How We Wiped Out $52,000 of Debt in Seven Months
Chris Peach
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Several years ago, my wife Andrea and I were that couple. The pair who drove fancy cars, parked inside the garage of a nice house in a great neighborhood in Phoenix, and always looked like they had it together. Between our two careers—Andrea is a television news anchor, and I’m a firefighter—we made more than $100,000 a year. From the outside looking in, we were well off.

But it was a facade. The truth is that we had a negative net-worth, lived paycheck to paycheck and had zero in savings.

It all came to a head in February 2011, when I got a phone call from my wife that I’ll never forget. She was checking out at the grocery store with our 10-month-old and a line of people behind her when her credit card was declined. In fact, all our cards were maxed out, and we didn’t have any cash. It was a Wednesday and payday wasn’t until Friday. Andrea had no other choice but to leave the grocery store empty-handed.

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We were broke, embarrassed and confused as to how this happened to us—but determined to find out. So we sat down at our kitchen table and looked at the last three months’ worth of bank statements and learned we’d spent a lot of money…on a lot of crap.

Between dining out and entertainment, we spent about $800 a month being the fun couple who always said “yes.” No matter the party, dinner or event, you could count on the Peaches to be there and maybe even pick up the group check. We also spent an average of $1,700 on shopping trips. Target, Kohl’s, Lowe’s—we didn’t discriminate. It wasn’t uncommon for Andrea to drop $300 on a dress or for me to spend a few hundred on a power tool from Home Depot. We liked stuff and told ourselves we deserved it.

At the time, we only had our son—though we eventually welcomed a daughter—which meant we bought diapers, formula and baby food for him each month for about $100. However, our monthly grocery bill averaged $1,200. Yep, we spent that much to eat at home, in addition to the $800 at restaurants and for other fun.

It didn’t stop there. We were frequent fliers of the $20 withdrawal program at the drive-through ATM—to the tune of $240 a month. Our cable bill was $220. Together, our car payments, at $1,210, added up to a few dollars more than our mortgage. And finally, we spent a whopping $650 a month on minimum payments to Visa and MasterCard.

Those are just the highlights, of course, but reviewing these charges opened our eyes to why we were so broke—and how we’d managed to rack up $52,000 of debt in just three years of marriage.

In the coming months, as we started learning more about money, we realized the consequences of our spending habits and debt were even worse than we thought because we were neglecting other important things like retirement savings—I was compelled to invest 11 percent of each paycheck toward my pension, but Andrea wasn’t investing enough to get her full 401(k) company match—life insurance and college planning.

Facing these realities, Andrea and I made the decision to never live like this again, and promised each other we wouldn’t.

That’s how the “Promise Project” was born. We both knew we needed to make some serious changes to the way we handled money—to start behaving like responsible adults. So we wrote up a goals contract—detailing where we were then and where we wanted to be—signed it and hung it in our medicine cabinet. Every day, it was a reminder of our why. We knew the next couple months wouldn’t be easy, and there’d be days we’d want to quit. There’d be less sleep, less fun and more work. But it’d be worth it.

The first thing we did was create a 15-month plan to get out of debt and back on solid ground. That meant we needed to create a real budget, earn more and cut back. We also switched to an all-cash diet, which ultimately saved us $500 a month solely because we actually felt the weight of each purchase, rather than absent-mindedly swiping a credit card.

Peach familyWe wanted a small amount of financial security to get started, so we made a goal of saving  $1,000. Luckily, we had so much stuff in our house that we just threw a few items on eBay and reached our goal in less than a week. Looking back, it almost seems silly how easy it was, but it was meaningful to us. It was our first real win!

In addition to picking up overtime shifts at work, I also found a side gig. Remembering the success I’d had on my pool cleaning route in college, I looked up every pool in my neighborhood and rehearsed my pitch. About one out of every 10 neighbors would say yes, and I earned an average of about $1,000 a month.

For her part, Andrea continued selling the contents of her closet on eBay—popular designer dresses, sunglasses, handbags and shoes. This started out as a painful exercise, but once she realized it was only stuff—and she could potentially replace it later—it was a no brainer. Altogether, these resales eventually generated about $4,000 we could throw at debt.

From there, we focused on cutting back our wants. We bought an HD antenna for free local channels and canceled our cable bill, which brought the monthly bill down from $220 to $60 for Internet only. We used to say that as soon as we became debt-free, we’d buy cable again, but it’s been five years, and we still haven’t. I guess we didn’t need it in the first place.

While we were at it, we stopped going out to eat. This was tough because, as self-proclaimed foodies, we loved dining all over town at the latest and greatest spots. But we realized that a small break from the restaurant world wouldn’t kill us, and we actually enjoyed $10 date nights at home: Redbox rental, $3 bottle of wine and grilled chicken. We also canceled vacations, remembering the promises we’d made to each other. How could we justify going away when our ultimate goal was to pay off debt? Finally, we sold Andrea’s Acura SUV and bought a slightly used Kia. The difference in car payments saved us $500 a month.

Seven months later, we were at the finish line. That’s right—we cut our 15-month goal in half. We’d hustled, hustled harder and never quit.

