I finally paid off my final credit card balance.
I’ve paid off a starting balance of roughly $5,500 in credit card debt in the past year, mostly with the little money I made from blogging. My new job only covered the last bit on one of the cards.
The Beginning: Rising Debts
Like a lot of people, I went through a period where I let my spending get away from me. It started at the end of my senior year of college and continued the year after where it coincided with depression and re-weight gain. The year I spent climbing back up to 251 lbs was also the period of my life where I used credit cards to live.
I covered a lot of things on my credit cards that I shouldn’t have. But I also covered a lot of things that felt essential – my computer for school, my camera that I still use today, the phone and light bills. I didn’t exactly spend frivolously with my cards during the time but because I had no more loan money and a crappy part time job at the time I didn’t know what else to do.
When I needed something, I used my credit card. It doesn’t take long for those purchases to add up.
Fixing Debt Mistakes
Up until now I’ve been working to pay off both of those mistakes I made during my “sad year” after college. Actually, for about two years I didn’t even touch my debt or try to reduce it. I just ignored it and pretended I didn’t make the mistakes that I had. I don’t even want to talk about how big of a mistake THAT was because the amount of interest I paid during that time makes me a bit sad. But this past year I decided to finally do something about it and get rid of the debt. I wanted to be debt free before getting married. I wanted to fix my debt mistakes.
Finding The Motivation
Debt reduction is hard. You are sending money to a company that gives you nothing in return because you already got what you paid for. At times it can feel like you are throwing money away (in a way you are with interest). You also might feel like the debt is so staggering that you might never get out from under it, even if the sum isn’t really that high. These feelings can be a barrier that keeps many people from even attempting to fix their debt problems.
You have to find motivation to pay off debt. You will need a strong source of motivation because when paying off debt aggressively you will probably have to do things differently than you normally would. You might have to stop eating out or stop buying new clothes. You might have to make tough decisions in order to find the money to make your debt disappear.
For me, my trigger was the death of my half-sister in 2010. It was hard to learn that she had committed suicide because she felt so hopeless over her debts and financial life. (There is always more to a person’s story than just one factor, but this was a big factor and one that stuck with me.) It broke my heart. It took me many months to process that event and come to terms with it but when I finally did I knew I didn’t want that to happen to me (or really anyone… ever). She was my initial motivation for learning about and changing my financial life.
Since it takes a while to pay off debt I had to make the tough decisions like living with family instead of being out on my own. Believe me, this was a hard, hard decision because this is usually a toxic environment for me. But I had the new motivation of being debt free. And as always I still had the motivation of doing better and being better for my half-sister who couldn’t.
How I Did It: Paying Off My Credit Cards
There are a lot of different ways to pay off debt. In the beginning I didn’t know what to do so I did what I do best – I read blogs! I read a ton of financial blogs and websites and books and they recommended ReadyForZero which formulated a plan based on what I needed to pay off.
Education really is the first step but it’s only a small part of it. Knowing what to do and actually doing it are two completely different things. I made debt repayment a priority over other things like going on trips (other than necessary ones) and shopping. I made changes to how I grocery shopped like making a meal plan and shopping the sales. I did everything I could think of to save my very limited income in order to use it for debt repayment. I made temporary small sacrifices in order to get rid of the credit card debt. They were necessary when I was unemployed and relying on blog income.
As far as paying off the cards, most financial gurus like Dave Ramsey suggest you pay off the smallest first and move on to the bigger ones. This shows you progress early and excites you to keep going.
I did it the opposite way and paid off my largest card first. I did this mostly because of the difference in interest rates. I also did it because I knew I would feel a lot better once the bigger balance was gone. Sure it took longer but it felt amazing the day I had paid off that one credit card. From there it was just a process of continuing what I was doing so I could pay off the other card.
And now? I no longer have credit card debt.
