How to pay off 20k in 3 years making 18k a year

He looks the whole world in the face for he owes not any man.
~Henry Wadsworth Longfellow

My exciting news? I’ve paid off my car, making me 100% debt-free! (Quite a few of my friends will no doubt jump for joy once they hear the news, mostly because they no longer have to deal with my money-related bitching.)

So, yes, this is one of those posts…where I lay out how exactly I achieved this feat. There are a few people out there who paid off more debt faster, but really the only difference is I didn’t want to pay my debt off badly enough to live with my parents and work a job I hated, or go homeless for three months. I managed to pay off my debt while still more or less enjoying myself.

Here’s the story:

In December of 2007, I graduated from college and took over my car note. Between the car and the student loan, I owed about $20,000. Though most of 2008, I hadn’t yet figured out this whole “being in debt sucks” thing. I was starting to, but at the time I had other issues. The TL;DR version: I was living miserably in my parents house working one job I hated, another job I would come to hate, all the while dealing with the mental fallout of learning the hard way I’d been lied to and having a college degree does not guarantee you a job. When 2009 rolled around, I was living in my own place working 50 hours a week. I was reading about frugality and simple living and realizing that I really needed to get the monkey of debt off my back. I was finally learning how to budget for real.

After my measly little six-month lease came up, I decided to quit my jobs, move back to the town I went to college in, and see what happened. I was tired of being stuck in a small town with no friends. I moved out, happily found a ridiculously cheap apartment and a roommate, and after burning my savings account while unemployed for two months, I landed a job at a burrito joint and a second job elsewhere. I’d also made myself a cute little Excel spreadsheet to help me manage my finances.

Now, you can buy FB’s budgeting sheet for $50. I’d actually upload mine for free, but it seems I deleted it at some point since it was really quite unnecessary. I’ll describe it for you, though. I had a spot where I plugged in my paycheck amount, and then a little slot each that subtracted from that my rent, utilities, auto insurance, student loan payment, and car note. I then subtracted $100 a paycheck for food, gas, deodorant, and other Crap That I Needed (I later added an extra $40 for saving up for big things like the cats’ vaccinations, car registration renewal, etc). The rest, without fail, went into the savings account for debt paying. Period. If I couldn’t save up for it, I didn’t get it. It was only in the last six months or so, when I lost one job and started to see the light at the end of the tunnel, did I cheat a few times and take some money out of the savings account for Christmas gifts and other almost-necessities.

During the crazy days of two jobs and 14-hour workdays, I was putting $500 into the savings account after I’d paid the bills.

“Why into the savings account?” Because it gave me a nice reminder of where I stood. It felt good to see my savings account grow. It also meant that if something happened, I could use that money in a pinch and potentially prevent another bill from appearing. Once the savings account got to a point where I could pay off a debt (the student loan first, then the car note) I paid it off and started all over again.

I actually became so notorious for penny-pinching that my mother gave me a gift card to the grocery store rather than cash because I’d “just squirrel it away in [my] savings account.” I was also blessed with a lot of friends who were willing to pay for meals because they wanted my company. They will not go unrewarded.

I’ve found now that I don’t have a lot of sympathy for healthy people without children who complain about their debt and yet aren’t doing anything about it. Sure, different people have different means of getting rid of debt…some of us are a bit slower than others, but I refuse to listen to someone whine when they’re only making minimum payments.

I still occasionally amuse myself by remembering that my government “stimulus package,” the money that I was supposed to spend on stupid shit to “help the economy,” was instead used to help pull my ass (and the rest of me) out of debt. That’s probably why they didn’t give me very much.


2 Responses to “How to pay off 20k in 3 years making 18k a year”

  1. Dargon Says:

    Huzzah for being debt free. I still gots a ways myself, but budgets are a good thing. I made a rather similar budget myself, with projected incomes and expenses (most estimated conservatively), the rest went into savings and later towards debts.

    I find the notion of paying $50 for that spreadsheet a bit zany, especially considering just how easy it is to budget.

  2. SamanthaJoy Says:

    Congratulations! That’s a big milestone.

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