Free at last! Saying good-bye to 20 years of debt

Twenty years ago, I was a freshman in college. I was a poor kid from a poor family, but my roommates came from wealth. In order to fit in, I went out and picked up a department store credit card. I bought some new clothes, an electric shaver, and a bottle of cologne. From that day on, I’ve been in debt.

Getting Hooked

My debt grew slowly at first. The department store credit card had a $500 limit. I knew that I shouldn’t come close to the limit, and that I should pay the card off, but within a year I’d maxed it out and was only making minimum payments.

By the time I graduated from college in 1991, I had acquired two additional credit cards. I was glad I had them, too — when my job plans fell through, the credit cards became my emergency fund. I lived off them for months. I also bought a brand-new Geo Storm. Within six months of graduating from college, I was unemployed and carrying $20,000 in debt.

Deeper in Debt

I did not enjoy sales To escape impending disaster, I went to work for my father, something I had vowed never to do. During the 1990s, I was the salesman for my family’s box factory. My debt declined a little when I began to bring in a steady paycheck. But I wasn’t out of the woods yet. I began to spend more and more. By the middle of the decade, my debt had crept up to $25,000.

When my father died in 1995, I received a small life insurance settlement. To my credit, I applied this money to debt, and for a few years my balances declined. But then I returned to my profligate ways, buying a new car, buying computers, buying any toy I wanted. By 2004, I had accumulated over $35,000 in debt.

Turning Things Around

During the summer of 2004, Kris and I bought a new house. It was the home of our dreams: a century-old farmhouse on half an acre close to Portland. It seemed expensive, but the bank said we could afford it, so we jumped at the chance. Things became problematic, however, when we were forced to spend several thousand dollars making unexpected repairs. (Old houses are like that.)

I began to feel overwhelmed. I was drowning in debt, and the expenses were flooding in. I had been living paycheck-to-paycheck for more than a decade, merely staying afloat as the water slowly rose around me. Now I felt myself sinking below the surface — I’d reached the end of my credit and the end of my cash. Fortunately, a couple of friends threw me life preservers.

First, my friend Michael recommended that I read Your Money or Your Life by Joe Dominguez and Vicki Robin. Then another friend suggested Dave Ramsey’s The Total Money Makeover. When I read these books, something clicked. I saw the light. I went to the public library and borrowed more personal finance books. I devoured them. They motivated me to action.

The Method to My Madness

Using the ideas I learned from personal finance books, I set out to eliminate my debt. I stumbled at first — I made plenty of mistakes. But eventually I developed a system that worked for me:

  • I set goals. I can’t stick to a budget to save my life, so I developed what I call a spending plan. Like a budget “lite”, this tool simply gives me a rough idea of my income and expenses so that I can determine where best to put my money. It’s like a roadmap to my money, and it has helped me reach my goals.
  • I read everything I could find. I continued to read personal finance books of all sorts. I learned that even the worst books generally contained a piece of advice I could use. I developed the ability to extract the stuff I could use from a book and to discard the rest. I subscribed to personal finance magazines. I read personal finance websites.
  • I tracked every penny I spent. I never realized how easy it was for me to overspend simply because I didn’t keep track of my money. I’d kept rough records in Quicken before, but now I became precise. By paying close attention, I was able to spot weaknesses and correct them.
  • I attacked my debt. Following Dave Ramsey’s advice, I started a debt snowball. I lined up my debts from lowest balance to highest, and repaid them in that order. Though this didn’t yield mathematically optimal results, it gave me quick victories. I knocked off several debts within just a few months — the psychological boost was amazing. It kept me in the game.
  • I cut my expenses. I began to look for ways to live frugally. I didn’t cut everything, and I didn’t cut a lot of things at once. But gradually I winnowed out the little things I didn’t need. I looked for ways to save money, to get things for less. These small savings made a real difference to my bottom line.
  • I found ways to make more money. I began to sell stuff on eBay and at garage sales and on Craigslist. I liked the idea of making money online, so I started a website about comic books. As an afterthought, I started a site about personal finance. Eighteen months later, the comic book site is defunct and the personal finance site has become my vocation.
  • I tried not to get discouraged. And when I did get discouraged, I didn’t let myself sink into despair. In the past, any mistake would have led to a sort of cascade failure. If I blew money on comics, it would make me feel guilty, would have caused me to buy more comics. I learned to simply accept my mistakes and move on, re-focusing on my financial goals.

It took a lot of time and effort, but these actions have finally paid off. Today I wrote a check for the last of my consumer debt. I am now debt-free, except for my mortgage. I’ve been walking around in a happy little haze all day long. To celebrate, I bought carne asada at my favorite little hole-in-the-wall Mexican joint.

Getting Rich Slowly

Now that I’ve eliminated my debt, it’s time to shift my focus from the past to the future. Thanks to great advice from GRS readers, I’ve been preparing to live debt-free. If you read this site regularly, you already know my plans for building wealth:

  • I will quit my day job to write. Beginning in January, I’ll begin the transition from box salesman to full-time writer. This is scary, but it’s also a chance for me to pursue my dreams.
  • I will create a budget. I can hardly believe I’m writing this. For years, budgets have seemed like a waste of time to me. But my income will soon move from a regular, known quantity to something less predictable. I need a budget to keep me focused.
  • I will build my emergency fund. I’ve accumulated $1,000 right now, and that’s helped me weather some small storms. But the move to full-time writer is going to require a larger safety cushion. Over the next year, I want to save at least $10,000. Ultimately, I’d like to have a twelve-month cushion in a high-yield savings account. Excessive? Perhaps. But it’ll help me sleep easier at night.
  • I will continue to fund my retirement account. The Roth IRA contribution limit increases to $5,000 in 2008. I aim to make the maximum contribution.
  • Prepaying a mortgage is not the best choice for everyone Kris and I will strive to repay our mortgage early. Though we’re aware of the drawbacks to prepaying our mortgage, it’s something we both want to do. We sat down tonight and drafted a plan, which I’ll share in the near future. Basically, we’ll make an extra payment to the principal every month, effectively halving the life of the loan.
  • I will automate my financial life. Over the past few months, I’ve erected a paperless personal finance system. I’ve signed up for automatic bill pay and paperless billing at the cable company, the phone company, and the gas company. I’ve scheduled automatic transfers to my savings account. I’ve scheduled automatic investments to my Roth IRA at Sharebuilder. I’m not able to completely automate things, but I’ve done what I can.
  • I will use a cash rewards credit card for regular expenses. I know that many GRS readers oppose credit card use of any sort, and I don’t blame you. I know the dangers first-hand. But I believe I’ve mastered the damn things, and I’m finally ready to make them work for me. My card gives me 1% cash back, so I use it to pay for all my utilities and for other planned expenses. (I don’t use it for unplanned expenses.)

Over the past few months, I’ve been building this system one piece at a time, testing each component to find weak spots. It’s sure to undergo changes in the future, but for now these are the actions that work for me. They fit with my way of life, and they will allow me to pursue my dreams.

Tying Up Loose Ends

I’ve eliminated my non-mortgage debt. I’ve paid all my bills through the end of the year. I’ve boosted my personal emergency fund back to $1,000. I have a plan to fully fund my 2007 Roth IRA by early January. There’s $250 in my MINI Cooper fund, and $250 in my vacation fund. All I have left to do is my Christmas shopping. And to write some more articles for Get Rich Slowly!

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There are 212 comments to "Free at last! Saying good-bye to 20 years of debt".

  1. J.D. says 03 December 2007 at 22:16

    I wince to think how much I’ve paid in interest and finance charges over the past twenty years. What if I had invested that money? I’d be rich!

  2. 10kPortfolio says 03 December 2007 at 22:48

    At least it is paid off. There are many people in situations where they could have been paying off debt but have been spending in other places. At least you will have more money to invest now.

  3. Kevin @ Change Your Tree says 03 December 2007 at 22:53

    I applaud your amazing achievement!! I too used Dave’s plan to become debt free. It’s such an amazing feeling.

    I feel you are playing with snakes by still using credit; but of course, that’s your choice.

    Congratulations.

  4. m says 03 December 2007 at 23:03

    Lots of congrats in order for you lately, it seems. Great job. Sounds like you really put in a phenomenal effort and are seeing phenomenal results! Yay!

  5. [ this is jerry ] says 03 December 2007 at 23:11

    hooray!

  6. Ryan Lynch says 03 December 2007 at 23:15

    Congratulations! Please continue to share your wisdom with us. I know I have sincerely learned a lot.

  7. In The Hole says 03 December 2007 at 23:16

    Congratulations!! Thank you so much for sharing that post. It really inspired me.

  8. Chris says 03 December 2007 at 23:44

    I have been reading your site for quite some time and I am happy to see you reach a milestone. At the same time, I look at how much effort you seem to be expending to manage your finances. The time, thought, and discipline required seem to be a bit soul sucking to me. I wonder if all that effort is truly needed in order to “Get Rich Slowly”. Perhaps it is what is needed when you are working to get out of a hole.

    Are your next steps really focused on maximizing your financial wealth? They seem to be about putting yourself in control. What if you are in control? How do you build your net worth faster?

    I look forward to seeing if and how this blog changes over the next few months as your goals change. Sometimes I feel like I am along for a ride while you do a little bit of personal therapy to keep yourself disciplined.

  9. jethro says 04 December 2007 at 00:07

    Congratulations JD! We are all proud of you and hope that we can do the same thing. I only have student loans left, and my wife and I want to finish paying off those before we buy a house. It will be a few years, but we are looking forward to it. Good luck looking toward the future!

  10. jokermage says 04 December 2007 at 00:24

    Congratulations! I’m debt-free, but I’m also job-free so I can’t really celebrate for myself.

  11. Sandy says 04 December 2007 at 00:27

    Congratulations for turning it all around financially! What a wonderful feeling to have no consumer debt! Even at Christmas too. If you’re insistent about rewards credit cards, you can go to http://www.verybestcreditcards.org to make sure you have the best ones, which you probably do. I personally don’t have the desire, but like you said, so long as you use it for expected purchases, and pay attention to the expiration terms, you should be all right. If your rewards expire, you’ll want to know that before it happens. Nothing is more frustrating than racking up $$$ in rewards and never being able to redeem them because you let them expire. But it sounds like you are totally responsible now financially.

