Not too long ago, I enjoyed a fairly smooth ride on the debt train. Granted, I had racked up thousands of dollars’ worth of credit card debt, but I was making good money and I was paying more than just the minimum payments each month. It seemed like I could continue living beyond my means indefinitely because I had a nice comfortable salary to fall back on.
Then, the unthinkable happened. The owner of the small business I had worked at for over five years had a stroke. A week later, her daughter came into to tell us that the company would be closing by the end of the month. It was not just her business either. Job opportunities that fit my niche were evaporating faster than ice on a hot summer day. I had no choice but to find a way to bring the debt train to a grinding halt.
Consolidating My Debts
I had a plan to start my own freelance business, but I knew I could not continue to make my credit card payments every month. I also knew that I had to get a loan while I still had verifiable income. I applied at several banks and I was turned down because of the high balances on my credit cards. I did not have any luck with
prosper.com either. A friend of mine told me about the wide variety of personal loans.ย I made a last ditch effort and, much to my delight, they were able to connect me with a lender who offered me a high enough loan to roll all my credit cards into one monthly loan payment. The loan payment was not cheap, but it was still a lot less than I was shelling out every month on individual payments.
The Next Step
Once I got my monthly debt payments down to one lump sum that I could plan on every month, I started creating a budget. The first thing I did was get rid of all those extra “little”
monthly expenses that I could stand to live without like the gym membership I never used. Netflix had to go too. I also cancelled my gaming account that charged monthly fees. Next, I got out of my cell phone contract and went with a prepaid phone that was half the monthly cost of my old phone. Did I miss any of these things? Probably a little, but I had a crazy idea that it would better to keep a roof over my head and be able to eat rather than watching streaming videos. Once the excess fat was gone from my budget, I made a list of all my expenses and my estimated income.
Making it all Workย
Things were really rough the first year. Even though I had been writing as a side gig even when I had my job, it took me a while to build up enough work to support my expenses. I did have to go on unemployment for a while until I could build my business up enough to self-sustaining. However, instead of squandering my limited benefits, I used every free dollar I had to pay off my loan. It meant that I had to
cook at home a lot more and eschew frivolous purchases that I once would have charged without even thinking twice about, but I committed myself to a plan to get out of debt and stuck to it. Was it easy? No, not even a little bit. However, it did force me to realize that all those things that I thought I needed, were not that necessary after all.
Conclusions and Lessons Learned
Getting out of debt was probably one of the toughest struggles of my life. For years, I lived “high on the hog” simply because I could. It bought me many material things, but I do not think that they made me any happier. I do not have the latest iPhone and I do not get to take vacations to exotic locations, but sending in that last loan payment made me happier than any of those other things did. Once I was debt-free, I was able to enjoy the profits from my business without worrying about paying so many bills each month. Now, most of the money I earn is mine, and except for regular living expenses, I can spend my “funny money” without feeling guilty because I am no longer racking up debt for things I do not really need.