Our last debt was owed to Bank of America. There was a local branch near our home, so we hopped in the car and paid it off in person. I remember giving the check to the teller and watching her enter it into the computer. She smiled, handed us a slip with our new balance: $0.00 paid in full.

That was the day we first felt free. We haven’t borrowed a single penny since, and never will. Now, we pay cash, save and invest like crazy. In short, we finally have control of our money and our lives.

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118 comments

    I’d like to hear stories of real people I save I don’t go out I shop the thrift store I cook at home. I wear tennis shoes till I literally walk out of them i make coffee at home, I invest in acorns account I don’t frivolously spend I’m one year from paying off a modest car I work two jobs. I could go on and on. It’s easy to talk about these people who spend stupid money. What ab the rest of us?

    Princesskaha there are companies as I posted to Michelle’s comments that will actually pay you to send them traffic which most people are unaware of which is advertising dollars. You probably frequent some of these stores daily. Acorn is one of them. The key is to increase and leverage with a side gig.

    That’s a great point Michelle! I too shop at consignment and thrift stores and cook at home. I’ve run my own business since 2009 and no matter how hard I work or how much I work, I will never pay off my $200K student loan. BUT – I like their commitment to take extra jobs and stop their frivolous spending. It’s nice to hear success stories, learning something, even from the upper middle class!!

    If you’re frugal and you’re still struggling its possible that its your income that’s the problem and not your spending habits. It sounds like you need to increase your earning potential. I agree that there are modest spenders who are still living paycheck to paycheck. The issue for them is their source of income.

    I’m wondering the same! I only thrift store shop, go to Grocery Outlet and spent $20 a week on food, and will still never pay off my $120k+ student loan.

    The bigger question I have about people and student loan debt is was the cost of that degree really worth it? What about going to community college for two years then transferring to a two year institution and living at home the entire time? There are ways to NOT rack up that kind of debt and still get a great education. It’s a conversation more parents and graduates need to start having.

    Right. And the advice that is strangest to me is “pay yourself before your bill”, so are they saying to tell the electric or mortgage company “too bad, i had to pay myself first, so i don’t have anything for you”?

    I went on an electricity fast for three months late spring and summer. Might sound extreme but it put into perspective that I am not sustained by ANYTHING I think I am sustained by.

    It’s a pretty spiritual experience (even though at the time I was working 14-16 hours/night), and the fruits have been HUGE. I now own a company which employs 5 cleaners at well-above minimum wage, and I’ve more than doubled my own income. My personal debt is down from 100K to less than $1500 now (can’t WAIT til October!!! Free at last!!!!), and my weight is still dropping -and health increasing.

    You see what you look for people. Real wealth is nothing like we think it is when we are kids (read: up to age 33 in my case!).

    Lisa, no that is not really the case. I take the same advice – pay yourself first – simply means – as soon as a pay check comes in – put money in savings – then pay the bills from what is left. I used to do the opposite, pay bills first, then I would take what is left and try to save. Problem was it was all spent. Its just a good habit to always sock a % of your $ away. We still spend too much. Great article.

    I agree. Reading about idiots finally getting smart doesn’t help the rest of us who have been scrimping our whole lives.

    Really Fritz – idiots? are you perfect in every way? I am sure you have flaws. I know people who scrimp scrimp scrimp -but they also don’t exercise, eat unhealthy etc. I know people who save and dont spend but fight all the time etc – my point is – people like this are not idiots they are like every one else not purpose. You remind of a school child – calling names to people who are different then you.

    Hi… I’m actually working on getting out of debt. I’m 33 years old My wife walked out on me and our two little girls to pursue a relationship with another man A marriage of 7 years minus 1 day. The day before our 7th anniversary She packed her bags and left for good. I was no responsible for our debt and the girls. 6 months of struggling to make ends meet I’ve decided to move in with my parents. The relief of the pressure of Working and taking care of a 6 year old and a 2 year old was overwhelming and my parents have been a huge blessing… I was lucky to trade in my car for a $6000 Vw Tiguan that doubled the gas milage I was getting with my old Jeep. I am taking the money I had been spending for rent minus $200 a month for food and paying off my debt. My ex wife and myself have racked up a total of $36,000 and although the divorce she is responsible for half of that debt its still in both of our names and with her not able to hold a job I’m still responsible. I’ve actually stopped using Acorns as it takes away money. My next paycheck I will have Saved $1000 for emergencies. Now I’m dumping all my extra money into paying off that debt. Some recent bills like the kids emergency trip and the move out from my last apartment will be paid off September 2016 Then in October I’ll be paying off the Car.In january I will be living in a much cheaper place and In May the car will be paid off completely. assuming I don’t have any other bills that i’ve made or if I don’t get a raise at work or if I don’t loose my job I will be debt free by September 2021 including my student loans. If my wife gets a job and I start getting child support from her thats extra money I will be putting towards that debt and of course tax season that should be an extra $1500 comming back to me each year. So realistically Id say by the end of 2019. If all goes according to plan when I’m done paying for all of this financial mess I should have close to $1200 a month extra to use for whatever I want. Like a real vacation I wanted to go on since I was married. So there is hope and it takes time to get out of the messes but once your out never go back. I’m looking forward to one day having good credit again and getting a house a new wife and raising my kids with Love and Joy!