    Congratulations again! I’m out of debt too, and like you, cringe at the interest I paid in the past & money I wasted when I didn’t set up a budget. This quote helps me:

    “Although no one can go back and make a brand new start, anyone can start from now and make a brand new ending.” Keep up the good work!

  12. Julia says 04 December 2007 at 01:19

    Congratulations!! I am so excited about your semi-retirement, and had never considered doing it for myself until I read GRS. Same with pre-paying the mortgage. Now I’m living far more frugally than before because these goals are more important than eating out for dinner nearly every night. Please continue the writing… reading this post was a treat to myself for finally finishing a school project.

  13. Enough Wealth says 04 December 2007 at 01:38

    Goes to show what you can do with a college degree and the desire to make a million before you turn 30 😉

  14. Cope says 04 December 2007 at 02:09

    Thanks! Very helpful and motivating. It’s good to know that I’m A) not alone and B) that it can be done. My New Year’s Resolution is to attack my debt, but I’m not waiting until the New Year to get started.

  15. KJS says 04 December 2007 at 02:17

    Congratulations J.D.! I posted a “Congratulations” story with a link to this story on my blog as an that has a lot of good advice and resources.

    Keep on chipping away at the mortgage!

  16. Red Zinnia says 04 December 2007 at 02:59

    Congratulations! I wrote our “last check” a year and a half ago, and it was a TERRIFIC feeling. I’m really happy for you.

    Lisa

  17. SharkGirl says 04 December 2007 at 03:11

    Wow.. you just gave me some ideas about how to get out of my rut. Thanks. I’ve been working on goals and learning how to invest and I have to get rid of a $90,000 debt that was the result of unfair competition. I have a very long ways to go, but you give plenty of ideas to be less discouraged about the task at hand.

    Congratulations too, for paying off your debts.

  18. M! says 04 December 2007 at 03:13

    Just have to say Congratulations! Finding your site has helped me tremendously over the past year or so. When I first found your site I wasn’t drowning in debt, but I was living paycheck to paycheck, with no plan or goals. Now, about a year on, I’ve got an emergency fund, I’m paying off one of two student loans about 3 years early and I’m saving money for a house. I would probably still be floundering and whining about how I’m broke all the time, with no idea what I was doing with my money, if it wasn’t for GRS and many of the books and resources you’ve turned me on to.
    Its been really inspirational to watch you make progress and see that it really is possible to get ahead by simply taking control and setting goals.
    Congratulations again, I’m looking forward to following your journey into the seldom explored territory of debt-free living.

  19. BuildAndSucceed says 04 December 2007 at 03:30

    I just wanted to say great post and congratulations! I wish you the best of luck in your transition and I think you’re going to do a great.

  20. Amanda says 04 December 2007 at 04:11

    Hi JD. That must be a great feeling! I find you website truly inspirational. Thank you and congratulations!

  21. Patrick says 04 December 2007 at 04:16

    JD,

    Congrats on your success! Not comes the fun part – watching your investments grow! Good luck on your transition to becoming a full-time writer. I think being debt free will give you the freedom to really throw yourself into it.

  22. Josh says 04 December 2007 at 04:34

    Woo hoo!

    You are on a roll! Way to go.
    I’m very glad for your debt reduction and move toward full-time blogging/writing. Doesn’t it feel great to accomplish goals?

  23. SingleGuyMoney says 04 December 2007 at 04:38

    Congratulations! I know it is a great feeling to have sent that “last check”.

    Good Luck on your transition to full time writer.

  24. Sam says 04 December 2007 at 04:54

    Such happy news!! Thanks J.D., GRS has really helped me to stay on track with my own debt snowball. I’m looking forward to being debt free (except for the mortgage) within 8 (I hope) weeks.

  25. fivecentnickel.com says 04 December 2007 at 05:08

    JD: Let me be the 19th (or 20th) to congratulate you!

  26. Malva says 04 December 2007 at 05:08

    Congrats!

  27. shawn says 04 December 2007 at 05:26

    First of all massive props for paying off your debt. Second though my job without a fully funded emergency fund would make me nervous as hell. However given that you’ve done pretty damn well the last 3 years and I don’t know the particulars of your writing income I’ll give you the benefit of the doubt. Way to go.

  28. Plan Your Escape says 04 December 2007 at 05:27

    Congratulations JD!

  29. the 40's gal says 04 December 2007 at 05:34

    Congratulations, JD!
    Yesterday I scheduled the last payment on the 0% interest credit card I used to buy a new car 18 months ago – the only debt outside a mortgage that I’ve ever carried. Even without having contributed interest, it’s always a great feeling to get rid of a debt!

    Happy holidays to you and yours!

  30. Brad Rhine says 04 December 2007 at 05:52

    Congratulations! Way to go!

  31. Josh says 04 December 2007 at 05:58

    Congrats JD!

    (my first comment after >1 year reading your fantastic blog)

  32. Blake says 04 December 2007 at 05:59

    I’ve been lurking and reeping great advice from your blog for awhile now. Now seems as appropriate time as any to shout out, CONGRATS JD!!! Try to remember that feeling of being on top of the world. God knows – you earned it.

  33. Gooniette says 04 December 2007 at 06:06

    Congratulations!
    I’m looking forward to seeing what you do with your money now that you’re not paying things off.
    I currently have no debt and the money is just accumulating in a money market (and Roth IRA) until I buy a house and figure out what to invest in.
    I appreciate all the tips!

  34. Kent Thune says 04 December 2007 at 06:09

    Congratulations… It sounds as if you chose a path, then decided to “become the path…”

    “You cannot tread the Path before you become the Path yourself.” Zen Saying

  35. scott neumyer says 04 December 2007 at 06:13

    HUGE Congrats! That’s fantastic news. The wife and I still have a bit of a ways to go, but your story is just more inspiration. 🙂

  36. Jimmy Lutz says 04 December 2007 at 06:14

    Congratulations? It must be a really great feeling. I am using Dave’s plan myself, just not 100% into it. I am moving into it slowly. I can’t wait to declare that I am debt free.

  37. Mrs. Micah says 04 December 2007 at 06:16

    Congrats! Looking forward to the last mortgage payment post!

  38. Heidi says 04 December 2007 at 06:18

    Congratulations! That’s awesome, JD. I can’t imagine how wonderful you must feel.

    You are a living example of what I hope to accomplish with my personal debt!

  39. JD isn't qualified! says 04 December 2007 at 06:19

    I can’t believe how many people are giving JD “props”. I’ve read a few articles on this site and I’m thoroughly unimpressed. Getting out of debt is a great personal achievement but it’s not something to brag about. The reason he was in debt in the first place is because he was insecure about who he was and figured buying “things” would make him feel better — and this went on for years. I also get the feeling from another article that JD is penny-wise and pound-foolish — so mindful of reducing his heating bill by $20/mo, while paying down his credit cards in the wrong order. And it’s one thing to say that you want to build up a 10k cushion and put 5k in your IRA but it’s another thing to do it – I’ll bet dollars to donuts that he buys that mini cooper first.

    I don’t mean to rain on your parade JD, but you’ve made some compulsive, irresponsible, bonehead moves for someone who is giving out financial advice and I just don’t think you’re qualified to do so!

    • Keith B. says 07 July 2011 at 15:25

      Man, what a douche.

  40. Dave says 04 December 2007 at 06:29

    Isn’t it great to see all your hard work pay off? I, too, can’t wait to see where this blog is heading in 2008. Like I said before, this blog is my Dark Tower series, Lord of the Rings, whatever. Except you’re on “real-world” type quests, which makes things much more interesting and fun!

  41. SJean says 04 December 2007 at 06:32

    Congratulations JD! I’m glad I found your blog when i did–it is by far the best PF blog I read. While I never fell into the trap of debt, your blog (and others) ahve helped me make smarter choices with the money I do have.

  42. FinanceAndFat says 04 December 2007 at 06:34

    Inspiring story. Congrats!

  43. Zulu says 04 December 2007 at 06:38

    Congrats JD! My wife and I have a similar story, and hit the same milestone earlier this year, so we know exactly how it feels. Hard to beat looking at your finances and seeing only black ink. Keep up the good work 🙂

  44. Kay says 04 December 2007 at 06:38

    I hate to post a “me too” comment, but let me pile onto this bandwagon and wish you a hearty congratulations, JD!

  45. Angie says 04 December 2007 at 06:42

    omg, congrats!

  46. NCN says 04 December 2007 at 06:43

    YAY! This is awesome!!! Congratulations…
    Doesn’t it feel great! YES, YES, YES, YES, YES!!! Keep it up and good luck with the emergency fund!!!

    YOU ROCK!!!!!!!

    NCN

  47. Olga says 04 December 2007 at 06:44

    Congratulations! It’s such good news!

  48. Ryan says 04 December 2007 at 06:50

    Congratulations J.D.!

    My wife and I are almost consumer debt free, however we still have a lot of school debt left, plus our car. Reading your blog and following your successes is an inspiration and creates a feeling of ‘we can make it too!’.

    Thanks!

  49. Rob says 04 December 2007 at 06:51

    Congrats on this milestone, JD.

    I just want to point out that although you mentioned retiring your mortgage in half the time in your post, by making an extra principal payment every month you will pay it off much more quickly than half the time.

  50. Elizabeth says 04 December 2007 at 06:52

    Congratulations and enjoy that good feeling!!

  51. SG says 04 December 2007 at 06:52

    Congratulations! I’ve been following your progress for a little while now, and I’m looking forward to reading more about your debt-free life!

  52. Stephen Popick says 04 December 2007 at 07:05

    And thats an awesome way to end a year, isn’t it.

    JD, you’re already rich. Add up what you’v helped other saved, or what you’ve helped them invest.

    Priceless!

  53. FMF says 04 December 2007 at 07:11

    Good for you! Congrats!

    FYI, I always find it amusing when you say you’re a “box salesman.” I guess someone has to do that, but I never really thought such a position existed. 😉

  54. Z says 04 December 2007 at 07:24

    Congrats JD!!

  55. Dirac says 04 December 2007 at 07:25

    First (I am a gamer) so the correct form is Woot!

