Anyone made it from living in high debt to debt free with savings?

[Bluebird9]

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Edited by Bluebird9 - 11/27/11 at 10:07am

[Denvergirlie]

I've told my story before, but here it is again.

A few years ago I had $31K in debt and was underemployed, spinning my wheels, living off the credit cards. Not fun, very stressful, sickened and heartbroken at what I had let become of my finances.

I got busy. I created a job for myself with a former employer, started catching up all the other bills I was behind on. It took a year or so to become current with everything. Then I got myself a Dave Ramsey emergency fund, but I kept it at $2600, which was 2 months of bare bones bills as my job was shaky at the time.

I couponed, I learn to cook more from scratch (still working on this), no eating out, cable tv went, I quit smoking. We together worked odd jobs, delivered pizza menu's in the nieghborhood (paid to walk and exercise!), we cleaned 2 office buildings every weekend for almost a year. We dumpster dived! We hauled scrap metal in the truck. We bought storage units that went to auction, we had massive yard sales and craigslist sales. We've eBayed and Half.com'ed a lot of stuff too.

The debt is gone, in some ways we've had a lot of fun along the way. The satisfaction that I took control of this aspect of my life is the greatest gift to myself. Paying off that debt, I was never so proud to do so.

No I've got a healthy 6 months+ in an emergecny fund. Haven't bought a "new to me" car yet, as we don't really need but do have savings goals we are working towards all the same.

I had a bit of a set back as we had to use almost $8K of my savings this winter, but it's also been all replaced again. Life happens sometimes.

[Bluebird9]

That's awesome Denvergirlie! I'm interested in learning more about Dave Ramsey. I like the debt snowball concept. I can't wait to be where you are now! We're plowing our way into school debt that will hopefully be "good debt," and I can't way to plow our way out of it and be able to handle it when "life happens" as it likes to do.

[dbsam]

I went from in debt to comfortable…
I moved out on my own at age 17 in 1983. Although I worked a full-time job and a part-time job they were very low paying and I accumulated debt. I was also going to school full time and took out loans. (I didn’t get any sort of aid with school.) Then at age 20 I married someone who also had a low paying job. Part of the debt was bad luck (cars breaking down, etc.) and part was over spending. I would get depressed and shop. Strange, when I had no money I never looked at price tags and purchased expensive items, now I look for sales, buy inexpensive clothing etc. Our take-home pay did not even cover minimum balances on the credit cards. Having no cash, I couldn’t afford to shop smart. E.g. I had no money for lunch so I would go to Marshall Fields and charge an $8 salad (in the early 1980’s). At age 23 my husband left me and I took on all our debt -it was overwhelming. I took on all the responsibility because it was all in my name and I didn’t trust he would pay it. I started paying off one card, one consolidation loan, and one student loan at a time. (my credit suffered) After finishing college my pay increased steadily which helped tremendously. I am proud of myself for paying every cent. Sometimes I think it was foolish when others around me were negotiating lower balances or filing bankruptcy. But it was my debt and I feel as a result of taking responsibility I have had good financial Karma. My current husband did not want to marry me until I had my debt paid off – he always paid cash for everything. I understood and we married in 1992. It took me ten years to get into and out of debt.

I am not as frugal as many on this board and could have saved much more than I have over the years. We also spend on certain items, like furniture, electronics, organic food, but look for bargains in other areas. We’ve had a great life, no debt (except a small house payment), and paid cash for our last four new cars, etc. It is possible. I stopped working when I had my children and I get a little nervous knowing how quickly unexpected expenses can knock you off your feet (I am at the hospital right now with my daughter and just paid a $5k bill that isn’t covered by insurance. We’ve had many medical expenses since having children.) Having that emergency fund is so important. A year ago my husband was laid off for nine months and we were alright. (He didn’t collect unemployment because he thinks it s/b for people who have no savings – I disagree and feel he s/h collected. Anyway, we were able to live off savings.) If our savings dips too low, I will go back to work.

I still have fears of being back in debt and do some strange things. I’ve always stock piled toilet paper and laundry detergent when it is on sale. My husband, who hates clutter, would rather I didn’t but it gives me a sense of security. I remember what it was like to have no cash and run out of both of those items. I also tend to stockpile food which isn‘t always a good idea. Our pantries are over-filled and then I end up donating food. But I figure it goes to a good cause so all is fine.

We have areas we can improve on like increasing savings, retirement, college funds…just writing all of this and remembering the struggle has motivated me to make a plan to work on those items. Sorry for the long response.

Good luck to you…It can be done and you will feel great once you accomplish your financial freedom.

[sunnysandiegan]

I also left home at 17, married and divorced young, and then put myself through college. I was okay during college financially due to hard work and good grades. Once I was out of college, though, I couldn't find a good paying job due to the economy (mid-90s). I worked every temp job I could get my hands on, but kept slipping under financially a little more each month. I wasn't lavish in my spending, but I live in a high COL area. I had good credit and had to use it to live for awhile there. I racked up some credit card debt and then my student loans became payable. When I finally got a long-term temp job, I was able to start chipping away at the debt. I created a G.O.O.D. plan (get out of debt) on an Excel spreadsheet. (My degree is in finance and my temp job was at a credit union.) I really got a kick out of seeing how I could play with the numbers in my spreadsheet and it inspired me to keep at it. I got hired full-time with benefits in the securities subsidiary of the credit union doing finance and marketing (my degree was a BBA with concentrations in finance and marketing). This was after I temped for four key people at the credit union. In my full-time career, I worked with a lot of aspects of money and investing, etc. It paid off in many ways.

I ended up helping friends and future clients to get out of debt, too. Very illuminating!

Fast forward, I am married to the love of my life and we have a daughter and are doing well. I my life!

[dbsam]

Originally Posted by sunnysandiegan

(My degree is in finance and my temp job was at a credit union.) I really got a kick out of seeing how I could play with the numbers in my spreadsheet and it inspired me to keep at it. I got hired full-time with benefits in the securities subsidiary of the credit union doing finance and marketing (my degree was a BBA with concentrations in finance and marketing).

I also have a financial background; my degree was in accounting. I think it helped me to see what was possible and also gave me the earnings potential to pay off my debt and save for emergencies and retirement.