When my accountant sends me an article, I pay close attention. Today he forwarded a piece from Liz Pulliam Weston, one of my favorite professional money commentators. In Huge Debts, Paid Off Fast Pulliam Weston writes about people who have overcome staggering debt through hard work and determination.
How did they do it? Among other things:
- They made debt payoff a priority, although most continued to save for retirement as well.
- They kept their basic living expenses as low as possible.
- They looked for creative ways to speed up their debt repayment, and some took extra work. ([One person], for example, volunteered for overtime and took a second job. [Another woman], a lawyer, moonlighted as a package loader on a FedEx loading dock.)
Your situation might be different from theirs in the details. But if you're facing a big debt hole, you might find their stories offer inspiration and ideas you can use.
Pulliam Weston writes about the Gordons, a young couple just out of college. By continuing to live like college students, they were able to pay off their $150,000 mortgage in five years with an annual income starting at $55,000. The couple owned their home outright before either of them had turned thirty. (This story reminds me of a similar tale of extreme personal finance I shared a few months ago.)
Joy Thompson had large debts and a modest income (about $32,000/year). Because she wanted to work part-time work in order to volunteer at her church, Thompson cut back on discretionary expenses. She focused on her goal so that the sacrifices she made seemed unimportant.
“It's focus. This is what I really want to do,” Thompson said. “I ask myself, ‘Do I want this cheeseburger or my dream?' I always pick my dream.”
Wanda Wilkinson and her family led an affluent lifestyle. But when her husband's job was in jeopardy and her daughter started college, the family's debt and expenses became overwhelming. Wilkinson claims she read Dave Ramsey's The Total Money Makeover (one of my favorite personal finance books) every day for a year.
The article includes several more anecdotes from people who went to extreme measures to eliminate debt. Some of the subjects are wealthy; some are not. All of the stories are inspirational, especially for someone who is working on a debt elimination program.
Paying off your debts can be a long slog. You pay and pay and pay, and nothing seems to happen. You're still in debt. I pay $350 on my home equity loan every month, for example, but the balance never seems to dwindle. (When, in fact, it's declining at a rate of $200/month.) The key is to stay focused. Remember that when the debt is gone, it's gone. But if you add more debt, you'll be carrying that weight even longer. Reading stories like these is an excellent reminder that you can escape the debt trap.
[MSN Money: Huge debts, paid off fast]