    Second, to JD isn’t qualified!…you seem to be missing the point (picture this, the point is an orange in the center of Yankee Stadium and you seem to be looking on Neptune)…JD is a NORMAL PERSON taking control of his finances. We all have things we purchase which we should not have. I also don’t know many folks who in fact did not rack up credit card debt after college and it was not to make us feel better, it was to buy groceries and fix a stupid car that never worked yet we could not buy another one. Why should he not meet his goals?

    Just curious mr. JD isn’t qualified!…is it lonely up there on your pedastal.

  56. Him & Her says 04 December 2007 at 07:27

    Congrats! Yours is a good story about how even after 20 years, you can still become financially savvy and have a financially secure life. Rock.

  57. J.D. says 04 December 2007 at 07:38

    Commenter #41 said: I can’t believe how many people are giving JD “props”. I’ve read a few articles on this site and I’m thoroughly unimpressed. Getting out of debt is a great personal achievement but it’s not something to brag about.

    🙂

    While I’m sorry that you’re unimpressed with the info at GRS, I agree with you that I am not qualified to give personal finance advice. Fortunately, I don’t claim to be. From the start, I’ve been up front that I’m just a regular guy who has made some dumb mistakes and who has decided to correct them. What I’ve been trying to do is share the knowledge that I learn along the way, as I pull myself out of debt (and beyond).

    I still make mistakes, of course. I believe we all do. But I’m doing my best to learn, and I’m doing my best to share what I learn.

    As for your specific remarks:

    1. I don’t think that there’s a right way or wrong way to pay down debt. When I talk about the debt snowball, I make it quite clear that there’s some marginal savings through paying debts highest-interest rate first. This is the order that’s most logical. What many people miss, however, is that if a person in debt were being logical, he wouldn’t be in debt in the first place. Money is more about mind than it is about math. Also, different techniques work for different people. For me — and for many others in my position — paying low balances first is an important first step. It provides quick psychological victories, and lets us know that we *can* take control of our money. Sure, it costs us a few dollars more. But failing to pay off the debt because we get discouraged would cost even more. The debt snowball is a valuable tool — it’s not “wrong”.

    2. I admit that in the past I *have* been penny-wise and pound-foolish. No question. There’s still some of that in me. But if anything, I’ve swung to the other extreme. I’ve become a skinflint. I’m unwilling to spend money on *anything*. And while I can’t guarantee that the MINI Cooper won’t come first, I’m 99% certain that it will not. In fact, I’ll bet I have the $5,000 in my 2008 Roth IRA by the end of June. The $10k emergency fund is going to take some work, and I can’t predict how long that will take, but it’s one of my top priorities right now. Without it, I will not feel comfortable quitting the day job. That MINI Cooper is a very pretty thing, and I want it, but it’s a low priority.

    Finally, while I’m not qualified to offer financial advice, I feel that in some ways I’m far more qualified to speak to the average person about financial decisions than most investment professionals. Why? Because I’ve made the dumb mistakes. I know what it’s like to be deep in debt. I know what it’s like to make bad choices. I know what it’s like to live paycheck-to-paycheck. I also know what it’s like to crack down and work my ass off to get out of this mess. I understand the psychology.

    As I read personal finance books, I’m often surprised at how lame much of the advice is. “Simply tuck $4,000 into a Roth IRA that invests in broad-based index funds.” Doing that is not so simple for many of us. Not only do we not have the money, but we don’t have the right mental attitude. Personal finance books written by professional advisers are all about numbers and best practices. They have little or no relation to my world. That’s why Dave Ramsey is so successful. He understands that making smart money choices is all about psychology. And I believe that’s where I can help people, too.

    Last spring, I took some flak because I didn’t understand basic financial concepts like leverage or how the bond market worked. I don’t mind. I can learn about those topics. I’m more concerned with how the human mind works, and how I can help other people cast off old thought patterns and take on new ones.

    I am not qualified to give personal finance advice, but I *am* qualified to talk about the psychology of money. And I’m qualified to learn (and to share what I learn).

  58. Dan says 04 December 2007 at 07:40

    JD,

    Congratulations! Thanks for the great tidbits. Your victories make me want to do better for myself!

  59. Dylan Ross says 04 December 2007 at 07:43

    Awesome! Good for you!

  60. Dave C says 04 December 2007 at 07:45

    @JD isn’t qualified!:
    I’m sure JD would be the first to say that he’s NOT an “expert” and nobody should blindly follow his advice. At the same time, I’d say sure he’s “qualified” because he’s only talking about his own situation, just like most other pf bloggers. And in his situation/plans are things many others can identify with and possibly modify to make work for them. Not raining on his parade indeed; seems to be that was your entire purpose.

    I’ve had no debt outside of my mortgage for 8 years, buy cars in cash, started a 401k at 18, max out my Roth each year, and have 12 mos emergency fund. Am I “more qualified” than JD? Would my (imaginary, unfortunately) blog posts be more worthy? I think not (hell, they’d be largely similar). I think the fact that JD became AWARE and is honestly STRIVING to improve his situation (now awesome by most standards in this country) is all the qualification he needs.

    @JD:
    If you’re gonna do something you may as well do it optimally right? Consider getting yourself a better rewards card, 1% is very average nowadays. I currently earn 5% or 6% (2 cards) on gas, grocery, and drugstore purchases, and 1.4% (a third) on everything else. There are a few more options out there. E-mail me or speak up if you’d like to be linked to another forum containing a thread with a consolidated “best of” list (no spam, but not sure about 3rd-party linking in your comments).

  61. Brooke says 04 December 2007 at 07:51

    Congrats JD! I know how hard it is to change your whole mindset from “super consumer” to “Saver.” I’ve been going through that process myself for about 3 years, and it’s a learning process. It is so encouraging that despite the occasional purchase here and there, you still got out of consumer debt in about 4 years. I recently started my debt snowball and I will have my huge student loan (almost $50K) and some other debt paid off in 4 years, and I can’t wait.
    As for Commenter #41, if you think JD is so unqualified to write about Personal Finance, then why are you reading his blog? It’s obvious from all the other comments on here that his blog helps many people focus on their financial goals and motivates them to keep going. It’s inspiring to read JD’s and his guest authors’ articles and see that everyone has the same struggles. Personally I feel this is the best PF blog out there. I love how JD posts new articles every single day, they are all interesting and they are always about different topics, but all focus on the same goal. JD, I find your work very inspiring and motivating. It helps me stay on track and I am sure I’m not the only one who feels that way. Thanks so much JD, and congrats to you and Kris too.

  62. Alya says 04 December 2007 at 07:51

    Congratulations! I know what that feels like. I did some credit card mistakes, and mine was due to the influence of my friends. I was lucky my parents chipped in and saved me. That was enough for me to ensure never to be in debt again. I now save so much to make up for the lost times (almost 50-55% of my earnings). I now have a sound stand on my finances, but I still have a far way to go. I read your blog daily and had benefited so much from it. You are constantly an inspiration and that is what I like about you and your blog. Keep up the good work!

    To commenter #41, please read the comments sent by others. He has and is inspiring so many people. His personal truth is what makes this site so real and close to our hearts. Can you do the same?

  63. Patrick says 04 December 2007 at 07:56

    JD,

    The reason your blog is so successful is for all the reasons you outlined in your response to commentator #41.

    The psychology of money and how people interact with money is often far more important than maximizing 2 or 3 percentage points of interest on $5,000 debt. Creating solid financial habits will *more* than make up for not being a rate chaser.

    Honestly, I could make a lot more money if I were willing to devote a couple hours everyday to finding the bank with the best interest rates, opening new accounts, transferring money, haggling with customer service reps, etc. But, I choose to have a life instead.

    I think the broad appeal of your blog extends to people who also choose to have a life, but need a little help understanding some of the human element involved with financial decisions.

    You’ve inspired many people to improve their own life situation, and that is a pretty awesome thing to do.

  64. drhands says 04 December 2007 at 08:08

    @ M!

    You posted my sentiments almost verbatim.

    I have always lived a debt-free lifestyle, but until recently, I lived paycheck-to-paycheck, with no real goals or plan to get ahead. I had “spend less than you earn” down pat, but otherwise, I was adrift.

    Since discovering GRS, I have begun to spend and save with a purpose.

    Thanks, J.D., and congratulations!

  65. Brian says 04 December 2007 at 08:09

    Rock on J.D. Isn’t your accomplishment an amazing feeling? It was to us. Keep up the intensity and make your goals become a reality. In due time, you will look back on the things you have achieved and smile with pride in the fact that you have finished what you set out to do, and your life was better because of it.

  66. Cyndi says 04 December 2007 at 08:24

    Congratulations J.D.! You’re doing great work with this blog!

  67. Jill says 04 December 2007 at 08:24

    Congratulations, JD! I am so proud of you.

    #41, can I take you outside? JD has accomplished smething big here, and he has also created a forum for us all to share our common goals and interests. If you don’t like it, bugger off!

    #41 is probably just envious and has thousands of dollars in consumer debt that he/she is self conscious of.

  68. seawallrunner says 04 December 2007 at 08:30

    Congratulations JD !!!

  69. Kris says 04 December 2007 at 08:32

    JD, congratulations! It’s wonderful to be free of debt, and you’ve made great leaps to get there.

    Ignore #41. No love for the haters.

  70. icup says 04 December 2007 at 08:41

    Congrats. What’s especially nice about this accomplishment is that it gives us little people a sense of closure to the story. Closure is very important in terms of psychology.

    With your story, you have inspired probably hundreds of others to follow in your footsteps, and showed them how to do it as well. That, my friend, is a *significant* life accomplishment, that will be worth more to you than any of the money you feel you have squandered on finance charges over the years.

    Thousands or even hundreds of thousands of ‘wasted’ dollars are monumentally insignificant in comparison. You are making the world a better place.

  71. JACK says 04 December 2007 at 08:42

    Congrats, JD!

  72. Betsy Teutsch says 04 December 2007 at 08:46

    Okay, JD. Great, great achievement, but I’ve been nagging you a long time to think about what you’re going to do when you’re affluent. You need a plan… I call it a financial mission statement. Since you have cut back on materialism and see the benefits of an edited life, you’re going to accumulate money, not stuff. What will the surplus be for? Eventually you won’t need to work as much. What is your task in life, and how will your assets serve you and enable you to fullfill it?

  73. Flexo says 04 December 2007 at 08:47

    Congrats, J.D.! It must be a great feeling to be free of debt.

