By June Headley Greenlaw
Hold onto your teeth, my friends. I’m about to tell you a story that will make them want to fall to the floor! About six years ago, after a combination of life challenges, my husband (Jeff) and I found ourselves with $125,043 worth of credit card debt. We had almost no equity in our house and two cars we were making payments on while my husband had been without a paycheck for about a year.
Hubby and I are both on “do over” marriages after first marriages that expired at around 20 years. We both brought in hunks of debt from our starter marriages. There were lots of things that contributed to this mountain of debt that I won’t bore you with because we all have them. They are called LIFE!
We were determined to get to debt freedom by the time I was retirement eligible, which is now 25 days away, and we have come pretty close. We are literally just months away from having all credit cards paid off! We are about one year away from having all cars paid off! We now have a big chunk of equity in our house! I wanted to share our story so that anyone finding themselves in that dark hole of debt could gain some hope that you can dig out too!
The first thing we did was create a spreadsheet that listed all of the things we had a balance on and what payments were being made to each of them every month. I had the spreadsheet incorporate the interest rates so we could accurately see what was happening to the balances after every payment. We set it up with a goal of having everything paid off in three years. Lofty, I know! As you can surmise from the fact that the first paragraph of this post says “about six years ago”, it didn’t work as well as planned, but it HAS worked. We now owe less than $8,000 to credit cards!
I won’t provide the color for your rose-colored glasses and tell you that it was easy. It wasn’t! No, we didn’t file bankruptcy. We had to say no to our kids a lot. Heck, we had to say no to ourselves a lot. But with some hard work and determination, we’re doing it! I took on extra jobs outside the house that even included selling Rainbow vacuum cleaners. I still love that machine! Hubby picked up nearly all the jobs inside the house.
I read a lot of “get out of debt” things on the web and after waffling back and forth about the best approach (paying off highest interest rates or smallest debt first), we went with the smallest debt first so we could keep ourselves inspired by shredding new cards each time one was paid off. You can’t shred them before they are paid off because you might need them to play the “move your balance” game. We did that a LOT to take advantage of lower interest rates for short periods of time. You need to be careful when doing that because there are generally fees associated with those transactions and you’ll need to evaluate how much money it will really save you.
I think the most important thing is to create a list or spreadsheet of your balances and be able to watch them go down. It helps keep you grounded when you want to fly off the handle and spend money on “wants” vs. “needs”. There is nothing more empowering than cutting up that card!