Lessons Learned
Weight loss and money management have some similarities. They can both seem like impossible tasks in the beginning but with discipline they are achievable over time. You just have to keep at it even when you don’t seem to be making progress. Over time the little bits of progress you are making will add up to something substantial.
Being healthy isn’t just about exercising and eating right. It’s about being balanced and whole in all areas of your life – including finances. I’m happy to say that this is one area where I’ve succeeded and am now on a great track. I’m feeling positive about the future financially, something I’ve never before felt.
I’m almost more passionate about helping people fix their finances than I am about healthy living. both are so important to me, but the money aspect is close to my heart as it’s something I’ve seen many people close to me struggle with. It’s something I’ve never talked about in depth on the blog before but I realized after going through this process of paying off my credit cards that it is important to share. Being in debt doesn’t make you a bad person. Being in debt is not the end of the world. Being in debt is scary and hard but you can come out of it and you can get help. If anyone ever needs help or wants to talk about these things, please know that I’m here to listen. Just send me a message.
It can take several years to fix the mistakes you’ve made in the past. If you are in debt it might feel like you can’t get out – but you can! It might take a while but it’s worth it.
Tools To Help With Paying Off Debt
The following tools were helpful in my process of paying off my credit card debt:
ReadyForZero – This free tool helps you manage your debt and will help you come up with a payoff plan. Then you can use it to track progress and watch as your debt gets knocked out. Visualizing your progress can really help which is why this free tool is so useful!
The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness
Hopefully these or other debt reduction tools can help you pay off any unwanted debt as well. Getting financially healthy is as important as being physically healthy. It all matters!
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It’s so interesting how similar being in debt and being overweight are and how similar the processes of fixing both are. I’m happy my life is on the right track all around!
Many congrats of paying off the debt. I have a monstrous amount I accumulated in college – the higher my weight, the more I spent – interesting you brought that up because I never looked at it that way. I’ve paid a crapton (technical term) down, but still have a long way to go. Cannot WAIT to get this monkey off my back.
You can do it!!!
Interesting how weight and spending/debt are related. I did the same thing.
Awesome job Mary!! We came into our marriage with our own debts in our early 20’s and we got one monsterous tax return that would knock out one credit card. We did that, then put what we paid monthly from that toward another one (making sure to have them send us hard copy letters that the account is paid and closed which is essential if you’re trying to get a home loan) until we were debt free. I pay ahead on everything (mortgage and car) for a cushion because in these times, the more financial stress we can take off of ourselves if something financially uncontrollable happens the better.
Good for you for going into your marriage debt free and financially fit! Woo hoo!
There are soo many correlations between debt and weight. This line really resonated with me, “You also might feel like the debt is so staggering that you might never get out from under it, even if the sum isn’t really that high.” This is exactly how I felt about being overweight for so long. Now I’ve finally decided to change my tune and do something.
You’re amazing! :)
Great post, Mary! And congrats! Adam and I just recently paid off my car so we no longer have ANY car payments, and that was HUGE! I have been paying double the minimum payment for months now to get it paid off a year early. Now everything that I was paying towards my car is going to toward student loans and I love seeing the balance drop. I’m a thrifty spender and I love paying off bills and putting money into savings almost as much as spending, so I’m kind of a nerd :) Anytime I get a bonus check, rebate, etc. it goes straight to paying off those student loans and I love it. One of the best things that Dave Ramsey says is “live like no one else for now so you can live like no one else does in the future”. I make sacrifices now because I know how sweet the goal is. I want to be living debt-free in the future and I want to be in a place financially that allows me to stay home with kids, so its totally worth the hard work now.
Thanks! I remember seeing your statuses about coupons and stuff on Facebook. That’s awesome! I’m a Dave Ramsey fan too. I don’t follow his advice exactly but I love his message overall and totally agree. Being completely debt free is a big goal of mine and this was the first big step towards that!
Thank you so much Karen. :)
Well done! Excellent post! I love the analogy between managing weight and money- there are definite parallels. I’m sure you’ve inspired others who might be in a similiar situation to confront this problem.
