt is evil, that’s why I want to pay off all my credit cards. Otherwise my credit score would be ruined and I’d never be able to get a loan!”

But you’re right, it can be dangerous to take this attitude too far if you aren’t a millionaire. I’m just saying we should take emotions out of our debt calculations, because in any financial transaction it’s usually the one with the most emotional attachment that gets screwed.

aetataureate (#1,310)

@stuffisthings I’ve let this marinate since yesterday and need to say, in a kind way, because I know it has nothing to do with you personally, that it eats at me that I can’t get even a starter credit card because I have no credit history, but someone who’s defaulted on several things and has bad credit can get one. The system is absurd.

@aetataureate I agree with you there! It’s stupid that anyone would lend me money, but there you go.

Also, I just came back to say one other thing: it’s interesting WHAT we consider to be “debts.” For instance, most people would put mortgages in a different category from credit card debt. You wouldn’t consider someone with a $100k mortgage who earns $50k a year to be “highly indebted” in the same way as the same person with $100k in credit card debt (partly due to their ownership of the underlying asset, and the lower interest rate involved). Until recently we thought of student loans the same way. My education is by far my most valuable asset, but it’s not one I can use to securitize a loan, nor one that Sallie Mae can repossess.

And what about other kinds of financial obligations? I have a 12-month lease on my apartment. Is that really any different from a $15,000 debt? If I skip town tomorrow, my landlord could track me down and sue me for the unpaid rent (subject to the relevant laws, of course). What about my two-year phone contract? Or even my monthly electric bill, which I “owe” for electricity I’ve already consumed in the previous month? In that sense, it is indeed very hard to be “debt free.”

notpollyanna (#2,841)

Yes, those stories always feel terribly impossible. There’s the Harvard MBA guy who paid off $90k in 7 months. Great for him, but useless to me. My story, so far, is: I paid off $50k (of $106k) student loan debt in 4 years while making $25k/year. I had to live with my parents until I was 28, I was paying about 20% of my money on healthcare expenses, my budget was “spend nothing and send it all to my student loans”. It all sucked. It was a long, soul-sucking 4 years. Even though my payments started at $870 and ended those four years at $480, I still couldn’t afford to move out of my parents’ house. It wasn’t until I started a new job ($40k!) that I could move out. And now, moved out, with payments of $390, I am much less obsessed with my debt, though I still refuse to take more on.

@notpollyanna Right, these stories seem to go a whole lot smoothly if you’re making decent money. Jill Davi wasn’t in rolling money, but she was bringing home over $30k after taxes–even if that doesn’t go as far in a city like NYC, it’s still more than many of the jobs available to recent college graduates pay.

CubeRootOfPi (#1,098)

@wallsdonotfall She also moved in with her sister, which allowed her to save money on rent, possibly food as well (which in NYC takes up an even bigger portion of people’s spending than other areas).

dudeascending (#1,921)

@wallsdonotfall Did she? All the article mentions is that her starting salary in NYC was $29,500, which would be a hair above $22K after taxes.

Non-anonymous (#1,288)

@dudeascending It’s both. She says she was making $29.5K before taxes at the beginning of the story, and $30K after taxes at the time she decided to get out of debt.

@Non-anonymous Hang on, let me get out my calculator. So she had $30,000 in debt, she made $30,000 a year after taxes, and she paid off the $30,000 in debt in 18 months. During which time she earned (punches buttons) $45,000. Meaning that she lived in New York City for 18 months on (punches buttons) $15,000, assuming she was paying no interest on the debt.

Yeah, that sounds totally reasonable… Hey New Yorkers, why you whining about money? If you earn $10,000 a year you should be fiiiiiine.

eagerber (#1,958)

It would be cool to hear her re-tell her story via her spreadsheets. Like, I keep spreadsheets of my monthly fixed expenses, revenue, and debts. When things go awry, I add comments to my cells, color code major new debts, etc. So my debt amounts fluctuate each month. My revenue fluctuates (because I have side jobs on top of a salaried job). My savings fluctuate (market goes up or down, I sometimes cash out my savings once I’m done saving up for something, etc). I think a re-telling of my spreadsheet would be more interesting than saying “I’ve made a conscious effort to eliminate meals out, lattes, pricey yoga pants, etc etc, and see, I’ve paid off XX amount already! It’s working, so therefore it must be easy — and the only thing I’m doing with my money, ever!”

