Reader Story: I Paid Off $70,000 in Debt and Quit My Job!
Published on - June 13th, 2010 (Modified on - June 18th, 2010) (by J.D. Roth) This guest post from Jaime Tardy is part of the “reader stories” feature here at Get Rich Slowly. Some reader stories contain general “how I did X” advice, and others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity, and with all sorts of incomes.
In 2005, I was working more than 60 hours a week in a position that required me to travel around the U.S. I made great money, but I hated my job.
My husband and I wanted to start a family, and I knew that I couldn’t work so many hours with a baby. My goal was to work part time. The problem was we had over $70,000 in debt, and I made over two-thirds of the income.
I felt like I was at the bottom of Mount Everest looking up, but I knew I could only take it one step at a time. I was focusing on the top of the mountain when I really should have been looking at the start of the trail.
First steps
I started to read everything about personal finance and getting rid of debt. I found Get Rich Slowly and The Simple Dollar. I read Suze Orman and Dave Ramsey.
We decided to start Dave Ramsey’s Total Money Makeover in January 2006. At the time, our debt looked like this:
- Honda Civic $19,300
- Student Loan 1 $3,400
- Student Loan 2 $22,780
- Home Equity Loan $24,560
We’d just bought a brand new Honda Civic two months before. It was almost one third of our debt, and I loved it. I had images of taking a new little baby home in it. It was going to be the family car. But we finally had to ask, “What’s more important: Driving in our awesome family car to work everyday, or having a clunker in the driveway while I stay home?”
I had heard that the second you drive a car off the lot it loses value. I was really scared to find out how much our Civic had depreciated. It turned out we only lost $1,000 on a trade in!
Having the guts to make such a hard decision really jump-started our journey. It pushed us to become stronger and work harder.
Our plan
In March 2006, I learned that I was pregnant. The clock was now ticking!
Our next steps were to get on a budget, and to sell everything we could. We realized two things in the process: We didn’t have a clue how much we spent, and we had no idea how much Stuff we had.
After a few months of selling things and reworking the budget, we hit our stride. We started working side jobs, and I started traveling more to earn the on-site bonuses my work provided.
My husband has a very sporadic income as a performing artist. He started doing website design and graphic design to make extra money. He took any job that he could and was working literally day and night on extra projects.
He worked like a dog for those months and dealt with a very pregnant wife, so I commend him at what a great job he did!
A safety net
A few months before our son was born, we realized that if we put all of our money towards debt, and we had issues with the pregnancy or the birth, we wouldn’t have any money to pay for the care. Instead of tackling the final debt, we decided to build up our emergency fund.
When Finley was born, we had one $23,000 debt and $23,000 in the bank. The birth didn’t have any complications, but I had come to rely on having money in the bank. I couldn’t fathom paying off that last debt, because I’d be quitting my job without any savings in the bank.
After careful thought, we decided to keep the emergency fund. I ended up going back to work after maternity leave, and we continued to push really hard. Less than three months after going back to work, we had enough money to pay off the final debt. We were finally debt free!
Jaime’s GRS contest video in which she tells her story in two minutes
Quitting my job
In April of 2007, I quit my job. It was one of the best days of my life knowing that we accomplished our goal, and I could be home with my son. Now I’ve even found a career that I’m extremely passionate about. I work part time as a personal and business coach, and I wake up each morning so excited to start my day.
At my blog, Eventual Millionaire, my motto is: Life is about more than money. First you have to find the life you want, and then you can make your million. That’s why I call myself an “eventual” millionaire. But I feel rich already.
Reminder: This is a story from one of your fellow readers. Please be nice. After nearly a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are.
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I think Mary and Karen in Minnesota make good points — women have to support themselves and think about their own financial well-being.
Having said that, I decided that a six-figure income was not worth being miserable and pouring all of my life into a job I hated. JD talks a lot about “Stuff,” and I decided that none of my “Stuff” was worth it. I don’t have any debt, so I was working just for the “Stuff.”
I think there are lots of creative ways to make and spend money. If I can make $50k a year by working part-time, enjoy my life and my family, and live much more simply, yea for me! And yea for Jaime!
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Ann, your initial comment doesn’t seem out of line (except maybe the division comment). I’m only trying to remind people to keep things civil around here.
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@Karen
My husband and I trade off career time. Both of us have spent several a number of years at home. (He was SO much better with teens than me). Neither of us ever made boatloads of money, but we always found a job when we wanted one. Both of us networked the way Jamie is now- by consulting/ substituting.
