3 Real-Life Success Stories of People Who Are Now Debt-Free
Leo Babauta: Free from Debt
The best thing about paying down your credit card debt is that you don’t have to wait: you can start tackling it right here, right now. Here are three stories of people who made the difficult but rewarding journey from being saddled with debt to being debt free.
Leo Babauta, founder of the blog zenhabits.net, got himself and his family (with six children!) out of debt by canceling his credit cards, striking “shopping” from his list of recreational activities, and bringing in extra income. These three tactics are tops among people who have successfully banished their debt.
“No, I don’t want a shovel. And don’t tase me, bro!”
While some people can manage credit cards, and even use them to reduce debt expenses with balance transfer credit cards (see our article about saving money with balance transfers), others know the temptation will be too great, and do the only thing they can: destroy the cards and start paying them down in earnest. This is known as the “If you’re trying to get out of a hole, stop digging” principle.
But don’t start throwing all your extra cash at those balances until you’ve established an emergency savings fund of at least $1,000. Pay more than the minimum on the cards while you’re building the emergency fund, but sock away money for those emergencies. They will happen.
MP Dunleavey, a writer for moneycentral.msn.com and other websites, paid off $30,000 in debt without a winning lottery ticket, an inheritance, or a finding a Jackson Pollock original in the attic.
MP Dunleavey: eliminated $30K in debt
As she put it, “We would have to tighten our belts, gird our loins, roll up our sleeves pick your metaphor and do it all.” She says that the turning point for herself and her husband was both of them admitting there wasn’t going to be a fairy tale ending.
They’d have to make serious changes that included: taking in a roommate, changing spending habits, building emergency savings, working overtime, and being honest with friends and family when they couldn’t afford a night out or a vacation weekend. It’s not easy, but openness makes things better, despite the initial awkwardness.
Susannah Breslin of thefrisky.com had a small inheritance after her father died that allowed her to pursue a freelance career. But eventually that money ran out. Breslin tackled her debt by redefining money problems as personal problems that happened to manifest themselves in the realm of personal finances. And she addressed these problems by doing a ruthless personal inventory of what had got her into the situation in the first place.
Susannah Breslin: Getting out of debt was an inside job
By the time she started turning her life around she was broke enough to be searching for rent money in the car ashtray and the sofa cushions. But terrifying as it was, she says, “It forced me to face the fact that I had a major problem, and if I didn’t do something about it, I would drown in it.”
That’s the reality of the situation. But you’re already wearing the ruby slippers (and frankly they clash with those chinos). You’re the one who has to click your heels and want to be debt-free badly enough to do what it takes to get there. But remember: the one good thing about debt is that you can start fighting it right now if you stop digging yourself in deeper.
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