How did you acquire $70,000 in debt?
Before I started actually paying off my debt, I had nearly $70,000 in consumer debt. My debt consisted of over $50,000 in credit card debt, auto loans, and Jetski finance payments.
The auto loan is pretty self-explanatory. I needed to have a car, so I bought it with a loan. The Jetski was a terrible purchase, which I still regret to this day. It was a $10,000 spur of the moment purchase that I consider one of my worst money mistakes.
My large credit card debt was created by my desire to create and fund a business. While the business was relatively successful, I continued to fund my lifestyle on my cards. I had around 6 or 7 credit cards, all close to being maxed out.
What did it feel like to have that much debt?
I went quite a few years not even noticing my debt. Since I had it all over the place, I just saw the payments I made to each provider. It wasn’t until I put all of my debts onto a whiteboard when I realized how much trouble I was in. It was hard to take. It felt like someone punched me in the gut and then ran away laughing. During the debt repayment, I felt like I was a person hiding in the shadows trying to get back making the payments and hoping nothing happened. I didn’t have any more money for anything else. I kind of felt like a convict on the run, even though I was making my payments on time for everyone.
How long did it take you to pay it all off?
My debt repayment journey was nearly four years long. I typically consider it just four years because one month here and one month there is nothing compared to the overall journey.
What resources did you use to help you through this process?
Some people are surprised to hear that I used balance transfers a lot during my debt repayment. The reason I did it was to reduce my interest payments. I was averaging nearly 17% on all of my cards. When I would get a long 0% balance transfer, I would take it. I did always make sure to pay off the transfer before the promotion period ended. That would have cost me more in interest if I didn’t.
The other tools and resources I used were budgeting apps like Mint.com. I never used a budget in my life, but the eyes were open when I put everything in Mint. It helped me get control of my spending and work on paying off my debt and saving.
I also developed a saving/debt payment method, which I still advocate to this day. It enabled me to save some money toward emergencies, while paying off my debt. I never used any credit counseling services or debt consolidation companies. I wanted to take care of my issues on my own. I was helped out a lot by the many personal finance blogs who talk about their debt problems and how they got out of the hole. They were inspiring and that is why I started my own blog.
Did you face any challenges along the way?
Of course! Who doesn’t face challenges when paying off debt? The worst was always when an unexpected expense came up in our home or with our vehicles. Luckily, I am quite handy with both, but when I didn’t have the tools, I would have to get the pros to do it. Most of the time, these repairs would be put back on the credit cards.
The worst challenge was when our two dogs got into a fight and one had to have his leg amputated. It cost us $9,000 for the surgery and overnight vet care. We didn’t have any more credit cards to use, so my wife and I had to open a CareCredit card at the vet to cover the costs. That $9,000 set us back about 7 months in the overall debt repayment. I could have been done closer to three years, but life wanted to throw a wrench in our party!
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How did this affect your marriage?
I am a very lucky man. My wife is amazing and supported me during the entire process. Before I started paying off my debt, I was very short with my wife. My marriage was more affected by my small e-commerce business than anything else. I would work all hours of the day and into the early morning. When I shut down my business and started focusing on my debt, it actually helped my marriage.
My wife lent me emotional support. Since the debt was my own and she was financially responsible, I wanted to take care of the debt on my own (minus the dog care debt). She pushed me along the way when times got tough. She really did help me through it all.
What were you doing for a living while you were paying off the debt?
The better question is what was I NOT doing! I have a full time job, which I had when I was paying off my debt. While it was a help, I realized I needed to do more. I have been a “side hustler” for a long time. Since I have some skills people are willing to pay for, I decided to do odd jobs around my community. I helped people create websites, managed people’s blogs, and did offline work for many that I found on Craigslist. I developed a few websites which provided me with some residual income over a few years, which helped. Anything I could get my hands on, I would do. I never stopped working to make extra money and I still do it to this day. I realized I could change my financial life with hard work and dedication.
How did it feel once you paid it all off?
Surprisingly, the day I paid off my last credit card was anticlimactic. I mean, I really didn’t feel any different. It was four years in the making and I thought I would celebrate more, but I didn’t. The main reason this happened was I was ready to move on to the next phase of my life. I was ready to start growing my wealth and investing. After about two months of paying off the debt, I finally realized what I had done and it felt great. I don’t know why it took so long to hit me, but I felt accomplished by that time. That feeling was why I started my blog, so I could share my story.
What practical tips do you have for people looking to pay off their debt?
I have two tips which I try to advocate to everyone. The first revolves around actually paying off your debt. The one thing I see time and time again is so many people are afraid of their debt. They are in denial. You will never become debt free until you start paying it down. It doesn’t matter if you only pay $5 more on your debt. You have to make more than the minimum monthly payments. If you are so far under water that you don’t know what to do, then contact a non-profit counseling agency. There are some good ones out there which will work with you to come up with a plan of action.
The second tip revolves around making more money. The best way to pay off debt is to earn more. Now, this sounds hard for many to do. I am not talking about getting a raise at work, or leaving your job for a higher paying one. I am talking about figuring out how to make more money on the side. Some call it side hustling, but whatever you call it, just do it. There are thousands of ways to earn extra money on the side. You can do it in your home with just an internet connection. You can jump on Craigslist and help people move or walk their animals. Never sit there thinking that money is coming your way. Go out and get it!
To learn more about Grayson Bell and his debt payoff/wealth building journey, you can find him blogging at Debt Roundup.