We were debt free for about a year, but just got hammered when our AC went out the week before we went on our vacation to Australia. Rough!! But we’ll get it paid off soon. There is nothing like the refreshing feeling of not having debt weighing you down.
Well done!
Awesome! I’m almost ALMOST paid off after college and grad school – I should be done with credit card debt by the end of September! I am so excited!
Aye, I can’t imagine ever being debt-free. I was thrilled to get the total debt to under a quarter million! But fortunately our house is worth a lot more than we owe, and the tax break for mortgage interest helps a bit now.
But I definitely understand the importance of not getting into debt on credit cards or living beyond your means, it’s kind of a balance. We could pay off the mortgage a lot faster if we didn’t want to go abroad on vacation every year, but at the same time, I look at people like my uncle and aunt who worked hard to be debt free and retire early, and then she was diagnosed w/ cancer on their first trip and died less than a year later — I’d rather live life now, go places, travel, and enjoy myself, even if that means we take the full 30 years to pay off our 30 year mortgage (but I’m sure it won’t be that long, we have paid ahead some).
I guess it just all comes down to priorities — and whether your priority is saving for a plane ticket to go someplace foreign with the man of your dreams (or in your case, to visit him where he lives), or making one extra mortgage payment, it’s all a choice. Dave Ramsey would probably say that I shouldn’t spend money on something like a big vacation since I have a mortgage, but I’d hate to miss out on getting to travel while we’re fairly young, adventurous and healthy. But I wouldn’t want to go into more debt to take a trip or something.
I’m definitely with you Carina. It is about priorities. I also agree with you on living and doing things rather than solely focusing on paying off debt. I want to be debt free but I’m also the girl who is going to live in New Zealand and loves to travel and loves to do new things. I’m not going to sacrifice those things just so I don’t owe anyone money.
I’m also not going to go into any more debt for anything other than a house. I don’t use credit cards to pay for wants anymore… that’s something I did to get into credit card in the first place. I still take trips and do fun things but I pay for them with money I’ve saved now. Right now I’m paying for the wedding stuff as I go instead of going into debt. Some months I didn’t get to pay as much on my credit cards as I could have because I wanted to do other things. I was okay with that taking longer because I want to live my life while I’m young, not just wait for a day when I have money… a day that might not come.
Carpe diem… responsibly. ;)
I love it: Carpe diem … responsibly! So true! I bet a lot of people (including me) could be debt free if we sold our houses and decided to rent, but I don’t think that’s a financially wise move — I don’t want to be debt-free just to have to pay rent for the rest of my life! But you’re right, as long as we’re living within our means and using credit responsibly (for things like buying a plane ticket to have the insurance but then paying off the card, or using credit to obtain an education or buy a home and then paying it off on or ahead of schedule), it’s all good!
finally someone made a connection. I am seriously thankful for this post and I find it very brave that you actually talked about it, put it out there, and even more that you managed to get out of your debts.
I do believe there is – at least for me – a connection between the way one handles their finances and their weight.
For me it’s all got to do with ‘what am I worth’ – in case of debts that is less than nothing. and that is how i felt most of my life. for a while now i have now also taken steps into the right direction. for the first time in my life i actually have control over my finances, and it literally ‘lifts a lot of weight off of my shoulders’…
i haven’t figured it all out yet – but as the debts get smaller i hope that i will too.
great post mary!!
What an awesome accomplishment. Congratulations on not just paying off debt, but on the lessons that you learned along the way.
I had built up some credit card debt in my early 20s and then realized what a bad situation that was and made a plan to pay it off. I succeeded in paying it off (including a car loan) and then at 30 I went back to college & grad school and got myself into debt again (mostly student loans, but some credit card debt too). Ten years later and I’m still carrying a substantial load of debt (some came with my husband). I thought I had learned my lessons, but apparently some of us have to take that class more than once.
