Who doesn’t want to be part of the debt-free club? Not owing anything to anyone is a dream for most Americans. I’m going to bust my ass to make it my reality. It’s something I’ve been working on for a while now, chipping away at slowly but surely.
Now I’m going to be able to do this a lot faster than most people as I don’t have a mortgage and have a lot less of the more common debts. I have a student loan, a vehicle loan, and 4 credit accounts (not all cards). The breakdown of my debts is, at present:
- Credit account: $6550
- Vehicle loan: $2140
- Student loan: $1550
- Credit account: $990
- Credit account: $766
- Credit account: $158
The total is just over $12K. Just a few years ago, that number was up closer to $25K and spread over a lot more accounts, partially because of my inability to say no to stores offering 0% financing deals. By this time next year, I plan to have that total down to less than 1/3 of what I have now. My plan is to follow something along the lines of the very popular Seven Baby Steps by Dave Ramsey.
I know that I’m starting in a much better position than a lot of people and a lot of that is on purpose. I graduated with my B.S. in Computer Information Systems in December 2004. I paid for a lot of that with merit scholarships and grants. The total of those loans was about $5000 when I graduated. It was a satellite campus of Indiana University. I lived with my parents and worked overnights as a maintenance man for a Burger King while I was in school. I took awful jobs after graduation until I found what I have now. That took just over 5 years after graduation to get something that was more than a bill-payer.
The loan for my truck…well, that’s a slightly different story. I didn’t want to do it but there wasn’t a whole lot of choice. I was pretty far upside down on the car I traded in but it was a Volkswagen that was about to need a new transmission. The repairs would have cost more than the car was worth. Almost four years later (and making more than minimum payments), I still owe a pretty significant chunk of change.
One of those accounts had to get opened in an emergency when my dog got sick very recently and had to spend 2 nights at a vet hospital. There was no way I could pay for his care without incurring some extra debt. It’s a bummer but, hey, life happens.
That largest number up there…well, let’s just say I made some mistakes and learned some very expensive lessons.
Overall, I’ve figured out that I can, realistically, pay off all but that largest account within the next 12 months but even that will have a pretty big dent put in it. While I do this, I’ll also be able to continue to put money into savings and a 401K and have a little bit of fun money. This isn’t going to be easy and it won’t be fun. I’ll be sacrificing many things. I won’t be able to go buy the newest and best anything. I’ll have to pass on going out with friends sometimes.
Despite all of this, I do know that it will be worth it once all those balances hit zero and I’m free to do as I like.
This rocks man! I also really like the layout for your blog. I too am working towards debt freedom. My wife and I had 8 someodd credit cards and now we have one. Both of our cars are paid off…but they are beaters and we are milking them along…(a 94 Bronco and a 03 Sentra that is parked cause I hit a deer with it…)
My biggest obstacle so far is the negativity that everyone has of wither or not it can be done, I think that many think I am living a pipe dream. I decided that this is the year to do it. Do or die I will be out of debt this year…I have just over $25K. I too took a Computer Science route but did not finish, as my loans were increasing the jobs were decreasing and for the freelancers…well they don’t need a degree and a bunch of debt to move them along.
What are some of your ideas for making more to get rid of the debt?
I haven’t quite gotten that far yet. My first step was seeing where I was and then getting spending under control. The next step is to see what kind of secondary income I can bring in. There will probably be a lot of trial and error but that’s what this is all about anyway.
Good luck with your quest to join the debt-free club!