The Billfold already provides a cool monthly check-in re: debts, which makes paying down debt feel more “real time” than reading a success story that’s no longer a work in progress. So I feel like The Billfold is already some-what achieving this kind of story-telling, month by month.

@eagerber Because then she’d have to disclose how she was actually able to live in New York on $833 a month for a year and a half, and I suspect the details would punch some holes in the “anybody can do it!” narrative.

eagerber (#1,958)

@stuffisthings Oh, for sure!

Runawaytwin (#2,693)

@stuffisthings perhaps a few dates subsidized some of her meals/lifestyle. Thats pretty common.

dudeascending (#1,921)

@Non-anonymous Man, it took me four reads to pick up on that! Reading comprehension fail. Still, someone paying off $30K of debt on a $42K-ish salary seems really impressive to me.

3jane (#645)

You know, I don’t want to hear the story about how someone reined in out-of-control spending (although, that is great for them) or how they paid off an outrageous debt load while making an upper-middle-class income but living like a college student (although, that is great for them).

I want to hear about how someone paid off their debt and still lived a relatively normal life that allowed for enough spending to not feel like they are working off a debt in a mine or something. And maybe it took them 36 months or 48 months or 8 years but they did it and they’re proud of themselves, because that’s literally all I aspire to. For the past year I’ve maintained a $2,000 emergency fund and since January I have–for the first time in my adult life–had a month’s worth of expenses in the bank so I’m not living paycheck-to-paycheck. I paid off one credit card and will pay off a second by October. And I’m not going to feel like I’m not doing enough, because I am doing the best I can.

MaxBraverman (#3,273)

@3jane I agree with every word of this. I don’t see the point in not enjoying life (within reason) to pay off a credit card.

aetataureate (#1,310)

@3jane All of that is so wonderful though! Not just for “the best you can” which is great, but just objectively, you’re doing so well and so much better than many people!

3jane (#645)

@aetataureate Thank you! And I am dead serious when I say I embarked on all these good things because of The Billfold. But too many “get-out-of-debt” stories are more like the one above which ultimately just make me feel like I’m not doing ENOUGH because I only pay the minimum on my student loans (and for real, I am not paying more. This is a yoke I have accepted for 25 years) and I have a smartphone and cable.

aetataureate (#1,310)

@3jane This may be strange but I think of debt as weight loss — Logan is a good example of this (sorry Logan, analogizing you) because she’s shed all her debt twice and gained it back both times. Yo-yo money dieting. And I think? both times were kind of extraordinary means paid off in one large gulp. It’s not sustainable to live that way or wait for a large gulp of money to use on your debt, nor is it sustainable to suddenly have NO debt without any changed spending habits.

aetataureate (#1,310)

So you’re doing a more sustainable thing is what I’m saying, even though it may seem less glamorous AND less puritan-chic too.

3jane (#645)

@aetataureate I get your point. My husband and I were in a very financially difficult situation for about a year and a half (2010/2011) and did the puritan thing out of necessity (moved out of the city, cancelled smartphones, no cable, no going out, etc.) and I just remember the overwhelming feeling that if I had some money fall into my lap, I would spend it all on stuff that I wanted IMMEDIATELY. I feel like that kind of “debt starvation” leads to binging, if you will. At least for me. I’d rather do things I enjoy and accept that I will be debt-free in three years, with the extra money spent on interest that entails, instead of 6 months.

dudeascending (#1,921)

@stuffisthings Do you think she’s lying, or do you think she’s omitting stuff?