  74. paidtwice says 04 December 2007 at 08:59

    Congrats soooo much JD!!!! I hope to join you at that place in a few years. Debt free here I come 🙂

    And as for the naysayers – what JD said is how I feel too. If you’ve never been in debt, it is hard to speak to it with authority. I think that’s why Ramsey is so popular, he’s been there. JD too.

    JD doesn’t have all the answers but he certainly has a compelling story, and he’s interesting, to boot.

  75. kev says 04 December 2007 at 09:01

    Congrats!

  76. MaxHedrm says 04 December 2007 at 09:02

    Congrats! By the end of this month I’ll be down to my car, mortgage and an equity loan I took out for those overpriced windows. All 3 of which I am ok with. The car goes first though.

    I also managed to up my 401k contribution to 10% this year. I went from 2% (required to get the full corporate match) when I thought the division I am in was going to be sold off, so I would be sure to have a decent chunk in there to grow. But I “forgot” to change it back when the deal fell through & haven’t missed it.

  77. Belinda says 04 December 2007 at 09:03

    Congratulations on paying off your debt J.D. I’ve enjoyed reading about your process here and hope the best for you when you go to writing the blog fuill time.

    Belinda

  78. Justin says 04 December 2007 at 09:03

    FREEEEEEDOM!! I’m no Dave Ramsey, but I love it when he plays that on his radio show. Congrats!

  79. JD isn't qualified! says 04 December 2007 at 09:10

    I’m admittedly impressed with number of JD’s loyal readers. At first I figured that all these posts were from JD’s friends and family but maybe there’s something valuable here that i’m not seeing… and I hope it’s the latter.

    To Jill…
    Why do you wish to take me outside? And bugger off? In case you haven’t caught onto how a message board works, i get to express my unfiltered opinion. And with the exception mine, every post here is a facsimile of the first. One of the founding principals of this country, your country (I’m assuming you’re British), and the internet is that each and everyone of us has a right to speak one’s mind. It’s nice to see that JD isn’t a fascist like you and he allows my post to stand.

    All I was saying is that for those of you who want to give JD a hug… go ahead! But I would think twice about taking his advice.

  80. Fox Cutter says 04 December 2007 at 09:16

    Congratulations, this is a big moment for you. 🙂 It looks like that by the end of the month I’ll be down to just my car loan, so I’m heading down the same path you are. Frankly I’m doing it because of your site, it help crystallize a few things, but that’s another story.

  81. Dave says 04 December 2007 at 09:20

    #41 — You are privy to a Great Becoming and you recognize nothing. I feel sorry for you.

  82. AaronFromSeattle says 04 December 2007 at 09:36

    Congratulations J.D. and thanks for all the hard work that goes into this blog each day!

  83. The Travelin' Man says 04 December 2007 at 09:36

    JD – Congrats to you. I hope to feel the same sense of accomplishment some time soon. The only debt left on my balance sheet is my small mortgage, my student loan, and some medical bills – which fortunately do not accumulate interest.

    I listen to Dave Ramsey on and off (too much religion for me, but I get the message). I haven’t bought into some of the things that he says (“rice and beans”, for instance) because of the same psychology of money issue. I don’t want to resent getting up to go to work in the morning and having no reward ($$ – and, more importantly, the ability to spend it on things that I like). The key is moderation. You said earlier that you have become a “skinflint”. It almost sounds like you are denying yourself things. In my mind, the idea in changing my lifestyle and committing to live debt-free still involves spending (SOME) money on the things that I enjoy most.

    Still….Cheers to you and yours!

  84. Jude says 04 December 2007 at 09:56

    Congratulations! As a college senior, I’ve managed to stay out of debt so far (with the exception of student loans), thanks in part to bloggers like you!

  85. ninemuses says 04 December 2007 at 09:58

    JD, I’ve been reading your blog for some months now, and it has helped inspire me to really get serious about paying off my debt. My story is similar to yours in many ways, having acquired a lot of debt by making some not-so-great choices over the last 15 years or so. I am also following Dave Ramsey’s plan now, and have just filled out my first emergency fund, and am looking forward to my next paycheck and making my first extra debt payment.

    Congratulations on paying off your debt. Yesterday was my 32nd birthday, so it was a day of celebration all around! Good luck with your move into self-employment and I wish us both success in our lives!

  86. Dividends4Life says 04 December 2007 at 10:09

    Congratulations! It must be a great feeling of accomplishment. Spend some time reflecting on and enjoying your success. Then I would encourage you to attack your mortgage in the same way. Once you are totally debt free, including your mortgage, there is a sense of financial freedom that is hard to describe.

    Best Wishes,
    D4L

  87. Cheryl says 04 December 2007 at 10:25

    ??? Am I missing something here??? You say you are debt-free but you have a mortgage? Sorry, you are still saddled with a crushing debt!

  88. Liz says 04 December 2007 at 10:30

    Congratulations!!!

    My husband and I both just made the last payments on our student loans. We owed $10000 and $60000 loans respectively. For 6 years we chipped away at them and were only half way there. But following many of the simple rules and applying a lot of discipline we payed off the remained half in only 6 months!?!?!

    We feel reborn. But rather than go back to our old spending habits we’re going to sock as much money away for the next year and use it to travel around the world.

    Good luck with your future plans!

    Liz

  89. J.D. says 04 December 2007 at 10:33

    Well, technically I’m saying that I’m “debt-free except for my mortgage”. While I recognize that he mortgage is debt — and a big one at that — I don’t consider it “crushing”. It doesn’t feel “crushing”, especially not in the same way that my credit card debt felt. Many people believe that one ought not be in a rush to pay off your mortgage. Others — such as yourself, apparently — believe that it should be a top priority. Kris and I are somewhere in between. We don’t like the mortgage, and we want it gone, but we’re not willing to sacrifice retirement savings for it.

  90. debtheaven says 04 December 2007 at 10:45

    Congratulations, JD. The point is not just that you paid off your (non-mortgage) debt. The point is also that you saw something you didn’t like, and set out to change it, and you accomplished your goal. Some people don’t seem to get that.

    How lucky some people are to be able to buy a home with cash!

  91. Jeffeb3 says 04 December 2007 at 10:57

    Now here comes the hard part…

  92. Peachy says 04 December 2007 at 11:49

    Congratulations!!
    This is a great accomplishment. You finally see the light at the end of the tunnel, but you are also AT the end of the tunnel. Kudos. Your hard work has finally paid off.

  93. Stacey says 04 December 2007 at 11:58

    Congratulations and thank you for sharing! I have no debt, but I’ve always enjoyed this site- your advice, the articles and the guest posts have all been inspirational as I also attempt to GRS. Keep it going!

  94. Stacey says 04 December 2007 at 12:02

    Some people on here seem to think that a mortgage is crushing debt. As long as you can afford the monthly payments, have a fixed interest rate, and less than a 30-year term, having a mortgage is no problem. There is a very popular and widely followed school of thought that says it’s best to invest extra money rather than use it to prepay your mortgage. I also plan to pay off my home as soon as possible, but I would never knock someone who made a financially defensible decision to do otherwise.

  95. Michael says 04 December 2007 at 12:05

    Congrats! We’re down to $5,000 debt outside of the mortgage and we’re looking finish it off by March 1st. I can’t wait!

    Your site has offered lots of inspiration for me and I thank you for the time you spend on it. (Champagne bottle popping!)

  96. Nicole says 04 December 2007 at 12:16

    JD

    Anyone who has read, listened to or watched Dave Ramsey understood what you meant by “debt free.” Obviously, there are two levels and you reached the first! Congratulations. Are you going to call in and shout “I’M DEBT FREEEEEEE!!”?

  97. Adam says 04 December 2007 at 12:22

    I want to respond to some of the comments I’ve read from “JD isn’t qualified”. I stumbled across this website about a week ago because I, like most of the readers and like most of the people in this country(USA), would like to be in a better financial position than I am right now. I’m 30 years old and while I don’t have a huge amount of debt, my wife and I find ourselves living pretty much paycheck to paycheck. I’ve been reading some books for the past few years and trying to educate myself but it has not been easy from a discipline standpoint. JD’s blog has been wonderful mainly because I feel like I can relate my situation to his in ways. I’m sure that’s why the majority of us enjoy reading. I obviously have not read every post on this website, and I haven’t read all 96 comments on this thread, but I’ve been returning daily and clicking on any headlines that look like they might be helpful. Nowhere in any of my searching have I seen JD claim to be “qualified” or an “expert”. I’ve also not seen any specifics where he said “you should do this”. This is an account of his personal journey and along the way he is sharing what has worked for him and pointed me in some great directions to other websites, books, etc. So back to “JD isn’t qualified”, I think that your user name alone says plenty about your self-image and confidence. And spare us the “it’s my right to say whatever I want” rant, we all know it, and we’ve all heard it… we get it. If you don’t have anything better to do with your time than get on here and trash everything, then I feel sorry for you because that must get boring. We’ve all made “not-so-great” choices and most of us have debt of some kind, big or small. It comes from living in a place that doesn’t teach or promote financial education. I’m thankful for JD and anyone else that is willing to offer any kind of knowledge or information that might help me better my well-being. Keep up the great blog JD, and good luck with full-timing it!

  98. Ed says 04 December 2007 at 12:47

    Congrats! I am winnowing down my debt as well and hope to be celebrating debt-free status at my favorite Mexican restaurant in the not-too-distant future!

  99. Jennifer says 04 December 2007 at 13:12

    Congrats! It feels great doesn’t it?

  100. Rachel B says 04 December 2007 at 13:27

    WOW J.D.!!
    Congratulations to one of my very favorite people in the pf blogosphere on a HUGE accomplishment.
    Inspiring…
    🙂
    Rachel

  101. Tom says 04 December 2007 at 13:45

    Congratulations. Well done!

  102. Kate says 04 December 2007 at 13:50

    Congrats from yet another lurker! I can tell you from experience that you can look forward to sleeping better! A couple of quick pieces of advice:

    1. Check out the Amex Blue Cash card, and once you’re sure you have the resolve to pay it all the way off EVERY MONTH, use it for everything. We rack up about $600 a year in rewards, and it’s cash – nothing to redeem or expire. Plus I respect the fact that unlike a lot of rewards cards, you don’t have to carry a balance to reach the top rewards tier.

