Reader Story: I Paid Off $70,000 in Debt and Quit My Job!

Love it, we worked a similar plan (paid off $55,500 in a year) except we didn’t have a new car payment. I love that you had the courage to get rid of the new car payment, I think a lot of people get stuck at that step.

Thank you so much. I didn’t realize it took courage at the time!

I think it was one of those, enough is enough moments.

I checked out your blog, impressive net worth. You are so close!

It’s a great story and thanks for sharing it. We’re almost done with all debt except the house. And then we plan to tackle it, too! I’ll check out your site because I need all the inspiration I can get!

Thanks so much. I remember reading every success story I could when I was getting out of debt.

It was my main source of motivation, so I was so happy that JD put it up. It’s so cool to be an inspiration to others!

I really like these stories – but what the heck kind of income is this family pulling in that they can save $23k, pay off aprox $25k, and pay off another $23k in three months time? That is over $70k in less than a year AFTER living expenses! I would have liked a little more detail – were they getting help? was she making an obscene amount of money at her job?

I mean, paying of that last $23k in three months? That made me wonder why they even had debt in the first place.

Great, you got out of debt. But you hurt your earning power for the rest of your adult life, and made it next to impossible to recover your chances of ever making it back to the same track you were on before.

Granted, working 60 hours a week with a baby is ridiculous, but I can’t get past the idea that you quit a high paying job and left the career you presumably spent the better part of a decade training for to chase some pipe dream about domestic bliss. I hope you have a financial plan in place if you become one of the 50% of marriages in the US that fall apart.

FYI – I did browse her blog some and found her original post on the subject that went into more detail about the stuff they sold and how they found extra money. Or how in those last few months they had things like tax returns to put towards the last $23k.

http://www.eventualmillionaire.com/blog/2010/04/how-i-paid-off-over-70000-in-debt-and-quit-my-job/

I think that it was still a lot of debt to be able to actually get through in that short of an amount of time – but it is sometimes good to see that even if you have lots of money to work with, anyone can still fall into the debt trap.

Coincedentally (sp?), I did the same thing last year with a 2008 Honda Civic. I lost about $2500, but that was negative equity from my last vehicle, and I was prepared to lose that much. I traded the 08 in for an 01 and cut my payments (including my insurance) in half! It was definitley worth it! I now owe about $1800 on the 01 and I am so looking forward to having it paid off!

Great story – it shows how having a goal and doing some planning can really help.

Very interesting how little your car depreciated. That’s example of how just because everyone says something (driving car off lot = 40% loss) doesn’t mean it’s true.

Mike

Amazing story! So inspirational. I know how hard it was to trade in your car- but I’m sure being debt free is so much more fun and a better way to live life. Your story has definitely inspired me to begin to sell the ‘excess’ in my life and to keep the car I already have instead of trading it in for a car I’ve been eyeing- a new Kia Soul.

This is a great story. Congratulations for having the guts to get rid of the car! Most people wouldn’t even consider it.
I think keeping an emergency fund was also a very smart thing to do, as it made you feel safer. Number-wise, you may have lost some money in the interest, but you had peace of mind, and that’s very important.

I’m glad you’re doing okay and can spend time with your son AND found a career you really enjoy! And kudos to your husband for supporting you financially and emotionally during your pregnancy, it sounds like he gave it his all

I’m glad for the both of you – no, the three of you – and this story makes me really happy. I hope it will encourage people by showing them how you can get out of debt even if the clock is ticking for one reason or another – for instance a pregnancy. That there is hope, and they shouldn’t put their hands up and give up before trying

Mary: some women will sacrifice so so much to be with their children. They don’t ask, nor want anything in return. Unfair or insane? Maybe. But they off is huge. The author is a smart woman, surely she is taking care of her bottom line. To do so is to also take care of her children. Because we all know what happen to women when they are divorced with children

@Lynn (#22) – Actually, the poster’s math is off. She said on her blog that total income while she was working was $130k and her share was $100k. That’s actually a little over 3/4 of the prior household income. If she has problems with something as simple as division…

@Rachel211 We made about $130k per year. I made $100k. My husband has a sporadic income, and those months were the best.

It was three months after going back to work, I stayed home with my son for three months though, so it was about 6 months time. (My son was 5 and a half months when I quit)

@Trina Congrats! It’s all about trading. I remember thinking living in a much smaller house would be so worth it to have the life I wanted.
Turns out I didn’t have to live in a smaller house either! Things seemed to work out so well.

@Mike I was so worried about losing money too. We almost didn’t do it because we assumed we would have lost $5-$6k.

@Kelsey Sooo worth it You think it will be good, but it’s been even better than I imagined.

@Lynn You’re right. I could be so much better off monetarily if I stayed put. My husband loved his job, and had potential to make a lot more. Plus I wanted to be home more.

In the comments on my post you will see that we do put away for retirement. It’s usually taken out after the busy season when we can verify we are all set for the winter.

I am a planner, so I try to always be prepared. We have a six month emergency fund, plus a huge HSA for medical emergencies.

We do the best we can

I think this is a great story, as it demonstrates how discipline can make the seemingly impossible, possible. I am curious about the poster’s decision to pay off the last $23k in student debt.

When I crunched the numbers on our total student loan debt, it actually made more sense to live with the largest chunk of debt. The reasons were that the interest rate on that loan is under 1% and we are earning 5+%, untaxed, on the money we have invested. (These are our cash savings conservatively invested in tax-free bond funds – not retirement monies.) As nice as it would be to be debt-free, having nearly 1.5 years of emergency fund savings earning a rate of return above inflation makes me sleep better at night than being debt-free and wiping out the family savings in the process.

I’m deeply skeptical of the value of student debt, but once you have it there are times when paying it all off doesn’t make financial sense. I wonder what made the poster decide to pay off the last $23k, other than the motivation to be entirely debt-free.

Hey that’s pretty cool. Good for you Jaime. Its pretty impressive what people can accomplish if they want something badly enough. So yay! =)

@DreamChaser57 Thank you!

@Kevin It would have made sense financially. My husband is a musician/performer with his brother (audiobody.com). The main reason why he didn’t stop was because it would severely cripple his brothers income too.

Plus he loved his job, and I hated mine. I wanted to be home with the kids.

I don’t really think that most of the ‘negative’ posts on here are trying to be mean. The more I thought about this story over the day, I think that most people just couldn’t relate to such a large amount of money that was paid off in such a short time.

The grand total was at $70k and then getting rid of the car was a great move bringing it down to $52k immediately. But then there is a lot of talk about being pregnant – so at first I was thinking in a 9 or 12 month time frame. That would have been paying like $4500+ per month towards debt – which most of us can’t possibly imagine having that much surplus income in a month, even with side jobs!

But then I looked at the time line again – they started a few months before getting pregnant (2 months), then the pregnancy (9 months), then her time off which she was still being paid 60% during (3 months), then another 3 months of working. So we are actually looking at a time line of 17 months. And let’s say there was maybe a $3000 tax return in there somewhere and that brings down the extra payments per month to a much more understandable $2800 area. Sure that is still a lot – but someone could do it if they had a nice salary.

I think that my first impression of the story was “I paid off $70k in 1 year” and that wasn’t really the case. Do I make enough money to pay $2800 extra a month to our debts? No, but I would like to think that if I DID that would take the same route and use it to better my situation.