    WTF is your point? Obviously you would need to think outside the box, or like a lot of people that don’t have that option you just have to do what you can to survive.

    This. All of this. I understand a lot of the principles are the same, but this though is a real experience as well that is the more common across the world. It would be good to hear some of these success stories, instead of the careless spending of the middle class/upper class.

    I am debt free my cricket celfon cost $35 a month internet cost $37 no cable geico 2 car full cover cost $1100 fully paid rent $1100 i invest with acorn n rich uncles n buy gold 22carat 24 carat gold jewelry for investment

    Yes i buy stuff from craigslist swapmeet n thrift store most of our furniture are pick up from street or thrift store n given by friends kids cloths free from friends

    The reality is if we don’t have a degree. We will struggle just to survive. I too have had to work 2 jobs and have my girlfriend work just to barely stay on top. Ppl these days have to average $20/Hr $800 gross weekly per person. If single $40/Hr $1600 gross weekly.

    I feel the same. It’s great this couple could pay off their debt but how about people who don’t spend extravagantly, surely don’t have fancy designer dresses to sell or expensive cars to trade down with? Most of us are in debt because we need the basics and we don’t make enough, even with a side gig. We are taxed to death. The prices of even the most basic staples like milk, eggs and meat have risen incredibly that I find it hard to feed my family of 5 something even the least bit nutritious. I don’t overspend, I try and save and still…month after month, I fall deeper into a hole, just like many average, middle class (if that’s even still a thing) families. I want to see stories about us.

    If your job offers a 401k plan I would invest in it even if it is just 5% of your income if that money is taken out before taxes you will get more back on your net pay because your taxed on less money. Or try to put back at least 20$ a week in a year that 20 dollars will be 1040$ to pay toward debt or whatever. The debt snowball effect is also a good remedy for getting out of the hole

    I agree. This article is nice. But the reality is they weren’t struggling. They were iresponsible with a 100k income. Of course, they were able to turn it around. Imagine this story with a couple making 40k between 3 jobs…

    Amen! These folks have no idea what it is like to go through long term unemployment due to a layoff. Hah! Imagine walking into the WIC office when you never in a million years thought you’d need it, but you do because your child needs to eat! We fell into debt just trying to pay health bills and survive during that time. We didn’t have fancy clothes and such to sell.

    Try checking out the Dave Ramsey plan (Financial Peace University). You can Google or YouTube him. On his show you can fine some “real people” doing the same thing. The result depends on the person and how much income/debt they have. I hope this helps. Good luck on your debt free journey.

    Yuppers.. I was like, “Spend $800 a month on stuff?”.. Well… That’s not very relatable.. We can barely buy enough groceries to last a month!

    I agree with Michelle, the couple in this article are privileged Americans that majority of us can not relate to… Most of us have average paying jobs and rent an apartment and we live pay check to paycheck. We can not make ends meet

    The system is rigged for people like us to fail. It’s hard to overcome when you aren’t starting out privileged like the people we frequently read about. I agree with Michelle too – where are all the stories about the people who hustle like crazy and do the right stuff but never get anywhere?

    There is no rigging anywhere. Anyone can make whatever they want of their lives. The problem is tagg most people don’t have the dedication and drive to get to that point. Not requires sacrifice, effort, hard work and perseverance. the only reason anyone has for not having anything that they want is themselves.

    Luck is the meeting of preparation and opportunity.

    I guess you also have the balls to take the leap when the time is right.

    I don’t understand why do you want to read about that?

    If your looking for inspiration or a how to, wouldn’t you want to read “all the stories about the people who hustle like crazy and do the right stuff ” and then break through and succeed.

    What good does it do to read about people who “never get anywhere”

    @jared Eitiner complaining about being able to make ends but not trying better yourself is just idiotic. My wife and were in the same boat as many people on this comment list. But unlike many we have slowly gotten things better for our family by my wife going back to school for nursing and working her 40 hours a week. At the same time I was working 60 plus hours a week and a 2nd job to make ends meet. It wasn’t easy but we are now able to save money and while I am starting school this fall at the age of 34. So all I am saying is if you settle for being mediocre that’s what you be, but if you continue to slowly better yourself anything can happen. You just have to believe.

    Lol…Acorns is another way for the rich to get richer. Do you really think someone would show you how to make money without them making even more off of it?

    Agree with Mark and Michelle. Their debt was more than I make in a year. However, I do agree with the mentality of slimming down when you can. Shout out to the Mr Money Moustache blog, which is essentially the advice that these people took.

    Except for the 1% in this country no one is privileged. We are all the holders of our own destiny. I would consider myself upper middle class and wouldn’t call myself privileged. I busted my butt, put myself through undergraduate and law school by myself. No matter what your status is you can always change it if you’re willing to change.

    Amen. Get out there and make something of yourself. I’m tired of hearing about “privileged people”. You have control of your own destiny. You can either make yourself great, mediocre, or barely scrape by. If you are not happy making the amount of money that you currently are, change careers, go back to school, get another job. Stop complaining, and do something. We all have the same opportunities regardless of how much money you start out with. I hear too much of the “poor me” mentality for which I have no sympathy.