We both retired- last week.(Well sort of- we both have side gigs that don’t make much money but keep us in touch with our professions). Our children are emotionally strong and in the world.
My daughter quit her job to stay home with her son. We strongly supported her position. She now does consulting from home. Her husband is happy in the 10-7 work world and finds great satisfaction in his job. He supports her being at home with their very active two year old (and the plans to have several others is still in the works).
It all depends on priority – IMHO. I don’t think a person’s bad luck (or whatever it is called) should hamper another from doing what they really want- especially if it to raise the next generation of leaders.
Divorce always looms in the background. We have friends who are divorcing after 30 years. Our key is to make sure everyone still has a toe in the job market and a good savings to make things equal if anything should happen. We both have relied on that at one time or another. Actually, I credit that attitude (and the agreement that we would be in charge of cooking for 15 years at a time- I got the first 15) for keeping us together.
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@Kareninminnesota- Excellent advice! I am also divorced with two children. I, too, receive no alimony and very, very little child support. While I did stay home when my kids were babies, thank GOODNESS I went back to work and school so that I can now support them. I didn’t think I would ever get divorced, but it happens. Women cannot stick their heads in the sand.
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I agree with Nancy (47). I’m an attorney and just had my baby daughter in January. Before she was born, I thought, “oh of course I’ll go back to work.” After she was born I realized how completely wrong I was and how there is no way I can leave her with a daycare. Maybe it was the hormones or something that made me feel that way, but I still cannot see leaving her. The money I made, regardless of amount, does not seem worth it to me to miss out on being with my baby. Fortunately, my husband has a good job and is very supportive. He is military, so we both have health coverage. We have no debt except my student loan, which is high ($40K, down from $80K, yay me!) but with a low interest rate.
IMO, to the people who commented they can’t understand why Jamie’s husband wouldn’t stop working and stay home with the baby instead of her because she made more money- I know maybe this sounds like a sexist comment, but as the baby’s mom, there is simply no way I could leave her and let my husband take care of her. I know many couples do that, but I think as the mother, the biological, hormonal drive to care for the child is so strong there is no chance I would be able to take a back seat to her care. Before I had my daughter I did not understand this, but now I do. So, kudos to Jamie and her family, it’s great they paid off their debt, and I am sure everything will work out great. Just like in “Your Money or Your Life,” we all have to make choices about what our priorities in life are.
To Mary and the other commenter who feel that women should plan accordingly in case of divorce, if the husband jumps ship yes that’s a difficult situation for the wife to be in. Especially an uneducated wife with few career options. But I am not going to sacrifice being with my baby now, while she’s a baby, just “in case” I get a divorce later. After my child gets old enough, I’ll get another job. If I’m not at the same place on the career ladder at that point, so be it. My relationship with my daughter is that precious to me.
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I wonder if part of what’s got people cranky is just that Jaime made a lot of money. I try to be fair, but I definitely found myself thinking, “Well, if I made that much I’d have my debt paid off in a year too!” I make a third of that and have way more student loan debt. Of course, I love what I do and have a side job that I also love that helps out with the finances.
Maybe it would be good to start choosing headlines that are more to the point of the article “How I paid off my debt and found a way to live the life I want on less $” instead of the more sensational headlines “How I paid off $70k in a year!” which are sure to disappoint (it wasn’t really a year, it wasn’t really $70k, it was easier for her because she makes so much, and so on).
Anyway, it’s always nice to read how someone achieved their goals, whatever they were, and pick up a few ideas along the way. I also like the idea of creating deadlines, it really helps with motivation. I did this with paying off $10k in credit card debt in a year on a meager salary living in NYC. I decided it needed to be done before I started grad school and I made it happen.
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@Karen in minnesota Thanks for the comment. I really do enjoy hearing your thoughts.
Just to give you some background to my thoughts, I always knew I wanted to work for myself.
I always try to prepare the best for the future and leaving the work force, even making it on my own was part of my decision.
To manage the risk of these, I left my previous employer on great terms. Two different departments told me I could have a job again when ever I wanted. (of course in a down economy that isn’t guaranteed!)
So I also went to Coach University (paid for with cash) to become a business coach. Since I had time I was able to mentor with an amazing coach who sold a million dollar business.
I’m always learning, working to be better at what I do, and to make more money. My goal as an eventual millionaire is to make six figures again on my terms.
I would 100% agree that moms need to look beyond 10 years. (Heck everyone needs to look beyond 10 years!)