    2. I think this got mentioned before, but if you keep pre-paying your bills or move to an autobill model, always check your paper statements every month. Comcast never fails to autodebit the wrong amount – usually not enough. Then they send me a late notice & I have to explain that they just didn’t take enough money…

    Finally, something that has worked for me is to treat the emergency fund as a material item. It’s something you’re buying, just like a sweater or a grill. It might not make me a shining example of a great human, but I’m OK with the fact that I log in way too often to just admire my pretty shiny balance and watch it grow in a high-yield online savings account. Looking at it makes me happier than most things I could go buy, especially given that it got us through 6+ months of unexpectedly being a single-income couple this year. So instead of begrudgingly making a deposit, just think of it as shopping online for security & peace of mind!

  103. katherine says 04 December 2007 at 14:07

    congratulations!
    you’re article really inspired me to get out of debt. mine started at the age of 18, same deal, using credit to live & then not paying it back. then my husband and i got married a couple years later & he ruined HIS credit! now at the tender age of 24, our debt is haunting us, bad. our circumstances are coming up to a point where all is falling into line & i’m bookmarking this site to show him we can get out too! thank you!!

  104. Tim says 04 December 2007 at 14:20

    Oh, you guys are taking JD Isn’t Qualified too seriously…he is simply double dog daring JD into actually accomplishing the goals he has set for himself and his family now that he is out of debt (minus the mortgage of course).

    I’ll refrain from congratulations as well, b/c JD shouldn’t rest on his laurels just yet. The non-funded emergency fund going into a new job worries me. I do wonder why JD would venture off from being box boy until after establishing a larger emergency fund. It doesn’t have to be the full $10k, but given the new job, I’d want a little more cushion, especially with a new car on the way and the old house. working a few more months as box boy would afford the opportunity to build the cushion.

    also, although the new resolutions are good ones, the savings goals simply aren’t there. You have a $5k RIRA goal, but that definitely isn’t going to get you to a healthy retirement. You have two spending goals (vacation and mini) and paying off the mortgage early. These are nice, but really, you should be thinking more about your overall savings plan rather than spending.

    you definitely need a breather, but you want to take a breather past the milestone, not at it.

  105. steven says 04 December 2007 at 14:21

    Congrats! Must feel amazing not to owe – and own – bad debt.

  106. Jon says 04 December 2007 at 14:24

    Congratulations! We’ve been following your story since the early days of the blog. Enjoy this accomplishment today, you’ve earned it!

  107. mahalie says 04 December 2007 at 14:39

    CONGRATULATIONS!! I’ve been reading your blog for quite a while, it’s like “money church” or something, keeping me on the path. I paid off half my debts last year and hope to be 100% debt free in six months. Thanks again for leading the way!

  108. Cady says 04 December 2007 at 14:46

    I’m really late to the Hooray Party but for something this remarkable, I’ll add it anyway.

    Big Congrats to you J.D.

    That’s an amazing accomplishment.

    And thank you for hosting this wonderful site. The more I use it the smarter I get regarding my money choices. It is nice to know there are other people on the road to less (unsecured) debt!

  109. Esme says 04 December 2007 at 14:55

    Congrats on being debt free! And thanks for the link to your pre pay mortgage post which is something I’ve been grappling with.

    One suggestion – since you’re now going to be self-employed, what about a SEP 401(k) instead of a Roth IRA? The maximum is higher allowing for more tax free savings.

  110. TosaJen says 04 December 2007 at 15:37

    Congrats JD! You’ve accomplished a lot, and shared the information you’ve learned in a thoughtful and well-written way.

  111. Aleks says 04 December 2007 at 15:39

    A mortgage is a separate class, what most people refer to as “good debt”. After all, if you rent you don’t have any debt, but you still have to pay for shelter. Being mortgage/rent free is a whole other class of freedom altogether.

    What I’ve always wondered when I hear about people who get into debt like JD did, is how did you ever get a mortgage? Did you save up a downpayment while simultaneously carrying tens of thousands in debt, or did you get a zero down mortgage during the subprime lending salad days? Or did you borrow from the bank of Mom and Dad?

    I have no debt, but I’m still having trouble saving up the $50,000 – 100,000 for a 25% down payment. Then I hear about people who bought homes with negative liquid assets and wonder what they know that I don’t.

  112. jack says 04 December 2007 at 15:41

    Congratulations…! I will be debt free soon. We have a long road but are following the DR plan and get there eventually.

    Again….way to go!

  113. Tired says 04 December 2007 at 15:47

    J.D. — Congratulations! Look at all the freaking comments on your blog! You’ve not only paid off your loans, you’ve started a small fan club. 🙂

    I agree with you; money, for the average person, is more psychological than mathematical. I haven’t yet read Dave Ramsey but I’m going straight to my library website to reserve it.

    Way to go!!! And, for the record, most of us realize you’re not a financial advisor. 🙂

    Keep writing; I’m at the beginning of my debt journey, and I need all the tips I can get.

    ~M

  114. AC says 04 December 2007 at 15:48

    AWESOME, JD! I’ve just loved following your story and I’m looking forward to seeing where it leads, especially with the transition to fulltime blogging/writing. Even though I’m doing pretty well managing my finances (lots of savings and no debt…my blog would be so boring), reading GRS helps keep my motivation up and spending in check.

    One thing I noticed–you said your 2008 Roth IRA would be fully funded by June. I was going to fund mine all at once but a financial advisor friend talked me out of it, saying that it’s better to spread it throughout the year to take advantage of dollar-cost averaging. I’m not sure if it matters to you, but I thought you might want to look into it.

    Congratulations on reaching this milestone and best of luck in achieving your other goals!

  115. Matt Wolfe says 04 December 2007 at 15:49

    Congratulations. That’s really exciting. I can’t wait to see where this blog goes once you devote your full time effort to it.

  116. Jennifer says 04 December 2007 at 15:53

    Woo hoo! Congratulations! I’m doing the happy dance for you.

  117. SR says 04 December 2007 at 16:49

    Congratulations!! I can’t wait to get to that point myself — hopefully in the next year.

    I say definitely keep a credit card on hand (I think they are useful when used mindfully). Though, I’d also recommend looking into an airline card, depending on how much you travel. A girlfriend of mine has one, uses it for most purchases, and pays it off every month. She generally gets at least one free ticket every year — in addition to the free ticket I believe she receives every year when she pays the membership fee. If you have any interest in travel, it’s definitely a beneficial option to consider.

    Also, congrats on making a plan to save for the Mini and vacations. It’s incredibly satisfying to buy something you’ve specifically saved for! I LOVE the feeling of reaching a goal and buying myself something I’ve really, really wanted, that I’ve specifically saved for.

  118. Cheryl says 04 December 2007 at 17:56

    Luck has nothing to do with paying off a mortgage, as was suggested earlier. It is a choice to buy an affordable home and pay it off as soon as possible. Maybe even drive a car for 20 years, or take a bus to work instead of having a second (or third, or fourth) car. Choices like that.

    A mortgage is not “good” debt, any more than high credit card balances were “good” debt in the days when the interest was deductible. Debt is debt. If an unexpected layoff or medical expense comes along, you will be in a world of hurt with a large mortgage and may lose your home. And a paid-off mortgage is one of the best ways to prepare for retirement.

    Don’t get me wrong, I applaud your successful effort to pay off your consumer debt but hate to see so many people think that is the end of the story.

  119. FourPillars says 04 December 2007 at 18:03

    Kudos!

    Mike

  120. Gregg says 04 December 2007 at 18:43

    Congratulations, JD.

    15 December I pay off my mortgage on my rent property.

    My first priority for January will be starting a Charitable Investment Trust with Fidelity. I have wanted for over 20 years to set up a meaningfuly philanthropic tool, and this is it.

    Once I come off Military orders in March, I am looking at the options of either buying a duplex – fourplex, or renting an apartment on military orders until at least March, I have all my stuff in storage.

    Anyhow, congratulations JD Also, how is the weather affecting you. I have heard horror stories about Portland – Seattle. Know you are in many people’s prayers.

    Gregg

  121. Bethany says 04 December 2007 at 18:45

    That’s so wonderful!! Way to be, man. And your move to full-time writer takes a lot of guts…quite the inspiration.

  122. Bethany says 04 December 2007 at 18:45

    That’s so wonderful!! Way to be, man. And your move to full-time writer takes a lot of guts…I have been quite inspired. Good luck.

  123. Tezza says 04 December 2007 at 19:39

    JD, thats a commendable achievement. I look forward to reading about your new focus for financial growth in your future blog posts.

  124. mapgirl says 04 December 2007 at 20:05

    Congratulations JD! That’s really wonderful news!

  125. Chief Family Officer says 04 December 2007 at 20:26

    Congratulations! That’s absolutely wonderful!!!

  126. GT says 04 December 2007 at 23:02

    “I’ve scheduled automatic transfers to my ING Direct savings account.”

    You should do it the other way about, have ALL your deposits sent direct to the savings account, and schedule transfers out. This way, you’re less inclinded to spend some ‘spare’ money sitting in your daily account, and more importantly, you’ll get more interest.

    I have my wages goto my savings, and on a weekly basis transfer money across to my daily account to cover shopping budget, bills and spending money. And then every fortnight seperate transfer to cover house payments. So while that extra money is sitting in my savings account, it’s getting more daily compounding interest.

  127. GT says 04 December 2007 at 23:03

    (unless of course you have a full offset account on your mortgage)

  128. J.C. says 04 December 2007 at 23:09

    Congratulations JD! Even though I’ve never really been in much debt, I envy the way you must be feeling right now.

    I paid off a small car loan in a few months, and that like a small victory. I can only imagine paying off 20 years of debt must be a tremendous fealing.

    I think its interesting that you know the debt snow ball method is mathematically flawed, you still chose to adopt it. Since you keep all your finances tabbed now, do you have any idea how much more money the debt snowball costs, compared to paying off the highest interest loans first (assuming you had the will power)?

    I always enjoy reading your blog, and I wish you continued success in the black..