    Then take what they did, and scale it to your situation. Point is cut out what you don’t NEED (cable bill, eating out, etc) and put that towards debt and savings.

    100k a year is FAR from rich. We, as a society, live beyond our means. It’s the American way. People are constantly obsessed with keeping up with the Jones’s even if it means going broke. The problem lies within yourselves, not the system.

    This is the second question I’ve seen posted about Acorns and no one is answering it. I don’t know why it’s even on here in the first place. It came to me through an Acorns email and never mentioned them.

    I agree the system is rigged for failure, as it is still too easy for people to access credit, which ultimately fails them as a tool for financial success. Ironically, Acorns helps me save with every swipe of my cards.

    Saving money is not about how much you make, it is how much you allow yourself to spend. That is why high earners are often just as broke as low earners. (You make more = you spend more, you think you deserve more). I have had my fair share of ups and downs in my career, and know the story from both sides.

    While it is arguably easier for high income earners to liquidate assets or have more horsepower to save money. The self-discipline required to do so is the same regardless of how many zeros are in your checking account or paycheck. (That is often why lottery winners are often broke shortly after they win regardless of the winnings.)

    I loved this story, and found it motivational to stay the course when I am tempted to spend because I can, instead of within the plan.

    Doesn’t this very story highlight that ‘the system’ isn’t rigged? It it were, presumably they’d find it much harder or even impossible to get out of that level of debt. Having access to credit doesn’t mean you have to spend it and live outside of your means. That’s an issue of willpower, nothing else. 100k in Phoenix is comfortably enough to live on. It’s not enough to live on if you subscribe to lifestyle inflation like this couple did.

    All it takes is discipline and a willingness to give up some creature comforts. It’s not a special formula or magic key or even needing advanced education to understand. It’s much simpler than that but most people find it hard to knuckle down and sacrifice. We live in a society that has instilled this idea of rewarding ourselves for the smallest things. If you need to pick up an extra job to pay down debt, you should do that. And – working more hours means you’re earning and not spending money to kill idle time.

    So true! People are focusing on the fact that this couple made $100,000 a year…A) that’s not THAT much – my ex and I made about $80K and we were FAR from upper middle class and B) no matter how much you make, there is always a way to cut back and/or pick up extra income. It’s much easier to complain, though…

    Wow, so all I have to do is stop spending my discretionary income on useless crap and use that to pay off debt? Who would have ever thought of that? Genius!

    The only problem is that most people don’t discretionary income. My chance to get into the middle class was college. Now my extra income pays my student loans. People with privilege have trouble seeing passed their own privilege.

    Really surprised by the comments about these people having an unattainable income. There are two sides of this equation: income and spending. They put effort into both. So did my wife and I a few years ago when we cleared out $20k in debt in about 8 mos on a single income which was definitely less than theirs.

    If your spending is already pretty modest, you need to focus on income if you want to make financial progress. Your job is a trade for your time and the value you bring in that time. If you’re providing minimal value, go learn to bring more value to people and to your company. Say yes to every opportunity for more responsibility.

    A super accessible option for most people is sales. Sales is incredibly challenging, yet it’s the core of every business and therefore highly valued and highly compensated. Anyone willing to apply the necessary diligence will find there is no shortage of $100k+ opportunities if you bring enough value to others. “to sell is human” is a great read on the importance of sales/persuasion skills in virtually every other job, too.

    Opportunity abounds, go get it!

    “Your job is a trade for your time and the value you bring in that time. If you’re providing minimal value, go learn to bring more value to people and to your company.”

    Great. I’m a teacher. Yes, income is the source of my financial struggles. Apparently, providing minimal value to my people and company is my problem.

    Don’t get tens of thousands of dollars of student debt for a degree that YOU ALREADY KNOW won’t pay well enough for you to payback those debts. It’s really pretty simple.

    I would love an article that shows how everyday people can pay off their debts. I have less than 50k in debt (including student loans and car) and I make less than 50k. Single mother working two jobs with no help from my exhusband. I don’t have any designer clothes to sell. I already cut out all nonessentials. Give me a quality article.

    There was a lot of excess in the beginning of this article, but there is also a lot of whining and victimization in many comments. Most Americans are very privileged. Many in the world don’t have a car. Many would never imagine spending $200k on schooling. There are many “necessities” that aren’t really necessary. I think the lesson to learn is that wants and needs are very different. If you want something different go make it happen. This guy went and hustled to become a pool boy for extra income. He wasn’t above that because he was already a firefighter.

    Additionally, I applaud acorns for not making this article about them. It’s about being financially savvy and getting out of debt. It’s a lesson that I know that myself and many Americans can use.

    I’m thinking the same thing. Everyone is whining about how they can’t do it because they don’t make as much is that couple, which is completely missing the point. It’s much easier to complain than to do what is needed to get yourself out of debt.

    I’m fine with all this but a $3 bottle of wine just sounds plain trashy to me. I could see going to Trader Joe’s and buying a $7 or $8 bottle of wine but only a bum living on the street drinking out of a paper bag has a $3 bottle of wine. That’s just disgusting. Reminds me of that cheap skate show on TLC where people won’t buy toilet paper and use their hand and wash it off in the sink. I think these folks got a little carried away. The trick is to do what they described without becoming obsessive and doing things that make other people think you have no class. It’s called moderation.