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This is quite an inspiring story. It just goes to show that persistence and determination can save the day and pay off that $70,000 debt. Readers who are in debt should study how this family did it for it can happen to them too. Being debt-free is a goal worth working hard for.
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Great story! Thanks for sharing this. It’s wonderful to hear how you accomplished paying off the debt in such a short time frame (a little over a year!) I’m looking forward to being debt free in 2 years!
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Woot for Jaime! I just started reading your blog a few weeks ago and had no idea this is what you had accomplished! That’s amazing!
Keep up the great Reader Stories J.D.! I love them!
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@Sarah # 56, the title doesn’t say “I paid $70K off in a year.”
But yeah, I think some of the negative comments are bound to be motivated by envy. A lot of readers here don’t have high incomes, you can tell from the comments. And that means those readers have different challenges than those of us with household incomes over $100K. There are plenty of other articles they can read if they don’t find this one applicable to their situation.
Everybody makes their own decisions based on their own values, and while I doubt the level of commentary here would EVER get as low as on MSN Money (the commenters there are, generally, only marginally more decent and literate than those on Yahoo), there is definitely a tendency for people to get bitchy when they would have done something differently.
Point out errors, if they are clear from the context of an article or if you can substantiate your information. But this business of saying people are wrong has to stop. What’s right or wrong for you isn’t necessarily right or wrong for everybody.
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I think it’s a mistake to focus on someone’s income and decide that it was easy for them and none of it applies to you because they make so much more.
Take what you can from someone’s story and figure out how to integrate it into your own life. Maybe you can’t pay off your debt as quickly, but maybe you can trade in your car for something cheaper. Etc.
Great job, Jamie!
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@chacha,
We all have the same challenge: make more, spend less. I am one of the skeptics, and we have a higher income and have been debt free for nearly 10 years. If we spend less, we can save faster than some thanks to the making more. But there is lifestyle inflation, especially in cities where the 100k jobs usually are. I know many friends making half as much, out in the country, who are also on the road to wealth.
For those criticizing Mary and others, she is pointing out facts, facts that were posted here awhile ago by the Motley Fool contributor regarding women and poverty. Nobody wants to be a statistic, but sometimes it happens. I hope that my husband and I stay together forever and live healthy, long lives. However, we’ve bought disability and life insurance, just in case. Knowing the likelihood of elder women to be in poverty and planning accordingly is the same thing, to me. What happens when someone cannot care for herself financially in her later years. She could end up a burden to her own daughter at a time when the daughter is trying to build her own nest egg. I have seen this happen.
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Awesome story! As ya’ll know, I paid of my mortgage (my very first mortgage) before I turned 34 and it took me 8 years. I thought once we became debt free all our financial worries would be over. I thought my wife could quuit and stay home full time with our kids. Not the case. She now only works 2 days a week, which is good, but it is SO HARD wanting to let go of that extra income. We travel A LOT (mostly for family visits, we dont live near either of our families) and we get great insurance through her employer. Now I have the opportunity to move 4 hours away to the town I grew up in and where my family lives. It is a big city. I have a house my parents own that is 2 bedroom and one bath. fully furnished, in the mountains with lots of land. I could live there for $100 a month and all free utilities… and stay there with my family (albeit, cramped) until i find a good job. Funny, my mom lived in the same house growing up with 7 brothers and sisters and back then no one complained. I have wanted to move there and the opportunity is staring me in the face, but the idea of quitting both our jobs and jumping in to do this HORRIFIES ME… any advice?
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^Mary may have been pointing out a fact (or what she believes to be a fact, that 50% divorce figure is hotly debated) but she was doing it as a direct criticism of Jaime’s choice.
None of us is entitled to criticize Jaime’s choice, because none of us was a party to it. That’s all I’m saying.
If people want to submit commentary re: women and divorce and the PF consequences of same, they ought to write it as a reader story or guest post, not as criticism of someone else’s story or guest post.
To use comments as part of a forum for debate is fine, but essentially saying “you made a mistake and you are probably going to pay for it later” is not constructive.
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Except… it wasn’t the OPs choice to be a SAHP in the end anyway… she just took a small break and changed careers. People do that even when kids aren’t involved… YMMYL even outlines how to get to the point where you can do that. The argument that she shouldn’t have left the labor force doesn’t really apply because she didn’t.
