How I Went From $30,000 In Debt, To Debt-Free In 36 Months

Three years ago I was $30,000 in debt. I was making $35,000/year. Today (Oct. 2006), I am debt-free. I paid off all of that debt by changing how I looked at debt, by making the hard choices, and by doing “whatever it took” to get out of debt. I don’t work in the financial or lending field. The only reason I have put my thoughts into writing is to try to help other people. I am 46 years old. This is my story.

Three years ago I was $30,000 in debt.

I had $15,000 in consumer debt (credit cards and an auto loan), and I owed $15,000 to my mom. I felt like I was swimming in an ocean of debt with no sign of the shore.

My income as a real estate agent was around $35,000/ year. Scary, huh?

I got myself into this trouble the way most people get themselves into financial trouble…poor decisions based upon taking the easy, instant gratification, tons of justifications path.

Today, I am debt free except for my mortgage, which I consider “good” debt.

I’m going to tell you how I got out of debt. These ideas are a bit difficult to put into writing, but if you read this article carefully, my experiences and suggestions may help you to achieve the debt-free life you dream of.

What has worked for me can work for you if you are willing to follow a more difficult life path than you are on right now. The choices I made, so that I could get out of debt, only worked for me because I was willing to do “whatever it took” to get out of debt. This “whatever it takes” philosophy was very important to my success, and will also be very important to your success.

Selling your “future self” into slavery:

Most people, including me, prefer to take the easy path in life; “Buy now, pay later”. We do this not realizing that we are putting our “future selves” into slavery for the debt we create today. What you buy on credit today, your “future self” will have to try to pay back when you get your credit card statements.

If you think about it, why would you do that to yourself? You wouldn’t do that to a friend. You wouldn’t do that to your Grandma. Why do it to you? You need to learn to like yourself enough not to create this future slavery. You have a choice. You can look forward to a future filled with freedom and prosperity, or a future of slavery to your debt. Don’t intentionally give up your freedom. Your choices can create a future heaven or a future hell for you.

When I realized this important truth, I totally changed how I looked at life. I realized that, “If I am tough on myself today, my future self will have a gentle, more prosperous life, filled with exciting choices”.

With that truth firmly in mind, I started making the harder choices. The delayed gratification choices. The get of debt-slavery choices. I started walking the more challenging path towards getting out of debt.

How I freed myself from debt-slavery:

Easy Choice #1: I stopped creating more debt. Period.

Hard choice #1: I sold my home and bought a tiny condominium. I lived alone and didn’t need a home that big, and I didn’t need that big mortgage payment. I moved from my 1400 sq. ft. home into a 420 sq. ft. condo. My mortgage payments were cut in half. The money I freed up was used to pay off debt.

Hard choice #2: I got a second job. In my case I created a window cleaning business. Window cleaning is inexpensive to start and fairly lucrative…I averaged about $24/hour washing windows. I could set my own hours to fit my real estate business. I still do this business on a part-time basis. This extra income went to paying down my debt, and now that I am out of debt, is now being saved to buy a newer car with cash. By the way, I will be paying cash for that car.

Hard choice #3: While working on paying off my debt, the real estate market went crazy. Real Estate agents, including me, were making two or three times their regular incomes. In our area this boom went on for about 24 months. Most agents were buying themselves new, larger homes and beautiful, new luxury cars. Not me. I was busy paying off my debt. I admit that I would look longingly at the new cars in our office parking lot, but I knew that the good times would in due course end and those easy payments would starting getting hard to make.

Easy choice #2: Towards the end of the “hot” real estate market I had about $30,000 in equity in my little condo. I sold it and moved into a condo that was a little larger (800 sq. ft. vs. 420 sq. ft.) My mortgage payments were larger, but I used part of the profit to pay off my Mom. The rest was used to buy my new condo. Now my debt was down to about $9,000.

The good, the bad and the end of my debt:

I received an inheritance this year, some of which I used to pay off the rest of my debt. This inheritance was given to me by Betty, a woman I was dating. My sweetheart, Betty, died of cancer in December of 2005 and left me some money from her estate. Even though she wanted me to have the money, I would gladly have given it all back and everything I owned to have her back. The ability to pay off my debt using this money was truly bitter-sweet. While she was alive, Betty enjoyed debt-free prosperity and she knew how important it was to me to be debt free too. She left me once last blessing, freedom.

In the end I received an unexpected blessing which helped me get out of debt faster. I feel strongly that had I not been willing to do “whatever it took” to get out of debt, I may have never received that final blessing. I think life provides us with what we want, if we are willing to pay the price. You may not have to pay the full price to become debt-free, but you have to prove you are willing to pay the full price, before the universe helps you out.

It’s up to you. You can become free of your debt by being tough on yourself. Make the harder choices. Take the more difficult path. Don’t sell yourself into debt-slavery. If you do these things, your financial life will become gentler and easier as time passes. This concept works. Try it, I dare you. Then let me know about your success!