How I Paid Off Over $70,000 in Debt and Quit My Job
Here is a quick history on what my husband and I did to pay off over $70,000 in debt in a year and how I quit my job even though I made over 2/3rds of our income!
Our debt:
- Honda Civic $19,300
- Student Loan 1 $3,400
- Student Loan 2 $22,780
- Home Equity Loan $24,560
Total: $70,040
Why Pay Off Our Debt?
I wanted to start a family and really wanted to work part time from home. When I added it all up and looked at the short time frame that I wanted to do it in, I cringed. Our taxes showed we made about $130,000 a year. It was great money. But I wanted to quit, and I made $100,000 of it. It almost didn’t seem possible, but I knew the first step would be to become debt free.
I read Dave Ramsey’s Total Money Makeover. And first thing we did was sell our two month old Honda Civic.
We traded it in, and only lost $1,000. As a trade we bought a ’00 Jeep Cherokee for $7,700. I was amazed at how little we lost since I was so scared we would lose so much more. They say you lose a ton of money as soon as you drive it off of the lot, well at least in our case it was only equal to $1,000!
Our debt was then down to $59,440.
The Dreaded Budget
We sold the Jeep CJ7 with 36? tires that was my husband’s baby. He worked on it for hours and was part of our local Jeep club. It was worth about $3,000.
That allowed us to create our baby emergency fund of $2,000 and start to pay off the smallest student loan.
A month later we found out we were pregnant. It was March ’06 and we were due in December. Our countdown had started!
Our debt was down to $55,440.
I never wanted to have to budget. We started to budget and quickly realized we needed to cut it to the bone. I never thought we were crazy spenders, but it all adds up quickly! We canceled cable, and lowered our cell phone plan. Our budget only included the bills, $25 each of our own spending money, and necessities.
As anyone knows who has tried to do a budget, it is hard! Sticking to the grocery budget was the hardest in the first month. We guessed that we should only spend $300 a month on groceries.
I never had to count how much money I was spending before. I tried to keep a calculator in the store with me but I felt dumb walking around the store with a calculator. I felt like it everyone was looking at me add up every purchase, and sometimes I would accidentally hit the clear button. It was so frustrating.
Eventually when my husband and I both went shopping together, we started playing a game to see who could add up the items in their head and guess the total grocery bill. It became a challenge to beat my husband. I have to admit playing a game is a lot more fun than just sticking to your budget!
We never went out to eat, but instead found that some of our friends felt bad for us and would pay for us to go to dinner with them. I hated to feel like we needed charity and I told them over and over that we had the money we just didn’t choose to spend it on going out to eat.
Where could we find extra money?
While we made good money, I had a tight time line. Since I wanted to be home with my son and we only had so many months to do it in, so we did everything possible to make extra income. I found out that if I worked on site with my job I would make $40 extra each day so I traveled as much as I could.
I traveled so much in fact that I ended up over doing it. I was working almost 70 hours per week when I was 7 months pregnant. I couldn’t get out of all of that work because I had gotten myself into it.
I actually had to get a written doctors note asking to keep my hours at 40 per week for medical reasons. That was the only way I could get my company to help with some of my work.
My husband has a very sporadic income as a performing artist. He started doing website design and graphic design to make extra money. He took any job that he could and was working literally day and night on extra projects.
(He worked like a dog for those months and dealt with a very pregnant wife so I commend him at what a great job he did!)
Our tax refund came back, we had three yard sales that summer, we sold a kayak, a wine rack, my weight bench and more on Craigslist. We cleaned out every closet and sold random things on Ebay. We started to realize how much stuff we had, and how much stuff we didn’t need. We thought we were minimalists before.. but we were wrong.
Find out the how I quit in the second part of ‘How I Paid Off Over $70,000 in a Year and Quit My Job ? Part 2?
Tags: Budgeting, Debt Free, debt freedom, finances, Personal Finance
Categories: Debt, Debt Freedom, Finances, Goals
Hi I’m Jaime. Each and every week I bring you the top business advice from the people who know best.
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34 responses
Wow, WELL DONE! What a fantastic leap of faith since you accounted for 100K of the 130K! I’m so impressed with your planning and your courage.
I need some more courage….. maybe i will get it when I decide to retire in 8-10 yrs.
Thanks for your article and welcome to the challenge!
Best,
Sam
It’s so much easier to talk about once it’s done! I remember reading everything I could about everyone else’s story and figured my story might be able to help too.