  129. Phil says 05 December 2007 at 00:18

    Congrats! Now you can get the mortgage paid off. Yes, it works to pay extra on the principal every month: we paid off our 15 year mortgage in 9 years this way (paid off in 1999 – debt free since then). When we had bonuses we also put a big chunk of that money into paying off the mortgage as well. But ditch the mini-Cooper idea: part of what allowed us to pay off our house early was driving our old cars – I’m still driving the car I bought new 20 years ago and it’s still doing fine (Hondas are great that way). Put that car money towards your mortgage – actually, now that you’ll be working from home you probably don’t need another car anyway 😉

  130. Bruce says 05 December 2007 at 02:40

    Sincere congratulations on a job well done.

  131. Schizohedron says 05 December 2007 at 07:00

    Hats off to you, old bean! And best wishes for the new life path as well.

  132. Sue says 05 December 2007 at 07:41

    Congrats! Reading about your progress has been a real inspiration to me, thank you for sharing your story. I too have been dinking around for the last 20 years with debt and decided earlier this year that I am not going to tolerate this anymore and have been steadily decreasing what I owe and increasing savings and retirement. Thanks again for sharing with everyone how you did it and letting all of us see it can be done.

  133. db says 05 December 2007 at 08:58

    JD —

    I am so happy for you!!! Now, just like a dieter comes the hard part.

    Not going back into debt!!!

    DB

    P.S. — My votes: defer the mini cooper until you’ve got the emergency fund AND the spare cash, preferably as a bonus from unneeded funds. And pay down your mortgage early!

    P.P.S. — Pooh on the haters

  134. Rich D says 05 December 2007 at 09:19

    Congratulations on becoming debt free – My wife and I just started our journey to becoming debt free in October. We have a larger debt to tackle but are focused on reaching our goal of being debt free by June 2009. Thank you for your site and this post in particular – I printed it mounted it to the wall of our office as a reminder that it can be done.

    Good job!

  135. Cherie says 05 December 2007 at 09:41

    My husband and I paid off all of our credit cards and cars about 6 years ago. It took us 3 years to pay off about 32k in debt.

    With that lack of debt we were able to start our own business and buy a house.

    We were able to put over 100k in the bank at one point. Of course, the new house has gobbled up most of that, but they say this is an investment.

    We do use credit cards all the time. We have 2 cards that both give us back a percentage of our purchases. With the cards we are able to track all of our expenses, which out accountant likes. Each card gets paid off at the end of every month. We have not carried a balance on a credit card in 6 years. If it isn’t in the budgeted amount we have to spend on the cards each month, it doesn’t get bought.

    I think the thing to remember the most about getting into debt is “if you can’t pay it off at the end of the month, don’t buy it”.

    Don’t buy it. Just don’t buy it. You know you probably don’t need it.

  136. Dave C says 05 December 2007 at 11:53

    At AC (#119):
    Re: the dollar cost averaging your Roth contribution… that is NOT bad advice from your financial advisor, dollar cost averaging is mathematically proven to be “for the win”. However, it becomes somewhat mitigated the longer your investment horizon is and presumably Roths are quite long-term for most folks. After 30 years, the difference between investing $5000 up front vs. $416.67 each month will barely be noticeable. That being said, I’d recommend doing what best fits your “money psychology” (hey, just like the argument for debt snowballs). If you prefer to make the lump sum contribution and stop worrying about it, do that. If you prefer to, or by necessity must, make weekly/monthly contributions, do that.

    I’m wrestling with the same decision myself, and my situation throws another monkey wrench in. I invest with Vanguard, where most all initial fund investment minimums are $3000. As far as I can tell, they do NOT allow you to meet this via automated payment thru the year that SUM to $3000. So my tentative decision is a compromise. I have $1000 still to contribute in 07, and have an S&P fund open. On Jan 1st I plan to contribute $3000 and open up an emerging markets/total stock index fund (the wife’s account too). Then divide $3000 by 12 and contribute that amount between the two funds on the last day of each calendar month. And yes, the way the markets are going I could look rather bad on paper making that big lump sum contribution. But in 25-30 years? Most likely un-noticeable.

  137. Lisa says 05 December 2007 at 11:54

    My life, too, except I’ve been at it longer. Dave Ramsey slowly is teaching me the right way to live. Which, incidentally, is the way my Grandmother taught me before I went to college and got a Sears card and before Sears gave me a discover card and before I learned the words “cash advance.” And before I was laid off and got a job paying $15,000 less. Treading water? Try 24/7 panic attack.

    Great post!

  138. Sandy says 05 December 2007 at 12:07

    Just wanted to add one more comment, and it’s about the mini cooper. First, of course get whatever you want! That’s what we all do! But here’s the thing: my girlfriend and her husband in MO got one when they first came out. They were on a waiting list for it and their color scheme was really neat. They joined a car show w/it and sent me pics. of their mini lined up against others. Well, less than a year later, they traded it in for a late model Volvo — I was so surprised. She said that as it turned out there was so little storage room in that car that after awhile, that became just too impractical for them, and something they didn’t even think about when they bought it. Fortunately for them, they actually sold it for a little more than what they paid for it, which is really rare, but I’m sure it was because of their color scheme and the popularity of those mini’s.

  139. JiltedCitizen says 05 December 2007 at 12:15

    I definitely need to try this, especially after my recent financial snafu and the banks kicking you when you’re down.

  140. jtimberman says 05 December 2007 at 14:07

    Dave Ramsey’s debt snowball method definitely works. We are debt free except the house as of last month.

    JD is perfectly qualified to write about personal finance. He’s not offering advice! He’s writing about his experiences with different aspects of his own personal finance journey. Whether the reader takes that as advice or not is up to the individual reader.

  141. LC says 05 December 2007 at 14:33

    I agree that a mortgage isn’t “good” debt but it is “less bad”

    @Aleks – try moving to an area where the average house costs $80,000. Then you can take what you would have paid for a down payment and own the house outright with money to spare. In many nice areas, a $200,000+ house is quite a mansion.

    Congrats to JD – a lot of people just give up on debt repayment because of the fact that it is a slippery slope and every day you remain in debt it just gets bigger because of interest. It takes a lot of determination to make a plan to get out of debt and then actually achieve it. Way to go!

  142. Eric says 05 December 2007 at 14:42

    Congratulations!

    Your plan for the future sounds good to me with one exception. I’d really consider the prepament on your mortage a bit more.

    One thing to remember is that the bank could care less that you have made extra payments. If 5 years from now you hit hard times and can’t make your monthly payments, the bank will take your house regardless of how much you have paid off early.

    If that money were instead deposited monthly into a high interest emergency fund you would be in much better shape to continue payments through the hard times while still negating some of the interest you are paying on the mortgage.

    Eventually some of that emergency fund could be used to pay off your house in full (earlier) which seems much safer to me. Just a thought.

    Congratulations again!

  143. Sandy says 05 December 2007 at 15:28

    I’d say continue prepaying on the mortgage. I paid off my house last month and about two weeks later, my bank pre-approved me for a $125,000 Home Equity Line at 6.55%, and an auto loan for $50,000 at 4.94%, and then a personal loan for 5,000 at 12.00% which is ridiculous, but unsecured. Believe me, once out of debt, your bank will try to woo you back. Why wouldn’t they? They make 0 when people become debt-free.

  144. Broken Arrow says 05 December 2007 at 15:42

    Congratulations! That is a monumental achievement.

  145. Mini Matt says 05 December 2007 at 18:35

    J.D, How is the Mini Cooper fund? I have one I will sell you as its costing me $550.00 per month and I cannot really afford it.
    2005 chili red, huge sunroof… nice car but is gradually eating all my spare $$$.

  146. bluntmoney says 05 December 2007 at 19:09

    Congratulations! Enjoy the feeling!

  147. Paul says 05 December 2007 at 19:33

    I read this post and I want to tell you how proud I am of you.

    Plan your work and work your plan.

    Your pragmatism couple with going after your dreams is inspiring.

    Do it… and don’t let anyone stand in your way.

  148. LeftCoastMike says 05 December 2007 at 20:08

    And now my wife and I will sit down and go over our debt and begin the journey you’ve made so much headway in.

    Congrats – your victories are very inspiring!

  149. RJ says 05 December 2007 at 20:45

    I’ll join the chorus with congrats of my own: Great job, JD!

    And @#41: It is true that financial advice and money management are tricky and touchy issues. But as many here (including JD himself) have said, JD has been up-front about his role and level of expertise in the financial scheme of things.

    For me, JD has been very much like a librarian or archivist of personal finance resources, and nevertheless has enough savvy to weigh in with his point of view on certain issues without usurping the role of a certified professional. In the same way, I don’t expect librarians and archivists to know all about the fields I’m researching, but they ought to be capable of locating arcane resources for me, and they ought to be able to use their judgment in selecting and spinning resources in my direction.

    Similarly, I don’t think one should have to be a five-star chef in order to appreciate and recommend fine food; one shouldn’t have to be an engineer and architect in order to opine on a building’s functionality; and one shouldn’t have to be a doctor or nurse in order to detect problems with the body and initiate a medical resolution. JD’s blog has been a great resource for matters requiring more specialized assistance, as well as an intelligent, well-informed voice in a dialogue on matters that do not have a one-size-fits-all solution.

  150. Luis says 05 December 2007 at 21:32

    Congrats! I started my Roth IRA because of your blog. Thanks for the words of wisdom and keep up the good work.

  151. Double Journey says 05 December 2007 at 22:55

    I will chime in as well and say congratulations. I became debt free myself a few months ago, and it has been wonderful ever since. Very liberating.

  152. Eric says 06 December 2007 at 03:46

    Good Job JD! I’m just starting my climb out of debt but your site has been a great help. Keep it up!

  153. Bobby says 06 December 2007 at 04:45

    Congratulations JD! Let us know when you call Dave Ramsey.

  154. Scott says 06 December 2007 at 04:50

    Awesome news! I’ve been working my way to debt free. I’ll be happy when I’m where you are. Keep saving.

  155. plonkee says 06 December 2007 at 05:01

    Wow. There are so many well deserved congratulations that I wonder whether it is worth adding mine. Since, I’ve started this comment, I may as well anyway.

    Well done on accomplishing such a great milestone. Not just getting rid of debt accumulated once, but getting rid of a lifetime of debt accumulated slowly and gradually.

    Onwards and upwards.

  156. Dave says 06 December 2007 at 05:39

    Congrats!