    Im not buying it. 52k in debt in 7 months on 100k income? Thats over 7k per month in after tax income. If you make 120k per year or 10k per month you only get around 6k after taxes. Even with side jobs of 1k per month there is still the matter of basic bills to pay even with cutting back. The math just doesnt add up…

    The easiest way to reduce your debt is to invest in future earning potential. If you make mediocre income and live paycheck to paycheck, take a night class or two until you qualify for a promotion or can apply to other jobs. It’s simple to sit there and say you make modest income and privileged people make it sound so simple…but last time I checked, modest to low income people get more than enough financial aid from the federal government for a chance at getting a degree from a community college. You don’t have to be smart, privileged, or drink $3 bottles of wine. You need the drive to improve upon your life. This couple found that drive and were determined to fix what they had as a problem. Some of us that ate privileged came from nothing and worked our hands to the bone for everything we have.

    Modest income people don’t qualify for government aid because they earn a more than the programs allow, that’s factual. Food banks will help some and occasionally but these things were never designed to be permanent fixes and shouldn’t be abused. That drive and determination you say we lack is exactly what we use to keep food on the table for our families.

    I agree with Michelle. It would be easy to get out of debt if you spent $800 a month eating out and $1200 a month at the grocery store, but that’s almost what I bring home in a month. I struggled to support a family of 5. My husband is currently out of work on doctor’s orders. We don’t go out to eat, to the movies, shopping, ect. I had an accident a year ago that put me out of work for a couple months and we’ve been struggling to stay afloat since. Evey extra thing there was to cut has been long gone and the stuff we have we can’t sell because it’s not extra stuff and we need it. To reiterate Michelle’s question, how do real folks like us get ahead when there isn’t time or money to “go back to school” and no education to get that better job. Btw, I already work 2 jobs and my husband does what he can to earn while he can’t go to his real job.

    Sounds like a great article that simply reached a lot of the wrong audience. This article is about growing not surviving.

    As mentioned in a previous conversation college is a great time to get you that great job! If you went to college and your education isn’t paying the dividends you thought then you may have made a poor choice in career field or a bad investment in education. Or you may not have gone to college which is a poor life choice period.

    Personally, as the son of a poor plumber that had seven children, I was able to triple my income through full-time hard work, and full-time school. I got one degree after another and racked up some debt. Regardless, I increased my income progressively over the last decade. From $12.50 per hour to just under $100k. This is because I chose a career field that would last and pay dividends. I invested and managed my household margins.

    My wife and I had a lot of debt like this couple and we worked through it in a similar fashion as all of you. Being frugal and paying stuff down when we could. The thing I learned is that wealth isn’t how much you make but the difference between how much you make and how much you spend. I am sorry to those of you struggling on single/lower incomes. I get it as I have been there, but I guarantee even you have things to cut down on.

    It is never too late to get an education. In my classes in college I sometimes was studying with people in their 70’s. As far as time. Plenty of online schools exist and if you have time to read stuff like this and respond. You have time to put it an online assignment, just reallocate some facebook time to progress.

    Needless the say the system isn’t rigged, and not only people who start out well off can be like this couple. I am living proof of both. I am just honest enough with myself to admit that my monthly expenses are a result of my life decisions. Even my children, who are the best thing in my world, are choices that I made that increased my expenses. I have to embrace that I am not entitled to any privileges simply because I exist on earth.

    I exist as an adult, therefore I am obligated to provide for myself. I chose to have a family therefore I am obligated to provide for them. I chose to buy a house therefore I must find a way to provide for my home, etc. Some of these things are necessities, but still they are my necessities and therefore my responsibility. Not the systems and not my ancestors. Once you embrace that I think you will stop finding excuses for why you are not progressing, because all that is left is to find reasons to succeed.

    Wow. I’ve been to college..have a bachelors & while I was working on that got a technical degree at the school down the street. I work 2 jobs. And work overtime at my “college related” job and can still barely make the monthly bills for me & my 13 month old son. I’m a single mom paying daycare that equals our monthly rent. If you need to know the figures that’s $3200 in rent & daycare alone a month. I net $2600 a month after Uncle Sam hits my paychecks.and no I don’t get it back when I pay my taxes because the only write offs I have are $1000 for childcare & no earned income credit. I get a little for my HSA …. But if I put more in my HSA I wouldn’t net enough to pay the bills….I already don’t net enough. And child support is a joke. It’s mandated. I get nothing. I hate America right now,

    Wait, if daycare is $1000/ month, then your monthly rent is $2200? And you bring home $2600/month? And you hate america? Maybe my math is off, but something is not adding up. Perhaps start off by finding a cheaper apartment that’s not $2200 a month? Daycare will eventually end and your child will go to free public school. And if you’re working 2 jobs and overtime with a bachelor’s degree and a technical degree then perhaps you chose the wrong profession if you’re netting $2600 after 3 jobs and overtime.

    I was trying to figure that out too!
    $2200 for rent is crazy! Most people’s mortgages are less than that!
    But of course, blame America.

