Free at last! Free at last! For all of my adult life, I’ve had debt. I guess it’s the American way. This week, I paid off a car loan a few months early and became 100% debt free. It was a big goal since I had $39,312 in debt at the beginning of the year.
I gave up a corporate salary over 12 years ago when I embraced entrepreneurship. For me, that meant that my steady paycheck and great benefits disappeared and my rollercoaster ride with debt started in earnest. There were certainly good years and bad years, and for that matter, good months and bad months. But I always felt like my dance with debt was my dirty little secret.
While most of the time it was under control, there were some periods where it was a real struggle, and I felt like I was treading water and praying for the oncoming tsunami to miraculously change course before it swept me away. My low point had to be about 5.5 years ago. Between college tuition for my daughter, some medical bills, other unexpected expenses and a precipitous drop in revenue; I was playing the debt roulette wheel. And I wasn’t winning.
I remember driving to Raleigh for business and on that long stretch of I-85 I heard a radio ad for a program offered by some guru who could help me take care of my debt once and for all. I was usually cynical of those types of programs, but for some reason, the timing and the message seemed right. So I quickly jotted down the 1-800 number and made the call. They were going to send me a free CD to get things started. All I had to do was pay for shipping and handling. I gave them my credit card and hung up the phone, feeling proud that I had made a positive first step to tackle my debt crisis.
Then I got a return voice mail message saying that my credit card had been declined and they needed another card to process my order. Now that just blows. I couldn’t get my “Get Out of Debt” CD because I didn’t have a credit card that wasn’t maxed out. The humiliating irony of it all was not lost on me.
So it’s been a long, slow and mostly steady process since then. I stopped using my credit cards and only paid things with checks, cash or debit cards. Of course, there were setbacks along the way, like when the roof needed to be replaced or the ancient boiler in my basement needed an overhaul. But within my control, I did my best to avoid further damage.
It was at the beginning of this year, however, when I mapped out my goals, that I intentionally put down that I wanted to be debt-free by the end of December. That was powerful, because for the first time in over a decade, it seemed like reigning in all of my debt was within my reach.
I won’t bore you with the sacrifices I made, because I know that my lifestyle never suffered as much as it could have. But I was always conscious when I spent money and did things to make small differences in my budget. Besides controlling my spending, there were three keys to taking off my debt shackles.
Downsized – I sold my house. I realize that most people wouldn’t make such a drastic move, but it allowed me some freedom that I would not otherwise have gotten. It worked for my plans to move out west, so it was all something that made sense for me. Unfortunately, the loss in housing values, the buyer’s market and the many expenses to upgrade the house to make it more marketable all put a squeeze on what I walked away with. But I count my blessings that I wasn’t in one of those twilight zone situations where I ended up in the hole. When it was all said and done, I was able to pay off a few credit cards and whittle away almost half of my debt. Once I was able to get out of the high-interest rates from those cards, I was in a position to stop paying minimum payments and make a bigger dent in my other debt.
Minimized – Part of moving across the country for me was the chance to take my downsizing to the next level. I really wanted to minimize and simplify my life. I realized several years ago that I need a lot less stuff. And I had long admired my friend Beth who was able to fit all of her belongings into her vehicle when she made a big move to New Zealand (after purging a household and years of accumulation). So that became my goal for my move. I have to say that I found it quite liberating to sell or give away 90% of my belongings. And the interesting thing is that I don’t miss any of it (over 10 months later). The money I made from selling off stuff funded my move across country and lightened my load considerably. It’s also given me a new sensibility about what is truly important and what I actually need to be happy. And I can tell you, it’s not about the stuff.
Prioritized – While I’ve done my fair share of shopping over the years, I have long abandoned the need to buy the newest and greatest. Having reigned in my ego, I realize that I don’t need to keep up with the Jones’s to feel good about myself. That doesn’t mean that I don’t have my own ways of splurging, but it’s based on my priorities. My spending is centered around those things that I am most passionate about and what I deem to be really important. I also tend to look at spending as an investment. So I will invest in ways to make myself a better, more fulfilled person. I will invest in my personal and professional growth. I will spend money on travel, education and experiences that resonate with me. Done right, those things always leave me more enriched. I will also invest in the relationships that matter the most to me, but the good news is that most of that investment is with my time and not my wallet.
I would like to hope that you don’t have a dirty little secret like mine, but I’m sure that I’m not alone. We tend to put on a poker face and not let others know of our shame. Regardless of where you are, it’s ok. Just do what you need to do and take one step at a time. I’m proof that it can be done.