I feel like you can never have enough courage, and that’s why the leap of faith is so hard. It’s that turning point that makes you go through with it anyway that’s the tough part. 🙂
Thanks so much for welcoming me to the challenge. Under 2 million Alexa ranking here I come!
Warmest,
Jaime
I love the multi-faceted approach to paying off your debt. Too many people just look at their standard paycheck and wonder where the money will come from. Often, it won’t come from there – it needs to be sourced through extra jobs, selling stuff, etc. You guys did a great job! Now you get to do the more fun job of watching your money multiply. 🙂
.-= Ryan´s last blog ..How to do a Home Inventory =-.
Thanks Ryan! When you are living paycheck to paycheck it makes sense that you won’t be able to squeeze a lot out 🙂
Oh and I just read your post, How to Become a Millionaire the other day and it is great! I loved your quote, “It’s only a matter of time.” That is exactly why I started this site.
Thanks for reading!
That’s an amazing effort! Good on you. Only loosing $1,000 on your car is brilliant too!
Love your blog btw.
Thanks for stopping by! I enjoyed reading your blog too 🙂 Good luck with your book!
THERE EVER ONE AND Jaime Tardy
I HAVE READ YOUR STORY AND THANK YOU.I LIVE ON SSI AND I ONLY CAN MAKE $600 A MONTH BEFORE THAT TAKE ANY THING OUT.I HAVE A LOT OF BILLS TO PAY.MY INCOME IS SET.I ONLY GER $674. A MONTH AND I HAVE TO GO TO THE FOOS BACK.I DON’T GET ANY FOOS STAMPS.I GET TO MUCH MONEY.SO HOW SOME ONE LIKE ME CAN DO WHAT YOU DO Jaime.I DON’T HAVE A CAR AND I HAVE TO LIVE IN A APT PLACE.I LIVE DAY BY DAY.SO CAN YOU HELP ME OUT.
THANK YOU
YOUR FRIEND
DAVE P I AM 52 YEARS OLD AND NOT MARRED. HAVE A SWEET GIRLFRIEND.
Great job jaime. You’ve set a good example that everyone should follow to free themselves from debt. Did you, in any way, feel bad at first for giving up things that you value? Just want to check because i know some people who are hesitant at first. They tend to cultivate this hesitance and end up achieving nothing on their goals. I would rather follow your example than suffer from having too much debt and end up looking for means to repair credit rating instead of enjoying a stress-free life.
Just got my job that was going nowhere reduced to two days a week, so I am now ready to move my business forward and make it happen. Any suggestions?
Start listening to the millionaire interviews. They give great advice, and talk about when they first started. Then I’d find a mentor, someone who is already doing what you want to be doing and talk to them. Best advice I was ever given! It’s how I became a coach. 🙂 Good luck!
its really easy to talk about debt when you make over 100,000
how about me n my husband BOTH BARELY make 40,000 and our debt if u include school is almost to that number too. hmmm food, electricity bills bills bills bills…. NOT THAT EASY
my husband was known to make a penny scream. While I did take control of the money years back I was tired and wanted someone else to take better control as we agreed I would stay home and teach the children. My hubby has done a great job and my spending has gone to zero. Every once in a while I will spend it on something that will benefit the kids and the other groceries in which I allotted 50 per person and stick to that for the month. IT is not easy but do able. We will be doing our own garden again this year. Small steps but it feels good knowing there is money left over and to find ways in which to keep it. Followed the advice from the funny man comic and saved 164.00. I wrote and thanked him and he was kind and wrote back and said I made his day. Thank you for interviewing them
As for me it’s quite interesting and extremely helpful experience and example to others!
I’m impressed with your resolve.
I like three things here:
1. The courage to let go that brand new car (two months, that is till new?) to trim the debt a little bit
2. The courage to go on and on until the debt is trimmed further, and the
3. We were pregnant part (no offence)
Would be amazing to pay off such high debts. Selling things on craigslist was a rather smart idea. We typically recommend that consumers sell things they don’t really use as you’ve done.
I think this is awesome! I love reading about other peoples Total Money Makeover journeys! I have been working on my TMMO for a few months now. I have 5 of 13 bills paid off! I have also been blogging about my TMMO to not only help hold me accountable, but to also motivate others.
Great post Jamie. A lot of guys can understand how your husband feels about his Jeep
I just want to say congratulations. That’s quite a feat!