You sharing your story here has inspired me to take another shot at getting a handle on our debt. Thank you for being so open about such a sensitive topic!
P.S. Suze Orman has commented several times (on The Biggest Loser and on Dr. Oz) that weight issues and financial issues have a very strong correlation and many similarities in terms of the feelings of “deprivation,” shame and so on that can be associated with addressing both of these problems. Very insightful of you to make that connection too.
Congrats again! I’ll admit, I’m not great with $, but at least i no longer have credit cards, and am up to date on my bills, & my credit score improves each year! At the same time, I do end up living a bit out of my means, but I do admire people who are able to budget & such, so long as they do it within reason!
Great post! It’s great that you understand what got you into debt in the first place and you have some perspective on just how much thriftiness you can sustain over the time period it takes to pay off your debts. Sometimes people live so thrifty, they can’t sustain it more than a few months and they get discouraged. Other times, they can’t adjust and they don’t make a dent and they….get discouraged! Sounds a lot like weight loss efforts! I always advocate to make a budget that is liveable and to absolutely include savings while paying debt down. Paying debt down and having absolutely no cash flow for emergencies that come up during your pay-down phase will only push you back onto your credit to solve the unforseen.
Totally. I’m all about having an emergency fund, but I don’t budget. I won’t stick to a budget so I just separate money into accounts on ING and pay bills when they come as well as paying myself/debts first. Whatever is leftover is spend money. Budgeting? Blah.
Too funny! I couldn’t imagine living WITHOUT a budget! There’s no way I could accurately determine just how much I can actually afford to put in my emergency fund, my retirement savings, and my future travel fund without one! It just goes to show there is no one way for each of us to keep our financial houses in order–only general principles–kind of like healthy living!
Wow, that’s great news. Congratulations :)
I don’t have an overdraft on any of my credit/debit cards now. Used to have 12 years ago, when I got my first card from the company I worked at. It had something like 50% of the monthly wage as an overdraft. As you can imagine I used that money. Then, after 1 year changed jobs and, since the credit card was issued for the company to send me my money, I had to close the account. And my god it was painful to pay the money back. I don’t want to know how much interest I paid, but let’s say that month I came back home with almost nothing of my salary.
Lesson learned. Now all my credit/debit cards can pay exactly what I have in my bank account. I don’t want ANY CENT in overdraft, since I dno’t think I have the discipline and it would ruin me.
I so agree…money issues and weight issues go hand in hand. I applaud you for recognizing this now. It took me 40+ years!
Just always make it a point to not spend beyond your means. Doing so will make your life miserable.
Good job Mary! I finished paying off all my credit cards at the beginning of the year and I feel lighter all around. Definitely a huge weight lifted off my shoulders.
Proud of you friend.
DUDE. I blogged about the same thing about two weeks ago. Totally true. Congratulations!
I lost weight too! It took a lot of motivation and continuous exercise.
I actually found out secrets to weight loss from a site.
Hi Alice. I edited your comment but let it stay. Are you a spammer or a real person? It’s hard to tell. ;)
I’m proud of the achievement you made on paying off your credit cards. That’s indeed a big relief. I once remember I was just working to pay off debts until I learned to totally avoid all sorts of debts. Now, I’m debt free and it does feel a lot better. I also agree with you that weight loss and money management have a lot of similarities in practicing discipline and patience. I’m not yet successful with my weight loss goals but I’m sure will be! Thanks for this brilliant post!
Thanks a million for posting this! I also struggle with credit card debt (and student loans). I have been in a position of little to no employment for close to 2 years and am basically feeding the interest treadmill but not reducing my debt at all. I have a whole bunch of excuses why this is okay right now, but really it’s not. I need to make a plan to pay off my debt.
You are a huge success Mary. :) Thanks so much for sharing your life with us
No problem. Glad I could help. I did the same thing and didn’t even try to pay them off for a couple years. Don’t worry, you can do it!