Do I want to start with the 2010 version…. or 2020 version? Well, my quest to get out of debt actually started in 2010. The struggle was real and a farce. I had the spreadsheets, the knowledge, the cash envelopes and the network support, but I pranced around the hard steps or would push the debt around to look like I was making progress, but overall I wasn’t. It wasn’t intentional and I really thought I was making good. It was just difficult to give it my “all or nothing”. When I hit a road block (hardship or something I didn’t want to wait for) and then the credit card used or financing secured.

The hardships

Against the average US median salary for my state, I was making a decent wage. So I didn’t have many excuses for not staying on a budget. Even during the times when I was supporting the family on a single income. But my kryptonite is concert tickets, trips that “must be made” and buying my kids all the things to give them all that I did not have growing up.

Overall, I wasn’t willing to give up the credit card. Giving it up meant taking away my life support. Oh, I froze it or shredded it, but if there is a will , there was a way. So I wracked up $5,000 to $13,000 of debt and then I would…

Consolidate the debt with a personal loan. The bank didn’t have any problem approving me for a personal loan because of my stable career, I paid my bills on time and had a decent credit score. Then I would put my budgeting skills to boot with my new lower single payment and my finances were on the right path again. Until it wasn’t because…

I did the two-step (credit card use and consolidate with a personal loan) in a cyclic matter. I actually repeated this concatenation of events 3-4 times at various interest rates (7% – 9% each time).

There was also that time I took out a retirement loan to fund a trip to the tropics (and defaulted on it).

Or the new car loans I cycled through.

Or the time I went back to school to get my bachelor’s degree. Which sounds like a good thing, but the expectations did not meet the additional student loan debt payments I accrued. BTW, my old self would constantly go back to school with enough hours/units to keep my student loans from going into repayment.

Just a bunch of wonky personal finance habits mixed with debt consolidation to fuel that I was “making progress”.

How much debt I had

• Lowest debt amount: $2,625 in 1996
• Debt amount in 2010: $50,480
• Highest debt amount: $93,445 in July of 2019. This was actually the peak amount of my debt too. It peaked because we took our first international family trip to Europe.
• The debt in 2019 consisted of:
  • Personal Loan 7.4%: $15,753
  • Auto Loan 2.75%: $18,309
  • SL1 5.865%: $25,268
  • SL2 3.685%: $19,234
  • CC 0%: $2,516
  • CC 15.5%: $9,965
  • Secret Retirement Loan Debt: $2,710

What really got me out of debt?

A lock-down due to the pandemic and 10 years of budgeting practice. And that is where I will start my story with 2020.

I do not make light of the pandemic. It was a truly difficult time where my kid was having a really hard time being stuck at home 24/7 and losing family members because of the virus. It was crazy, chaotic, confusing and scary.

I am very humbled that I didn’t lose my job and it ultimately led to permanently working from home. But I definitely was working out spreadsheet scenarios on how to survive being laid off.

Somehow, I didn’t overdue it with the online shopping. Not sure why. Instead I re-landscaped the backyard in the home I rent (with the okay from the landlord) and I made it my mission to pay off my debt since I could not attend any concerts or travel.

What skills helped me get out of debt

I almost want to say, “if I can do it, anyone can”. But I will say that I could be the model for the unsuspecting person to reach debt freedom. Many people had faith in me and cheered me on, but my records reflected one big roller coaster that didn’t look promising.