    Please remember to protect your finances by protecting your PC. You don’t want to have everything become undone by not securing your PC.

    Again congrats
    Dave

  157. Randy Peterman says 06 December 2007 at 07:40

    Congrats! And now for the rest of the world 😉

  158. Donal says 06 December 2007 at 08:18

    Congratulations! I’ve been reading your blog for over a year now and have learned a lot. I graduated 2.5 years ago and was fortunate enough to have very little debt. Free tuition where I went to college had a big part to play in that. However, as you know it is easy to slip and I have come close, but your story inspires me to stay on the straight and narrow. 🙂

    Best of luck in the future! I look forward to reading more of your writing.

  159. Jon Barclay says 06 December 2007 at 08:21

    What an achievement. Congratulations!

    Jon

  160. SMB says 06 December 2007 at 12:01

    FABULOUS! A very hearty congratulations to you!

  161. Ed says 06 December 2007 at 12:17

    that is incredibly inspiring. specially how fast you cleared that debt. im motivated by you, because when i graduate in the spring, I am going to be around 30k in debt as well. I’m aiming to pay it off in 5 yrs come hell or high water. thanks for the tips.

  162. The Chosen Lady says 06 December 2007 at 14:10

    Congratulations! Welcome to the Community of Debt-Free People!

    http://www.iamthechosenlady.com/2007/12/were-debt-free-get-rich-slowly.html

  163. Meadow says 06 December 2007 at 14:31

    Congratulations!!

    Meadow

  164. MikeVx says 06 December 2007 at 17:00

    Congrats, JD!

    I can imagine a bit how you must feel because I managed to pay off the mortgage first, and was that a load off my mind when I sent that last payment.

    I did wince a bit when you mentioned automating your payments. I learn from the mistakes of others, and I’ve learned quite a lot from people who learned the extremely hard way not to do that.

    Beyond that, your blog was the first PF site I found, and it is still my anchor point. I think I followed a link from, of all places, FARK. The links you have to various places around the net taught me much better financial habits than I had, and I’m getting there. At least when I pay off that lest debt (the car, at this point) I will be well and truly debt-free. The credit card is just about cleared, then a family loan (one of those where refusing to accept would have caused strife) and the car are all that’s left.

    Frankly, I figure that the best advice is to be had from those who dug themselves out of their own holes.

  165. zen says 06 December 2007 at 17:32

    Let me be the first (I think, I only skimmed the comments) to suggest *NOT* doing an automatic bill-pay through your creditors.

    In my experience, giving another company access to your bank account, and counting on them to accurately deduct your bills correctly is not a good move.

    I once had over $500 deducted when I had my first place with no room-mates. Needless to say it took a lot of phone-work to get it back before rent was due (and being told 30-days or more before it would be sent).

    If anything, go with a bank that will do automated checks, so you can have your checks sent out – based on your amounts, not theirs – and be in total control.

    Just my opinion, of course.

  166. Erin says 06 December 2007 at 19:23

    CONGRATULATIONS!!! I was just wondering this week how you were doing with that goal, I remember reading something you had written about December being the month.

    Enjoy the feeling! I hope to join you soon. We hope to be debt-free (except the mortgage) sometime in March.

  167. gp says 07 December 2007 at 10:56

    I must say, congratulations! I too had acquired $20,000-$30,000 in unsecured consumer debt. I too could not sleep at night.

    Now, I have a positive (income-expense) cash flow of over $3000 monthly (which mostly goes to short term savings accounts, medium term money markets, and long term IRA accounts), own three vehicles outright (approx. $60,000 worth), and own over 30% of my house (which we purchased only two years ago). All in all, I have a positive net worth of well over $100k, and I’m not even 30 years old yet! I can honestly say, this wouldn’t be the case if not for people inspiring me such as the author of these blogs that dedicate a large portion of their lives to helping others achieve such a noble (and difficult) goal! Thank you for showing everyone the light!

    Best of all, I have ZERO unsecured debt (only the mortgage, and not a whole lot there…).

    It was a very difficult decade to get to this point, but my wife and I made it, too! And like the author says, what a euphoric rush! 🙂 That “last check” was sent with a nice letter letting the credit card company know (Discover) just what kind of blood-sucking criminals they really are. I know it won’t ever be read, but it was worth it to me!

    To anyone still in debt reading this, I would strongly urge you to start following the author’s advice. Stop using the credit cards, stop caring what the Jones’s think about your clothing or cars, and start living for you and your family alone! Start living within your means people! I don’t have the nicest house, or the most elaborate clothing, or even particularly nice cars…but I do have piece of mind! My neighbors drive BMWs, or Caddies. I have Mazdas, and rather plain ones at that. But, they have $500,000 in debt, very little if any disposable income, and an ulcer to garnish that fancy little life they pretend to lead. I’ve even watched various families divorce over the years due to financial hardship, albeit from insane consumer spending habits!

    They are up pacing, while I sleep soundly.
    My wife and I are very happy and feel incredibly healthy, financially, physically, and emotionally!

    No Gucci purse or set of wheels is worth not having this!

    The absolute best part of my spring is when my neighbor drives up with his brand new cub cadet mower to rub it in my face (he cannot understand that I just don’t care about his lawn tractor?!??!?!). My response is always a smug smile, and a comment about loving my reliable aging push mower that was paid for in cash many years ago.

  168. jp from wwg says 07 December 2007 at 13:03

    Hey, JD… Congratulations!!

  169. Justin Hensley says 10 December 2007 at 07:55

    First off, a BIG congratulations. When you say “I’ve been walking around in a happy little haze all day long.” it motivates me even more to join you in being debt-free.

    Kudos.

  170. Bill Zinc says 10 December 2007 at 18:55

    Congrats. I’m on the road to recovery myself. I’m half way there with a couple more years to go to get it all paid off… Feels better already!

    -Bill

  171. Mike says 11 December 2007 at 07:42

    I have a mortgage and a HELOC that I’m paying about $2K/mo. I’m also putting about 1600/mo into a 401K. I’m 53. At what point do or should I stop funding the 401K and pay the mort and HELOC off (combined (120K). The closer I get to retirement compound interest really doesn’t mean that much. Agree?

  172. Mark says 11 December 2007 at 09:25

    Just wanted to say CONGRATULATIONS it must be a great feeling to be debt free 🙂

    All the best with your plans for 2008.

  173. Maria says 12 December 2007 at 13:32

    Congrats! I can’t wait until I’m writing a post like this… We still have a long way to go!
    Enjoy the peace!

  174. Ana says 12 December 2007 at 15:37

    Just wanted to say congratulations!

  175. Alvin says 18 December 2007 at 23:23

    Congrats JD! Rock on!

  176. tim says 28 December 2007 at 07:26

    Good for you!

    You mention that you save for specific items (Mini Cooper, vacation). This is something I’ve wanted to do but don’t see an easy way to separate out the funds in some sort of interest-bearing account.

    How do you do it? Are you actually putting money into envelopes? I don’t want to create a new account for each saving goal I have.

    This seems like such a silly barrier, but until now, it’s been the main one keeping me from doing this.

    Thanks for your blog and good luck in the future!

  177. Darrell says 30 December 2007 at 14:48

    Congratulations and best wishes for the plunge you are preparing to take! I am currently standing exactly where you were standing 4 short years ago and I hope/pray that we are able to get through our financial mess as well as you did. I clicked your Google ads 8)

  178. ReggieH says 03 January 2008 at 14:40

    Congratulations on ending your debt! Your site and posts are extremely informative and inspirational to me (‘expert’ or not!:) Seeing that you made it gives me hope that I can get ‘out from under’ as well. Have a great New Year!

  179. Alex Moore says 13 February 2008 at 02:10

    Hi John,

    This is a very inspirational post. Would you mind if we republished your two lists on our new list sharing and social recommendation site named snagsta.com? We will, of course, give you full credit for your content and provide lists back to your site.

  180. emmarose says 20 February 2008 at 14:56

    you are very inspiring. i owe exactly $35000.00 in graduate school debt so thank you for this post. i am going to pay it off in 3 years too and know i can do it. i don’t have a home or kids so i have no excuse. i need to stop wasting money on dumb sh*t. thank you! i’m going to start today!

  181. Allison says 08 April 2008 at 13:18

    I just discovered your blog last week and can’t get enough! Thanks for all the tips. I look forward to reading your blog for years to come.

  182. The Tinman says 22 April 2008 at 20:32

    I fell over this website whilst reading the latest Money magazine…congratulations on your achievements…this might have been said already, but the book that had the most profound impact on me was “The Millionaire Next Door”. Once you have cleared your debt, in my humble opinion, this is the next step…

  183. Mike says 30 April 2008 at 09:33

    Being consumer debt free feels fantastic. The most my CC balance owing was ever was a shade under $2,000.00 but even that was enough to make me feel like a failure, stressed, and depressed.

    I’m curious, J.D, instead of quitting your steady-income job soon after getting out of debt, why not carry on work at the factory for another year for example? You could’ve used that extra money per month (money otherwise spent on paying off debt) to pay down your mortgage even faster or just build a really good nest egg for your family. That’s what I would have done.
    That $200/month I used to pay to my CC bill, and that extra $300/month I used to pay towards my 2nd house (which has been sold) now feels like I’ve won the lottery with that extra $500/month in my account. I don’t want to give it up.

    Either way, thank you for this website and all the time you put into it and congrats on pursuing your dream while debt-free!

    Mike

  184. Chad says 30 April 2008 at 16:56

    So, in 4 years, you paid off $35000+ in debt, and yet you were living paycheck to paycheck just before that. I find that hard to believe, so why don’t you enlighten us? How much money over those 4 years would you say you freed up as a result of each strategy in your system?

  185. J.D. says 01 May 2008 at 00:11

    Chad, you may find it hard to believe, but it happened.

    I don’t have exact figures as to how much each component contributed to my turnaround (I never considered logging the information when I started), but searching this site can help put the pieces together.

    For example, looking at my article on spending plans, we can see that my debt service was $508/month as of October 2004. I don’t have exact numbers for my frivolous spending, but I know that I got rid of my landline (saving at least $40/month), cut cable from deluxe to basic (saving about $60/month), reduced my spending on books and comics and other crap. Also, I sold a lot of stuff and began to earn side income.

    All told, this yielded a positive cash flow of over $1,000/month once I’d eliminated my debt.

