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Zeta Taskforce linked me here. I'm 27 years old and became debt free last Friday. The backstory (won't be too e/n I promise  ) - Grew up in a family that tended to rack up a bunch of debt. They'd get loans to pay off loans and all of that (which never turned out like they hoped) and the mentality continued with me quite nicely. I was in debt since 17 (I had to borrow against my parents who borrowed against the bank) for $2000 to pay for a new engine to a POS car I never wanted. When I was 18, I got a CapitalOne card with a $300 limit, which I proceeded to max out in the first week. When I heard it was declined, I thought it was strange because how could I max out the card so fast!? For college, I lived off of student loans; I did work jobs but that was my "fun" money which meant drinking, drugs, video games, eating out, etc.I always continually maxed out my credit cards but poo poo got a little too real when I maxed out all of my cards, which had a collective limit of $4000. Except I had about $100 in the bank. I had to make minimum payments of about $150 by the end of the next week. I would get a paycheck but most of that was spoken for with rent and utilities. Student loan aid wasn't going to come in until the next month. So I scrambled onto eBay and pawned off almost everything I bought with those cards, including a giant Sega Saturn collection, an unopened 60 GB iPod Video, about 50 DVDs, and an expensive sound system. I was lucky to get about 30 cents on the dollar (and a huge scammer headache with the iPod Video). I was glad to make enough money to make the card payments but this was rock bottom. No, I didn't skip a payment but that would be suicide since I borrowed so heavily for school that a late credit card payment could have sunk me since I borrowed so much private student loans. I worked my rear end off in the next several months to get the balance paid off. I still kept borrowing student loans like it was nothing and graduated with a $87,000 student loan tab. Minimum payments were about $800 a month and this was in December 2008, when poo poo was getting real, economically. Fortunately I had a good paying job out of school. Before that offer, I was so worried that I'd never find a job and would have no way to pay off all of the debt I accumulated. So when I graduated, I vowed to myself to pay off the debts and be forever debt free. Four years and two months later, I paid off over $100,000 worth of debt ($95,000 for student loans including interest, $6000 in credit card debt, and another $6000 in car payments). How I did it: 1) I lived well below my means. I lived in a tiny efficiency apartment. When I got a job transfer, I moved in with my parents and paid $200/month in rent vs. $700+ for my own place. When I transferred again for my current job, I still live in an efficiency apartment. I minimized entertainment expenses. I held onto my 2001 Saturn until it was destroyed by hail. Then I got another mid size used car. 2) I worked my rear end off. Every overtime opportunity, I took it. I worked a second job while on an internship. Any chance there was to make money, I was on it. 3) I saved my rear end off. You never know if there is an emergency and sure enough, there was a couple of emergencies. Rather than charge it, I got out my checkbook and paid it off. Felt good. Once I felt comfortable with the amount of savings, I paid down debts while maintaining the level of savings I was used to. 4) I carefully weighed out expenses. I deliberately thought out buying expensive items before doing so. It took me a month before deciding I needed to replace my busted laptop. I didn't just go to work and then to home and then to work. However I had to think things through before going ahead and doing them. 5) Kept track of expenses through Excel. I was shocked to see how much useless poo poo I bought. Once I set up my expenses through Excel, my expenses dropped off once I was aware of what I was doing. For now I'm going to keep saving. I'm going to research investing options. I'm going to always have some money ready to pull out from the bank in case of an emergency, even if it does lose its worth year over year. I'm going to set it up to where I'll never have to be debt free again. It's going to take time but I'm excited!
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Feb 16, 2013 00:04
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| # ¿ May 2, 2024 06:32 |
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Two weeks ago, I crossed $250,000 in net worth. Exactly ten years ago, I graduated college with $90,000 in student loans, maxed out credit cards, and $600 in my checking account. I had to quickly sell almost everything I had in order to be able to pay for a security deposit, credit card bills, and gas and food to make it to my first paycheck. I made a lot of mistakes along the way and spent a lot of money on a lot of stupid crap between then and now. The "millionaire next door formula" of ten percent of your age multiplied by your annual income is almost double where I'm at now. I know it's just an arbitrary number but it makes sense for a "comfortable" level. I'm not discouraged by being that far behind, it's an extra motivator for financial discipline. I've been maxing everything out in terms of tax advantaged accounts, have savings accounts, other investment accounts, etc. I got the right foundation in place, now I just need to buckle down these next few years. Next milestone between then and now is just my age * 10,000 for my net worth.
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Sep 15, 2018 22:08
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Purple Prince posted:Well, it's been a tough couple years (I almost went bankrupt at the start of 2018), but I finally paid off all my regular loans and have 3 months of living expenses saved in an emergency fund. That is an amazing turnaround. Congratulations!
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Aug 4, 2019 12:54
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