@dudeascending Probably understating the level of family support she received, is my guess. As others have suggested, maybe eating for free and not paying rent, i.e. not realistic options for most adults.

hellonheels (#1,407)

Sometime in the May/June timeframe, I will have finally paid off what was once about $25,000 worth of consumer debt in two years. Admittedly, I was very lucky – about four months after I got serious about it, I got a new job that paid about 30% more than my old one, and about nine months after that, I was presented with the opportunity to essentially sublet for free in exchange for doing some work for a business owned by the lessee – not to mention various vacation payouts, bonuses, and and large tax returns that enabled me to pay the debt off faster.

That said, there was NOTHING easy about it. I had to fundamentally change my lifestyle. I got myself into this mess by doing whatever I wanted, whenever I wanted, including nice meals out, designer clothes, vacations abroad, etc. etc. Contrast that with first year I focused on paying off my debt. when I budgeted myself $120-$160 a week for food for two people, gas for my car (my commute is about 85 miles round trip and I rarely work from home), and just about anything else I needed short of absolute necessities. For the past two years, I have lived more frugally than I did when I was making $31,000 a year right out of college – and I’ve made more than twice that for most of this time. But almost every cent I made that wasn’t necessary to sustain a very basic lifestyle went to my credit cards, or to savings.

I guess my point is that just because the tone of the article made it seem easy doesn’t mean it was. The lifestyle one lives to get into debt and the lifestyle one lives to get out of it in a relatively short time have very little in common.

Apple (#2,568)

Honestly? A huge part of it is income. Think of it as, “You don’t have a debt/spending problem; you have an income problem.” You know how normal people with already-frugal lifestyles get out of debt? They get better jobs, or find a way to make extra money on the side.
That’s how I’m doing it, anyway. My debt is in the form of student loans. The only way to get ahead of that ish when you’re already living frugally is to get a better-paying job…and then get another better-paying job…and keep moving up. And don’t let your lifestyle creep up with your salary. It’s not dramatic, and it’s certainly not easy, but I feel like that’s the only way for us normal folks to truly make a significant dent in debt. That, and hope and pray that you aren’t hit with a layoff or a medical emergency or something else major while you’re trying to get ahead.

@Apple Absolutely. And true of government finances as well. No country ever cut its way out of a debt crisis, but many countries have outgrown their debts (including the US and European allies after WWII).

Westcoaster (#3,560)

I’ve never posted, but I read this site every day. I finally decided to comment, because, well… I got into debt, decided for a while that being an ostrich about the whole thing would ensure the problems would go away (news flash: they didn’t), and I went and got help from a credit counselling organization. It took 5 years and a lot of effort. I got myself into the situation, and I found a way to get out. I finally paid off the debt and am working towards saving money, not spending it.
It’s something I struggle with all the time, bad habits don’t just disappear, I have to work at changing my attitude about money and spending.

BlackAndBlueMan (#2,773)

In September 2010, after 17 years of credit-card abuse and nearing $150,000 in debt, I finally reached the end of the road when I found that I could no longer juggle my cards to make my payments.

I started going to DA meetings, I established contact with creditors and I sought financial counseling – but most of all, I hoped that I could find some way to get myself out of debt like in some of the remarkable stories I had read.

But weeks passed and I found that it wasn’t going to happen. I had too little to work with, and I had left it way too late.

Soon, overwhelming fear drove me to stop contacting creditors and returning their calls, not checking my mail for three weeks and wondering what the fuck I was going to do.

Just before Christmas 2010, I finally Yahooed a concept that I was utterly terrified of, especially as I knew nothing about it – bankruptcy.

Fortunately, thanks to a great website that explained everything, I soon discovered that bankruptcy wasn’t the end of the world – and that for me, it was the only realistic option available.

Thus, with help from that website, I put the necessary paperwork together and on 14 February 2011 the Australian Government officially declared me a voluntary bankrupt.

Two years later, life continues to get better as I keep on learning and succeeding with how to handle money better. There have been hiccups along the way, but I am getting there.

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