    My story is not unique. I get e-mail all the time from readers who have managed to similar things. They all basically say the same thing: attack debt, reduce spending, increase income. These are the three components of escaping the paycheck-to-paycheck lifestyle and massive debt. And time. Lots of time.

  186. mary says 16 May 2008 at 06:38

    I read this article when you first wrote it in December. I was so inspired! At that time we still had $11,500 in credit card debt. Using many of the same ideas in your article, in the past 28 months we have paid off the final $27,000 of our credit card debt. The final payment to chase went out this morning.
    We are a family of six – a one income family – I am home with our four children. Actually a one SMALL income family. We have managed this debt repayment on a take home pay of $3100/month. Amazing things can be accomplished when you focus and don’t give up.
    Thank you for your great website and especially for this inspiring article. It is articles like this that kept me going through the slow months of debt repay. I am grateful for your words.

  187. Tom C. says 22 May 2008 at 14:27

    Thanks for your inspiration. I am 48years old, with under 30,000 of income.
    My debt on credit cards is 20,000

    In the last six months I actually stuck away 2,000.00 into an ING account. Every time I had money in my hands I put it in ING.
    Every time I got any extra income, same thing.
    Any time I had a balance in my checking account, I put it in ING.

    I’m trying man, I’m trying…
    I think I’m getting ready to take out the ING money and pay my smallest credit card.

    Thanks for your inspiration.

  188. LaShaun says 28 May 2008 at 22:03

    Just a note to say great job. And congrats.

    I was debt free after selling our house back in 06. Was able to pay off EVERYTHING. including both cars we owned. Now Im 30 and have over $30,000 in debt in the matter of not even 2 years. We don’t own a house now so we cant just sell and do it again. Now we really have to work our tails off.

    Im glad to have stumbled upon your article. Thank you.

  189. CJ says 14 June 2008 at 13:57

    JD,

    Congrats buddy! I completely admire your diligence, patience, and persitent in building wealth. You totally inspired me. Thanks for sharing.

    Moreover, I found your website in Money Magazine. How did you get Money Magazine to advertise your article?

    CJ

  190. Jaime says 04 July 2008 at 19:33

    Wow, great story and well done! I am launching a business publication aimed at the younger generation and wondering if we can reprint the above article to inspire some hope in the very in-debt Gen Y that we target with the publication?

  191. Broke Newly Wed says 17 July 2008 at 05:53

    I recently turned 30. I got married last month. I am in debt to the tune of $97,000. That’s $17,000 still in college loans, $13,000 in a car loan, and the other $67,000 is credit card debt. My story seems very similar to yours, only with higher numbers unfortunately. After reading your story I am very inspired to make some major changes to pay off this debt.

  192. Mick says 17 July 2008 at 06:09

    Congratulations, great stuff! Good energy with being a full-time writer (the only way really to do anything you care about, I’ve found from being a moonlighting actor).
    Cheers, Mick

  193. Keyah says 17 July 2008 at 07:52

    Thanks for teh insightful information and for being so transparent! I appreciate it. You have encouraged me to know that I can move towards financial freedom in my life!

  194. Sette says 17 July 2008 at 08:57

    Thank you for the motivation…I am aiming towards the same goal!!!

  195. Yo says 17 July 2008 at 10:28

    You sir, are an inspiration.
    Thanks for the tips.

  196. Ash says 17 July 2008 at 12:10

    Congrats and thank you for sharing your experience. I am 25 years and feel I am drowning in debt. I have $20,000 worth of credit card debt and $10,000.00 worth of student loans. I have simplified my life a lot and cut down on a lot of expenses. I have started to sell stuff online as well. Reading your article give me hope that it is possible to get out of the hole, one step at a time. Thank you…thank you ..thank you..

  197. Betty says 17 July 2008 at 23:35

    Great article! You mentioned Christmas shopping so I have a money saving tip about that. I do most of my shopping for relatives after Christmas when there are 75% off sales in January. I always hit JcPenney’s (my favorite for bargains) and other big department stores and pick up my relatives designer brand clothes, perfume, whatnots, etc. at a fraction of the price. I then take my purchases home and neatly put them in one of those large plastic storage containers. At Christmas time the next year, the gifts are in perfect condition. My relatives are always amazed at their gifts and say over and over that we shouldn’t have spent so much.

    Not only do I escape the mad Christmas shopping season this way and am able to enjoy the holidays with my family, but I also save a lot of money and get some real steals. One year I got my MIL a fancy music box at JcPenney’s for under $25.00–the original price over $250.00. This year, I picked her up a gorgeous gilted angel for under $10.00–original price $50.00. Plus, I got her a couple of designer sweaters for under $10.00 each.

    I’m completely finished with shopping for extended family for the 2008 Christmas season, and I spent less than $200.00.

    Now, the only rub to this plan could be when a relative wants to return something–of course they can’t. But this has only happened to me once in all of the years I’ve been doing this. The solution to that is to simply have some cash on hand and tell the relative that you’ll return the gift and offer them a reasonable amount of cash for the item. Then you can possibly give the gift to someone else.

  198. Sean Reynolds says 18 July 2008 at 14:19

    Well done! The best has yet to come!

  199. chris says 04 August 2008 at 19:37

    this is my story

  200. karla says 06 August 2008 at 10:00

    awesome, congrats! I’m 21 and I am going on my third year to college, and have been working my way through it. I have no debt, and I’ve been saving the past year. Im going into chemical engineering, and this will be my last semester working, since the spring semester will be too intense to work as well. I’ve accumulated about 10K in savings by giving myself a $200 allowance every two weeks and saving everything else. I feel scared about not working, since I have been since 17, but I know I need to so I can graduate soon.
    Karla

  201. SCGirl says 07 September 2008 at 14:09

    Congrats 🙂
    I’m so happy for you, and your story is inspiring.

  202. dustin bell says 18 September 2008 at 09:12

    Hello, good for everyone, i’ve been debt free for 2 years now,I turned a 25 year mortgage into a 9 year affair, you need to sacrifice and realize what your goals are, I wanted to pay off my mortgage, so every year I would put an extra 15k on it in cash and before you know it it’s over, i saved 80,000.00 bucks in interest, yes I did, so I celebrated and bought a bmw z4 convertible, used of course, I don’t buy new cars anymore, no value there at all, buy a car minimum 2 years old and you’ll save at least 40% from the new price, so what if it has some mileage on it, get it checked out make sure it was not abused and buy it, my bmw still had the full warranty for 2 years, I drove from montreal to california this past summer with it. I also bought a used audi a4 quattro for the winter, again used this time 6 years old, but it runs great, who can tell that i did not buy the car new, who cares, except the bottom line of my finances. I wanted to buy a country house for the weekends, for 200k put 20k down, called my mum, she said ‘don’t do it now, everything is upside down in the world, wait for a deal withing the next year when people are desperate and need to unload there second house.’ mum know best so i’ll wait, enjoy being debt free it is a great feeling, however i see the country as an investment to retire in then i would sell the house i live in now and use the cash for my retirement. so that is my experience with cash.

    Dustin

  203. rastaman81 says 23 October 2008 at 02:56

    Victory! You’ve won the war man. Now is the time you feel the jah of life. MAy the good times roll forever for you. .” Get up, stand up. Stand up for your right. GEt up, stand up, don’t give up the fight. . .”

  204. La BellaDonna says 05 January 2009 at 13:30

    A day late and a dollar short … I was so pleased to read this.

    J.D., I just want to let you know that for me at least, this was the first blog that made me think that financial information was accessible to me. I had already made some decisions about how I wanted to change – and improve – my financial situation, but coming here, and reading your stories, and the stories of other people, some of whom are NOT financial geniuses, has been incredibly encouraging. Just believing that it’s POSSIBLE is a tremendous psychological boost. And knowing that there isn’t ONE right way to debt management or debt freedom is also helpful. There are plenty of professional financial writers out there, and I certainly want to learn more (it would be hard for me to learn less), but few of them are as accessible as you. Wherever else I go, I will ALWAYS start and end here – this blog feels like my financial education “home”. In addition to congratulations, I want to say Thank You – I hope at the end of 2009 to be able to say that I, too, am consumer debt-free – and it will be due in part to the encouragement I receive reading Get Rich Slowly.

  205. RyansDad says 20 February 2009 at 14:25

    Congragulations! I am trying to work Dave’s plan too and I definitely would love to be in your position. I just started a blog too-www.moneylifedebt.blogspot.com

  206. Michael says 23 February 2009 at 05:13

    To all of you drowning in student loan debt: If you enlist in the US Army they will pay up to $65,000 in student loans and you still qualify for the new GI Bill. That’s worth the same amount or more depending on what school you attend. You could even qualify for a bonus depending on your job. Not to mention your medical/dental benefits being fully paid. Sometimes you have to make sacrifices and this one would be good for you and your country.

  207. Young Cash Cow says 27 March 2009 at 14:10

    JD, have you considered any credit cards that yield higher than 1%? There are quite a few out there, and as long as you’ve “mastered” them as you say – you won’t have to worry about their sky high interest rates. I earned $500 last year using my Chase Freedom (3% back where you spend the most) exclusively, and I’m considering using a combo strategy to maximize my profits by using the Chase Freedom and Fidelity’s new Retirement Rewards card that offers 2% back on everything. I blogged about that strategy in my most recent post – check it out!

  208. Treje says 01 September 2010 at 18:37

    Just noticed your comment about a max contribution on a Roth IRA. If you’re self-employed now, why don’t you do a SEP account or SIMPLE, and that way, you can set aside a bigger amount?

  209. Olivia Miller says 09 January 2013 at 11:24

    This blog was inspiring! It takes a lot of self control to save money and not go crazy!

  210. Michael says 23 June 2013 at 20:14

    Non-mortgage debt and mortgage debt are not mutually exclusive. You still have a mortgage (well at least when this was published, and I’m sure you still do) therefore you are still in debt. You are not debt-free.

  211. http://www.howtobecomedebtfreetips.com says 24 April 2014 at 19:15

    I ended the year with a tight-knit group of
    friends with similar goals and with the realization that the Army may not be what I expected.
    Once we find a coupon and pick a day to go, we really look forward to the experience.
    Sell that car that you are paying $500 dollars a month on.

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