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Becoming Debt Free
Career & Finance: Debt Management

Absolutely ENLIGHTENING.

Why were you inspired to do this?

My debt-load had been growing consistently after graduating from university in 1993. I finished up my undergraduate degree and started working as a Commercial Insurance Broker with a reputable Toronto brokerage. Aside from gas, food, rent and utilities, my entry level salary had to cover a sizable student loan, a car loan, insurance, a gym membership and support an unhealthy relationship with credit cards too. It got to the point where I felt like I was drowning. My stress level went through the roof when the bills came in the mail. I remember keeping them all unopened until the last payday of each month so I could decide how I would handle them. I really needed to get out from under the shackles of debt and get some breathing room. I needed to just get to broke!

What were 3 things you did to make this happen?

The first order of business was to decide to eliminate all use of credit. I put myself on a cash only system. I figured out what was needed to cover gas and food for the month after the rent and utilities were paid.

Next, I allowed myself $15 per week for incidentals and vowed to cut out the Tim Hortons coffees and to bring my lunch to work. Once the cash ran out, that was it for the week - no touching the credit cards.

Lastly, I organized all the credit card and loan payment bills from the smallest balance to the largest and attacked the smallest balance first. So all the minimums were paid on each account each month but every bit of extra money went down on that one bill that I owed the least on. Once that one was paid, the extra cash was put down on the next one and then the next. I did not renew my gym membership. I did not renew my magazine subscription. The department stores were the first to go. Dalmy's, Sears and the Bay, they had the least balances, but the highest interest rates. They were killers. Each one was closed off too as they were paid out. Next went the Visa, which was also closed off. Finally, the horrific Mastercard saw a zero balance, but that one remained open. The car loan was next. The student loan was last to go and finally, a serious celebration was in order because, unbelievably, the Beast had been conquered!

How did you feel once you had accomplished this?

I'll never forget the unbelievable feeling once this process was completed. Total elation the day that last bill was defeated! I wanted to stand on a mountain and shout that I had won. (Kinda like the MLL Icon guy) The war was over and I was finally free. Today, both my husband and I still use a cash system and we have one credit card that is paid off each month. Gone are the days when hundreds of dollars of hard-earned cash are wasted on interest payments. Finished are the impulse shopping sprees and retail therapy resulting in anxiety when the mail was delivered. If it's not needed, it's not purchased and it is absolutely not purchased on credit. If it's something I want badly, I save for it. There is such a feeling of reward that goes along with attaining something after practicing a little bit of delayed gratification. I remember feeling like my debt was choking the life out of me. Getting control of my finances and going through the whole process of slowly, methodically destroying that demon was such an incredible life lesson. It was a painful growing experience, but an absolutely necessary one. I say this with complete sincerity and total belief ... if I could manage it, anyone can.

Additional notes and tips:

One thing that made all the difference in the world was that my husband and I are on the same page with this issue.  We both agreed that no purchases would be made without discussing them and AGREEING to them.  For me, that meant absolutely no shopping on the sly and sneaking the bags in and hiding the boxes under the bed.  For him, that meant no 'toys' purchased on a whim to be justified later at home.  There were to be no surprises on the credit card.

We both committed to the cash-only system.  If the money ran out and it wasn't a necessity, we'd wait until the next month.  Chances were, it wasn't that important anyway.

We pay the full balance on the card each month so there is no interest payment.

We have only one account from which all the household expenses are managed.  It's less confusing to handle the expenses when all funds are in one place and not spread out in various accounts.  This also reduces the fees. Of course, only one partner can be in charge.  Deciding who managed funds better between the two of us was easy.   One of us relinquishing control to the other, was not.  This was a serious challenge for my husband and I to overcome.  Life got a whole LOT better once we worked through this one.

I'd always considered a mortgage to be 'good debt.'  After reading a book on getting debt under control though, I learned that there's nothing really good about debt, regardless of the type it is.  'Mort" means "Death' in Italian and I don't love my house so much that I'd like to pay for it three times over.  A mortgage can be eliminated too and I can't wait for the day we get that monkey off our backs too.  Of course, I replaced "Becoming Debt Free" with "Becoming Mortgage Free" on the Life List.

My husband and I refuse to put things on monthly payments.  We absolutely will not give companies or even insurance brokers access to our bank accounts (as in with a VOID cheque) for monthly installments.  Experience taught me that this practice opens up all kinds of possibilities for errors, and loss of funds.

The new 'saving' philosophy meant learning the pricing on our kitchen and household staples and trying to nab them when they are on sale.  We are fortunate to have some extra storage space in the basement and fruit cellar.  'Stocking up' on the sales and slowly building us our own mini supermarket has reduced the time I have to spend shopping, saved us money and relieved the pressure when it comes to 'last-minute'  or unplanned meals.