    Wow. First, there are complaints about the couple being so privileged that they had the ability to rack up a crazy amount of debt on a life they clearly realized, at their breaking point, that they couldn’t afford to live. There’s nothing privileged about that; it was about poor financial decisions being made and then learning from them. Second, there was a complaint about the price of wine they were drinking.

    What is wrong with you people? Ok, yes, obviously their debt, and how and why they accumulated it, stemmed from bad decision making. But once the lightbulb came on and the realization hit home, they busted ass. They analyzed every tidbit of their lives to see where they could cut back, and they succeeded.

    I have no issue whatsoever with the couple in this article and what it was about. The ultimate point is that anyone, at any level of income anywhere can get into financial trouble, but to come out of it, you have to figure out how you got there to begin with and learn from it. The sad reality is that not everyone does.

    I may just go ahead and by $3 wine myself to raise them a toast.

    This really sounds like the “Dave Ramsey” plan… right down to the saving the $1000 for starters. For those of you talking about the system being rigged, or asking about “What about the rest of us”…. spend a month listening to Dave, he’ll help you out (quick google search and you can find his free podcasts). I don’t know why you all think that this can’t apply to you just because you don’t make 100K. The only difference is that instead of 7 months it may be a few years. I’ve heard a ton of stories in the year that I’ve been listening to Dave, and none of them are beyond the point of no return. So what makes your story special?

    Amusing to me that people in this country are still naïve enough to think that anyone can go out and succeed and if the person fails then he/she must simply not be working hard enough. Easy to blame victims. My wife and I have good jobs and earn more than the couple in this article, and in a location with a lower cost of living. We realize we are extremely fortunate, but we can see past our privilege to all the people who were born without adequate access to decent schooling or even essentials like nutritious meals, adult role models, or an emphasis on basic literacy, for example. Look at various slums or Indian reservations with rampant unemployment. Do you think those fellow citizens have the same advantages you or I have? Parents who spend time with us, encourage us to learn and explore, good teachers, good libraries, an emphasis on higher education? Hate to break it to you, but all men (and women) are not created equal. Some have more native intelligence, some are healthier, better looking, some have parents who help with college costs while for others college isn’t even an option. For some the choice is not whether to downsize from a $7 bottle of wine to a $3 bottle of wine or to simply “find” a better-paying job (as if it were a Pokémon Go character to collect on an app). The goal is to obtain a job, any job, that pays a livable wage.

    We are in the same boat, but we make about half annually as a married couple, about $55,000, (before taxes, health insurance and 5% into my 401k). This story is inspiring, but seems farfetched to our situation. I bartend most weekends, but sometimes it’s so slow, I hardly make anything.

    @Dan… Are the people in the slums who are struggling to make their basic needs being granted $52K credit lines? Are they financing Acuras? There are people out there who have a real struggle and may be victims of bad circumstance, yes. But I’m not going to buy that the people who have access to this information and who are both educated enough to land on this page and comprehend this article can’t be successful.

    My privileges were that good middle class family, great public education, and much support. But with mild autism and very little higher education (a few community college classes), I’m still grossing 100K+ (more if you factor part-time ubering). If I can do it, there are a ton more who can do it too.

    So sad to have people be so negative. Who cares if they used Acorns this is a story about money and controlling your money – saving it and also reducing debt. Anyone who has 100’s of thousand in student loans is insane. Why in the world would anyone take on debt of that magnitude and complain about how other people spend money. People place too much value on things and never realize the importance of hard work and self control. We all make mistakes but don’t call out people when your own house in order. I sell, purge, barter and enjoy what I can but I have learned and now enjoy a much simpler life. Count on cash it never allows you to spend more than you have.

    I feel like the negativity in these comments stems from people being fixated on the $100k that this couple nets. Yes, that money (pretax, of course) is a nice sum. Yes, in many parts of the country that income would provide a level of comfort that a lot of people will never, ever realize. That is not at all lost in this article.

    The general theme here, is that even though this couple, earning as much as they did, attempted to live a life they weren’t able to live…because they were living beyond their means. Understandably, there are many who are in situations where living beyond their means is a necessity at times to put food on the table, provide clothing for their children, etc. That, unfortunately, is reality. This article is not attempting to push that aside or glorify the life choices this couple made.

    What this piece IS trying to do, is spark some questions. How did I get into the debt scenario I’m in? Was it out of necessity, due to an emergency or unplanned scenario, or was it because I wanted things that I didn’t need, or more importantly, couldn’t afford? What can I, or do I, need to do to get ahead?

    Some people may look at their earnings and assume they need to uphold a certain status to back that up, regardless of what their true overhead is. Better yet, they may look at what they’re earning and assume their peak is even higher and eventually they’ll pay off what they owe.

    For this couple, they had their “oh shit” moment at the grocery store. They realized this wasn’t who they were or how they should be living, and that they weren’t priveleged or entitled, but careless and stupid. They realized they already had everything they needed, and didn’t NEED anymore of what they WANTED. It seems they also realized that the moments in life, with each other and their kids, neant far more than the stuff they bought with plastic.

