When you have a mountain of debt, it can feel overwhelming. When you start to feel horrible about your debt situation, I always recommend listening to other people’s debt success stories to boost your motivation.
Our motivational story today is about a couple who managed to pay off $50,000 worth of debt in only seven months! That works out to be about $7,000 a month in debt repayment!
$7,000 a month in repayments is an absurd amount of money and is definitely a unique story. This story is truly a testimate of what you can do with hard work, sacrifice, and a determined mind.
Don’t feel bad if you aren’t able to pay that much each month or even come close to making that much. Everyone’s situation is different, and you are going to have to find a system that works for you.
So here’s how they did it!
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This couple made the mistake of living life without a budget. They spent their money freely, and it was causing them to go further into debt.
One day, they finally got the wake-up call to do something about their situation. They were starting to feel sick about how much money was being wasted each month!
The first step to reclaiming their finances was to sit down and create a budget using Excel. What they found was shocking.
They were spending one and a half times what they made each month! Can you imagine making $3,000 this month and realizing you spent $4,500!?
There is no way you can create a better life financially for yourself if you continue to spend more than you make. They took this lesson to heart, got serious about budgeting and tracking their spending.
Budgeting opened their eyes. They knew that there was no one at fault but themselves and that they had to look towards building a better future without dwelling on the past. If you are struggling with debt, here’s a course that has helped many people get out.
$1,000 as Fast as Possible!
The next step was to prepare themselves for emergencies. At a minimum, they decided to set aside $1,000. Most financial experts recommend setting aside 6-12 months worth of expenses, but the initial $1,000 is a great start to anyone looking to repay debt.
Following their budget helped them set aside a fair amount of their emergency fund, but it wasn’t going fast enough. They scoured their home, finding items they no longer used and sold them on Craigslist and eBay.
Before they knew it, they had reached their first $1,000 in their emergency fund!Sharing is Caring!Click To Tweet
No More Credit Cards!
Reflecting on how they got into debt, they identified that easy access to credit cards was the root issue of their debt. They used credit cards as their emergency fund, pushing them further into debt.
Now they had a small emergency fund and no longer needed the credit cards. They celebrated by shredding all 12 of their cards and promised never to let them rule their life again.
Attack the Debt Snowball
Now they were ready to start paying debt back and be free of it forever. Following Dave Ramsey’s advice, they began to attack the debt snowball!
For those of you not familiar, the debt snowball means writing down all your debts and paying off the smallest amount owed debt first regardless of interest rates. For example, if you have four debts:
Debt 1 – $400 at 7% interest
Debt 2 – $800 at 4% interest
Debt 3 – $1,000 at 8% interest
Debt 4 – $200 at 2% interest
You would pay off the debts in order of Debt 4, Debt 1, Debt 2, and finally Debt 3. As you begin to pay off the first debt, you only make the minimum payment on the other three.
This couple managed to pay off their first two debts rather quickly, which inspired them to keep attacking the rest of their debts.
Sacrifice and Side Gigs
Money was a debt-paying tool that was not to be wasted. At social events, their friends thought they were weird for not spending money, but they knew it was for the best.
They began to work as much overtime as they could to increase their earning potential. It wasn’t easy being apart from their family, but it was paying off.
They printed business cards and went around door-to-door asking to do side gigs for cash, which brought them an extra $1,000 a month. Their life was being dedicated to paying off debt.
Finally Debt Free!
Finally, they managed to pay off their debt. The last car payment was a celebration and a relief to get their lives back from debt!
I know with hard work and dedication, you will be debt free! I want to know about your debt story. What is your favorite story about repaying debt? Let me know in the comments below!