One of the surprising benefits of this exercise was the unexpected and overwhelming feelings of accomplishment throughout the experience.  Becoming debt free was a slow agonizing process (especially at first), but it was a liberating one.  And once some momentum built and new habbits were formed, it became exciting - especially as I got closer and closer to the edge of the forest.  Yes, it took time.  The time it took to replace that suffocating feeling with the reduced stress and relief I felt as I moved closer to that goal was worth every minute.  With each passing month, I felt like I was gaining breathing space until finally, I could stand up for the weight had been lifted, breathe deeply and smile.



4/27/2016 3:17:37 PM

bruh why

3/1/2015 12:32:38 PM

Marve...you can totally do it!! If I could manage it, anyone can. Believe me. I was so off base when it came to finances. This process was easy to apply and took some time, but it worked. The relief I felt (and still feel, today, even years later) after accomplishing this goal was so worth the pain of learning the lessons and steps needed to make it happen. I hope you are able to find gainful employment and begin making your goals happen.

6/15/2014 2:04:21 AM

Great story, I can only hope that I can become debt free also. But with extremely high cost of my law degree financed through loans and being unemployed, its a bit difficult. But I am hopeful I will get a job and then I can start tackling this debt. Debt is truly a burden and once that's cleared I know I will feel a big relief. I feel truly impressed and motivated by the steps you took to achieve this goal. Great Job!

1/10/2013 1:31:18 PM

This is a great success story! I totally get the feeling of drowning, the lack of control. I kind of have just been sitting in a little raft being bounced around rather than manning the oars. Thanks for sharing your story. It inspires. I set a plan in action this morning to regain control.

1/12/2012 7:54:32 AM

Great story.  THank you.

3/22/2011 4:45:58 PM

Great story. I need to use this strategy. Some day for sure!

3/19/2011 9:35:10 AM

Awesome Z! Headed there now.

3/19/2011 6:51:10 AM

When I first joined, I was just looking around. I started to write but didn't have time to finish. I just now posted my goal for the debt management. Hoping to add more goals later. Thanks for your support.

3/17/2011 10:25:21 AM

Thank you for your kind comments everyone. I'm happy to hear you've enjoyed the story. Zinful, it's so great that you're making progress with this goal too - it's a tough one but very worthwhile. I checked your page to encourage you on your goal, but didn't find it there. Maybe you'll post soon so we can follow your progress too?

3/15/2011 8:07:32 AM

This is an awesome story. I'm currently going through debt reduction myself (only 3 months in), and I already feel such a lift in my heart and my head. Decisions are almost easier now b/c I'm not using a credit card. Either I have the money or I don't. If I don't, oh well! It just really makes you think about what's important ~ and, what's not! Thanks for the inspiration :)

1/13/2011 8:48:19 AM

Thank you for sharing this realistic plan.Your success is very inspiring.Congratulations!

1/12/2011 11:54:38 AM

Hi Andrea, I think that this is the hardest goal there is. Congrats on your all hard work. Sandra

1/9/2011 1:18:34 PM

That's an honour. Thank you very much.

1/9/2011 7:42:01 AM

Congratulations, we have linked your story on the My Life List 90 (#20) to inspire others. Thank you so much for sharing this great story.

1/8/2011 4:20:10 PM

I like your dedication and congratulate you on becoming debt free! Great goal.

1/2/2011 6:28:01 PM

nice story

1/1/2011 11:06:59 AM

I swear this is true... If I could manage it, YOU can totally do it. Just one little baby step at a time. "Inch by inch, it's a cinch."

12/31/2010 8:11:12 PM

Your story is very inspirational and gives me hope. Thank you for sharing.

11/2/2010 10:06:44 PM

I'm working on the same goal right now but at the other end of the process. I just graduated college with all the debt that comes with it. working on paying it off but it's slow and painful, this gives me hope.

10/19/2010 8:44:19 PM

Thanks for your kind words of support everyone. Butterfly... we did invest in a super fantastic coffee machine for our home and it has been worth every penny. It's made by Jura and it's their Impressa model. Once you try the coffee it produces, you'll never crave another Timmy's or Starbucks. Best of luck to you.

10/18/2010 6:18:13 PM

Andrea, I've been meaning to comment on this one. Who couldn't stand to cut out the takeout coffee?? I'm so addicted, it's making me broke. Great inspiration, thank you!

10/11/2010 11:30:36 PM

This was so inspirational! Great job.

4/27/2010 11:07:19 AM

This is such and amazine story and one that each of us can learn from especially as so many of us are seduced into debt by the big companies. Some really good life changing tips and strategies in your story. Thanks for sharing it!

4/23/2010 6:54:56 AM

Great story!!

Why do you want to do this?

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What is the biggest barrier to your achieving this?