1. I followed the baby steps – I do not want to promote a money guru who feels the need to promote rants to gain attention, but I will remark that the baby steps 1 and 2 is a great place to start a debt-free journey. Save up a baby emergency fund and snowball the debt. My thoughts on stopping retirement investing while paying off debt? I regret stopping my investing for a couple years. As a genX-er, we don’t have the time to catch up with investing like the younger generations. Not to mention there was a bit of a bull market going on. If I had to do a do-over, I would reduce the contributions while paying off debt.
2. Budget every paycheck – I had a lot of practice by this time. It’s a tried and true method for living an intentional life. When I initially started budgeting, it took me a good 3-6 months to really get a full picture of my finances. Don’t give up and give your budget a go with these budget templates.
3. Closed 5 credit cards – Paid them down and called the credit companies up to close my accounts. I actually didn’t get too much kick back from the customer service reps. And I wasn’t worried about my credit score because I didn’t need it any time soon and closing credit cards only causes a temporary dip to the credit score.
4. Remove your kryptonite – I only had one credit card left (as an “emergency fund”) and it didn’t get used after my trip. In 2020, I rolled the remaining non-student loan debts into one last personal loan to consolidate my payment. Due to the lock-down, there were no concerts or vacations to be had. For whatever powers that be, I did not find online shopping appealing.
5. Cash envelopes – I was really into using the cash envelope system to keep my budget. Having a cash envelope for every variable budget category (ex., eating out, grocery shopping, gas, etc…). I had so much fun creating them and sharing them with the #debtfreecommunity on Instagram. But a cashless system was raised to reduce the spread of germs and it was no longer a convenience to take out cash from the ATM since I was working from home. I leaned into my debit card. But for the longest time, this was my system.
6. No spend challenges – I didn’t go crazy with the no spend challenges. If I take away too much, then I bounce with a vengeance. Fifteen day challenges with the DFC’s (debt free community) support is a great method to be held accountable.
7. Meal prepped and home cooking – Meal prepping while I was still going into the office worked to keep me off the vending machines or stepping into the cafeteria. When working from home it was lots of home cooking. Which I found extra hard during the pandemic because there was no outside social activity going on; even the simple “hello” when in line for the grocery store (we had out groceries delivered with Instacart deals going on at the time).
8. Snowflake payments – whenever there was money left over from a bill or left over in the cash envelopes, it got moved into a debt payment. Found money in the couch cushion, laundry or the car, it got moved into a debt payment. All those little bits added up.
9. One car family – A couple months before the pandemic even started, I sold my 2nd car to get rid of debt. In the beginning, it was tough as a one car family when public transit has a self-scoring “D” rating in accessibility. But we have found our groove and our little car keeps us going. It also helps that I don’t commute any more.
10. Got a “raise” – I received a salary adjustment for my position. I didn’t give my budget a lifestyle raise. Instead I kept my budget the same, so I could move that extra money to debt. Ask for what you are worth. It might just work.
11. Got a seasonal job – I got a seasonal job at Tar-jay. I will admit it didn’t last long, because it was hard to work a part-time job on top of a full-time job; both were demanding. But while I did work it, the discount and moving extra money to debt was nice. Although, I did get hit with taxes because of making “more”. So it wasn’t totally successful for me, but it was a great try.
12. Sold my junk – I sold my stuff on eBay and Mercari. Made some decent money from reselling. It started with my own junk. Then I was able to make my way to the thrift stores when the world started opening back up. Ultimately, it wasn’t my thing. But made for a great run. I specialized in concert t-shirts because I live in them. So reselling served two purposes: keep the awesome finds for my wardrobe or re-sell.
13. Started medication – for my lack of solid executive functioning and anxiety. The main reason I started medication was due to peri-menopause causing a trip up with my anxiety due to the drop in estrogen (hey, this is a gen X blog written by a woman). I thought about taking HRT (hormone replacement therapy), but I would rather not go that route right now. Peri-menopause has not been too mean to me and this common medication is working great.
14. Set aside sinking funds – Sinking funds are a major save. It takes a while to really figure them all out. But once you do, it leaves very little error of an unplanned expense coming up. And if one does come up, the emergency fund will cover it. A sinking fund = an expense that comes up usually once a year that you save up for in advance with monthly deposits. Categories like vacations, taxes, summer camp, car maintenance, etc…
15. Applied for the Temporary PSLF – I applied for the temporary PSLF (public student loan forgiveness) when I realized I was likely qualified for it (due to carrying student loans for almost 30 years).

Wrapping it up

By April 2022, I had paid off $67,446 in debt with the tasks above. The remaining $25,999 was in fact forgiven under the temporary PSLF initiative. I feel ever so thankful for the SL forgiveness. I only hope student loan reform continues to take place for the good of all recipients.

I think what it came down to… I knew this was the time to make it happen. Outside activity was unavailable to me. There was a silence in time that I had to bend my will with everything I had to make debt freedom happen. I was able to save up a small emergency fund too.

I feel like the wonkiest person on a personal finance journey, but even wonky people can make a right. And that is my debt free story.