    This isn’t meant to be a rags to riches feel good story. It’s meant to illustrate the choices you make and their impact on your life. It’s meant to help recognize where you are and where you need to be. For this couple, it was a 7 month endeavor. For some, it may be a lot longer.

    I’ve been reading these comments and I agree fully with Bo Swan, I grew up in East Oakland, in the “ghetto”, dropped out of High School, etc..but when I was younger, I taught myself a skill set that I could turn into a career.

    At the age of 20, I took a phone screen(Not my first by a long-shot, maybe # 400?) at a company called Host Gator in Houston, Texas, I passed the phone screen for the Linux Systems Administrator role, moved to Houston with a small signing bonus, my decision the day the signing bonus came in the mail was “Cash this, and I can eat good tonight, but I’ll also have to move to Texas, don’t cash it and my brothers and I will figure it out.”

    I cashed that check, moved to Houston the next week and after a few years I’ve gone from living in the “Ghetto” to living up the hill from the neighborhood I grew up in, without a High School OR College Education.

    I’m not going to bad mouth anyone, but I will say that the mindset I see in some of these post would have held me back from learning the things I needed to know to take myself out of the situation I was in.

    I didn’t come from a family with tons of money, I grew up in a 2 bedroom apartment with my 2 brothers, my mom and my aunt. I took it upon myself to learn at a young age. Now I’m 26, live in a nice condo up the hill, still working off debt none of it caused by student loans, etc..

    If you push yourself you can get into these higher tax brackets no matter where you’re from.

    I see so many post complaining it is impossible to pay your debt off. If you break it down the formula is simple concentrate on paying one debt off while doing minimum on the other debts. As you pay one off move on to the next debt you want to pay off ( should be the one that carries the highest interest rate). Get all those paid off the. Tackle student loans. It can be done. I had done it until I lost my job. Now I have a new job and am working off the debt I created to survive until I got a new job. Good luck to everyone.

    I’m half and half on paying off the highest interest loan first… yes, it makes the most sense mathematically. And if you’re disciplined enough to keep going until they’re all paid off, then go for it. But I also understand the psychology of Dave Ramsey’s “debt snowball”— that is, paying off in order from smallest to largest no matter the interest rate. Getting those little wins along the way is a way to help keep the motivation to pay everything off going, and many people may be otherwise discouraged if their highest interest rate also happens to be their largest loan… and that loan takes the longest to pay off.

    This isn’t helpful. These people were just stupid with money. They waited until their credit cards were declined and maxed out before they even looked at their finances… Now, imagine they had children… They wouldn’t have been able to pay that much off in 7 months…

    Nevermind, they did have one child. But imagine if they had 3. And paying cash for things is dumb. If you are able to get a cash back credit card and don’t, it’s like throwing money away. I have a Citi Double Cash card and in the 9 months I’ve had it so far, I’ve made over $800. And you could argue that you feel the brunt of spending when you use cash, but I have it set up so that anytime my balance goes over $100 on my card, it sends me an email that tells me the total of what I owe including pending charges and that email is sent immediately after purchasing something.

    I believe that almost anyone willing to sacrifice and work hard can get a good paying career. At 17 I was homeless. I joined the military (mind you, I’m a 4’10.5″ 95 lb female). In the military, you are PAID to be trained for almost any job you could want. I got out at age 20 and immediately had a heck of a resume complete with medals and commendations to get a fairly high paying job as a paralegal. Most people aren’t willing to give 2-3 years of their life to Uncle Sam. Oh well. Quit complaining. If I can do it, anyone can. Now I’m 47, a widow with a child and working again for the first time in over 20 years as a homemaker. It’s HARD. My car is being repoed. Just a Subaru Legacy that’s 7 years old. No vacations LOL. If I want more, I’ll work more hours. Despite chronic pain, herniated cervical discs, clinical depression… It’s all on ME. That’s just life.

    Paying for things in cash isn’t dumb at all. It holds the spender accountable for every transaction. It makes a lot of sense. Some people need that accountability because it’s a reminder that once that physical cash is gone, it’s gone and there isn’t any more to spend. Easy experiment – put a $10 or a $20 in your wallet and see how many times you favor your debit or credit card over taking that cash out and paying. You might find that the cash sits in your wallet for a week or two, maybe even longer, because you have to think about spending it before you spend it. Even if you do break that bill, you’ll probably still find that you’ll hold onto the change for quite a while. It can be far too easy to swipe a credit card because there’s no physical cash being transacted. It’s really easy for people get wrapped up in that and then assume they’re still being responsible borrowers because they’re at least making the minimum payments each month and are paying them on time.

    As for cash back and rewards cards, those are perfectly fine if you’re living within or below your means and are spending sums of money that you can easily pay off. For some people, it’s a great way to leverage credit. For others, it’s a slippery slope because it incentivizes them to spend more and more, and they justify it because they’re getting a percentage of it back. They might think, “Well, I’m spending x amount, but i’m getting 2% back in cash, so I’m actually only spending x amount, so it’s really not that bad.”