The article makes it sound much more like the choice was the standard argument for staying at home with children. The blog has more information. She has 2 kids, a 20 hr/week nanny, and her own business. She and her DH brought in 7K last month. She’s not destroying her future earning potential.
But you have to read through the blog to get that. If anything I do agree with the criticisms that the post is very light on details. There’s information ommitted that would be useful to someone thinking of making this kind of change themselves.
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@Chacha,
The fact in question is the financial gap between women and men, especially later in life, in part due to women opting out of the workforce and divorce. I don’t think the facts are fair, I think as a nation we should encourage both parents spending more time with family, but it is what it is. Mary’s tone got in the way of what she was saying, IMO.
I think we should be able to criticize a post based on its financial aspects. I think the 1st part about paying off debt is great. I think, after reading Jaime’s responses, there is more to the 2nd part. But to me, the second part originally read: we have 23K in the bank, no debt, & a baby, so I, winner of 2/3 of the income, quit my job. What?! no yay from me on that, that sounds precarious. I wouldn’t care which gender quit or for what reason, that, to me, is not a sound financial decision. Now, there appears to be more planning, etc, to the story that did not get included. Others brought up gender because statistically it is women who do this and who then pay for it later. I think most were trying to warn, not criticize.
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I always have this big question. With such earning potential, how did anyone end up with such huge debt of $70k. But again better late than never, so Congrats and All the best
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@ Chacha1
I totally agree with both of your points (about making choices, and salary envy).
Some choices ARE wrong (No one wants to read “I picked pockets until I had enough $ to pay off my debt!”). But for the most part choices are the result of a complex and dynamic situation. I understand the hurt and anger that goes along with divorce, but it amazes me how adamant some women are. There is a whole range of choices that can be made from being a SAHM for 40 years to a part time schedule for a handful of years. It’s a trade-off, the job of bringing in money for the job of spending time with your kids. But I can’t imagine making choices for OUR future based on what will happen if he walks out on me. Plenty of people do get divorced, but a lot stay intact and treating my marriage like that seems to invite fulfillment of the breakup prophesy.
As far as the person who makes more staying in a job: How is that anyone’s business? I might make a judgment of that decision if they were putting themselves in financial jeopardy and risking having to go on welfare or going bankrupt. I judge an aunt of mine who refused to get a job because she was the SAHM which meant living off my grandparents (for the record I also have an opinion on them letting her). But Jaime and her husband have their debt paid off and they sound prudent and smart, so who cares? My husband would be miserable at home, and I would rather be the one staying at home. Even if I make more than him, what’s wrong with that if we accept the less expensive lifestyle and live it wisely?
And regarding salary envy, I’ve noticed that a few times around here and I think it’s a product of our times and culture. Sometimes it’s sour grapes, sometimes it’s a closed-minded attitude that thinks there is nothing to learn from someone who isn’t in your EXACT situation. And sometimes it’s just reverse snobbery. but people who make more typically do for a reason. Some people fall into those jobs, but in my experience a person making $70k+ has: talent/education, drive, and/or a high tolerance for discomfort.
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The choice to stay at home is one that is granted to a privileged few and it almost always comes at a high cost. That’s all I wanted to point out. I read the rest of the replies with interest, but I’m not sure there is much reason to debate.
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Jaime, your story is great! The fact you completely changed your lifestyle, re-evaluated your priorities, and now work fewer hours at a job you love is highly commendable. I think you are truly living the dream.
Most people would not have had the guts to sell a brand new car or their Stuff.
Life is not all about money and I think so many people focus on only the bottom line. They think when they have a certain number in their bank account, that’s when they will be happy or they will quit their job and that’s simply not true.
You do not need a ton of money to live a rich life.
Many people slug away at a job they hate because it’s good pay and end up unhealthy and miserable. (Office Space anyone?!)
Congrats on being debt free and living the life you love!
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@Car Thank you so much.
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Thanks for the post. Interesting. It has me thinking again about the possibility of leaving my job to SAH or work part time when my kids are in middle school/high school. If I can pay down the mortgage and put aside a good chunk towards college, maybe…
Good luck.
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I feel Jamie’s life story was very inspirational!! Thanks Jamie!!
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I have to admit, I am not impressed by this story at all, for two reasons:
1. Less than 7% of Americans make over $100K per year and you two make $140K in one year. Seriously…the vast majority of Americans would be out of debt too in one year if they had ANY possible way of making that kind of money.
2. If you two are making such a great income, how did you ever get into debt to start with? To me, that is the hallmark of financial mismanagement.
Very unimpressed.
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