    Again, the story wasn’t glorifying the situation, or the choices that were made leading up to it. It also certainly wasn’t necessarily saying “Hey, we paid of $52k in 7 months, and you can too.” They could not have done that on their salary alone; very few can. They got really creative, put a strategy in place and became extremely discipline in adhering to it. That illustrated the significance of recognizing the problem, determining how and why it occurred, and figuring out how to solve it. It can be REALLY easy to point the finger and say “But wait, they bring in 6 figures, how did they let this happen?” or “Well, I manage my finances this way and this is really what they should have done.”

    Literally everyone has a “lesson learned” moment in life. Obviously, this was theirs and it looks like they have a plan in place so that they only had to learn it once.

    Great story, glad to hear you made it. I also cut back and was able to save more. It’s amazing when you start looking at everything you spend money on and how fast it adds up.

    I also canceled cable, (seems to be the easiest and biggest savings), but I did miss my news stations so I did get PSVue, it was only $30 a month.

    Now it’s time to start the “selling” phase, less for the money and more to just get rid of all this stuff I don’t need and maybe make other people happy.

    Best of luck to everyone who are saving and to all that are about to start.

    I graduated in 2009 as a finance major (in the thick of the recession) with $150k in student loans. I know what you’re thinking – why didn’t you go to a less expensive school? I actually went to the school that gave me the best financial aid package. At the time that seemed like the best decision. And maybe it was about pride – school was important to me growing up and I always dreamed of going to what I perceived to be a good college. I also figured I’d make a lot of money after graduation.

    There doesn’t seem to be much education about student loans and the implications of them, which is a huge problem. At 17, I just didn’t understand the gravity of what I was getting myself into. Sallie Mae certainly wasn’t going to warn me about it, and my parents didn’t know what else to do. We all thought, “everyone has to take out student loans, right?” Education is power, and now I get it.

    I got a job paying $32k after graduation and lived in the Boston area where rent is high. After a few months, I got a second job as a photographer. Then, after a few more months, I got a third job at Barnes and Noble. I worked my tail off getting financial industry licenses and promotions at my primary job and after 7 years with the same company, I’m making a decent salary. My third job is now bookkeeping for my boyfriend’s small business. I drive a 2000 Toyota Camry that my grandmother gifted to me when she could no longer drive it.

    I floundered with my loans for about 4.5 years, just trying to stay afloat living paycheck to paycheck. Loan payments have been anywhere from $1000-$1500 a month depending on my payment plan. 3 years ago, I created a comprehensive spreadsheet to track each of my loans to see what I was really paying in principal and interest. Once I could see and understand where my money was going and the effect it had, it all made more sense and I felt that I had a better understanding of what I needed to do. I was so determined to put every single extra penny toward my loans because I could SEE where it was going. I started attacking one loan at a time, highest interest rate first. Every tax return, bonus, $20 birthday check from Grandma, pay check from a 2nd or 3rd job, etc. went toward my loans. I think it’s important to celebrate milestones too. Yes, I did go out and drink several glasses of wine with friends when I got under $100k, got under the amount I borrowed, etc. Celebrating accomplishments is motivation.

    Sometimes this has meant sacrificing my sanity and working for 60 days straight, but I’m now under $65k in loans, and have $40k in my 401(k) plan! I still have a lot of debt, but there’s a light at the end of the tunnel and I have a renewed confidence that I can do this if I stay focused. I was entirely burdened by the weight of my loans for years, and now that weight is getting to be less and less. The day I pay them off will be one of the most glorious, accomplished days of my life. As painful as this debt has been, I wouldn’t know my closest friends, wouldn’t have my current job, and wouldn’t have met the love of my life had I not gone to the school I did, so it can’t be the worst decision ever, right? There’s no sense in living with regret, so I will continue to learn, be grateful for what I have, and hustle, hustle, hustle until I’m out of debt and am saving money for my future. Hopefully I’ll be out of debt by my 10-year college reunion.

    My story is still incomplete, but it’s real.

    There are 2 types of debt. Voluntary and involuntary. Involuntary is when unfortunate circumstances occur….a medical bill, a car accident, a major appliance being replaced (Water heater, A/C, etc.) Voluntary is debt you intentionally take on – Car payments, mortgage, Credit cards, Etc. These are YOUR decisions that you make. As I’m reading thru these comments and seeing these people who owe $200K in student load debt, I have to wonder how in the world that happened and why they feel that anyone should have sympathy for taking on this extraordinary VOLUNTARY debt??!?!?

    Wow! What makes the post more inspiring is the fact that the couple initially had a negative net worth but worked on their finances to get to this stage.
    All the best.

    Beautiful. 🙂 There’s nothing like that feeling of freedom when you get out of debt. We tackled $14,000 of credit card debt this year and it felt amazing. Next on the list is our student loans, which will be done in 18 months, and mortgage, which will be done in five years. It’s all doable, folks!

    So many of you here sound envious and entitled. This article doesn’t have to be for you. You don’t have to relate to it. It’s target audience cannot really be everyone.

    A great tip for those struggling with loan payments – REFINANCE! If you have been paying on time and building up your credit score, simply refinancing down to a lower interest rate is going to be so much better. Car loans, mortgage, student debt consolidation – that will cut thousands off the interest you owe over time.

    Such a pleasant article. Feel-good read kind of piece. I don’t have any debt other than my sch. Loans that I am paying right now. Can’t wait to be completely debt free!

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