I paid off $70,000 in debt and quit my job!

In 2005, I was working more than 60 hours a week in a position that required me to travel around the U.S. I made great money, but I hated my job.

My husband and I wanted to start a family, and I knew that I couldn't work so many hours with a baby. My goal was to work part-time. The problem was we had over $70,000 in debt, and I made over two-thirds of the income.

I felt like I was at the bottom of Mount Everest looking up, but I knew I could only take it one step at a time. I was focusing on the top of the mountain when I really should have been looking at the start of the trail.

First Steps

I started to read everything about personal finance and getting rid of debt. I found Get Rich Slowly and The Simple Dollar. I read Suze Orman and Dave Ramsey.

We decided to start Dave Ramsey's Total Money Makeover in January 2006. At the time, our debt looked like this:

  • Honda Civic $19,300
  • Student Loan 1 $3,400
  • Student Loan 2 $22,780
  • Home Equity Loan $24,560

We'd just bought a brand new Honda Civic two months before. It was almost one-third of our debt, and I loved it. I had images of taking a new little baby home in it. It was going to be the family car. But we finally had to ask, “What's more important: Driving in our awesome family car to work every day, or having a clunker in the driveway while I stay home?”

I had heard that the second you drive a car off the lot it loses value. I was really scared to find out how much our Civic had depreciated. It turned out we only lost $1,000 on a trade in!

Having the guts to make such a hard decision really jump-started our journey. It pushed us to become stronger and work harder.

Our Plan

In March 2006, I learned that I was pregnant. The clock was now ticking!

Our next steps were to get on a budget and to sell everything we could. We realized two things in the process: We didn't have a clue how much we spent, and we had no idea how much Stuff we had.

After a few months of selling things and reworking the budget, we hit our stride. We started working side jobs, and I started traveling more to earn the on-site bonuses my work provided.

My husband has a very sporadic income as a performing artist. He started doing website design and graphic design to make extra money. He took any job that he could and was working literally day and night on extra projects.

He worked like a dog for those months and dealt with a very pregnant wife, so I commend him at what a great job he did!

A Safety Net

A few months before our son was born, we realized that if we put all of our money towards debt, and we had issues with the pregnancy or the birth, we wouldn't have any money to pay for the care. Instead of tackling the final debt, we decided to build up our emergency fund.

When Finley was born, we had one $23,000 debt and $23,000 in the bank. The birth didn't have any complications, but I had come to rely on having money in the bank. I couldn't fathom paying off that last debt, because I'd be quitting my job without any savings in the bank.

After careful thought, we decided to keep the emergency fund. I ended up going back to work after maternity leave, and we continued to push really hard. Less than three months after going back to work, we had enough money to pay off the final debt. We were finally debt free!

Quitting My Job

In April of 2007, I quit my job. It was one of the best days of my life knowing that we accomplished our goal, and I could be home with my son. Now I've even found a career that I'm extremely passionate about. I work part-time as a personal and business coach, and I wake up each morning so excited to start my day.

At my blog, Eventual Millionaire, my motto is: Life is about more than money. First, you have to find the life you want, and then you can make your million. That's why I call myself an “eventual” millionaire. But I feel rich already.

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Sam
Sam
10 years ago

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

Doug Warshauer
Doug Warshauer
10 years ago

Great story Jaime, it’s an inspiration!

Jaime @ Eventual Millionaire
Jaime @ Eventual Millionaire
10 years ago

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

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

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

Chris
Chris
10 years ago

I enjoyed the narrative. Keep it up, both writing and taking control of financial issues. Thanks.

Beth
Beth
10 years ago

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

Julie
Julie
10 years ago

Congratulations to you, your husband, and Finley! People can do amazing things with focus, determination, and hard work. Enjoy the fruits of your labor!

Jaime @ Eventual Millionaire
Jaime @ Eventual Millionaire
10 years ago

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

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

Devi S
Devi S
10 years ago

Thank you so much for sharing your dreams and the steps you took to achieve this. It is very brave of you to quit your job for an even better job; being a full time mother and still able to have your own business on the side. Congratulations!

Rachel211
Rachel211
10 years ago

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

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

Nicole
Nicole
10 years ago

What do you do about health insurance now that you’re both freelance?

Mary
Mary
10 years ago

Great, you got out of debt. But you hurt your earning power for the rest of your adult life, and made it next to impossible to recover your chances of ever making it back to the same track you were on before. Granted, working 60 hours a week with a baby is ridiculous, but I can’t get past the idea that you quit a high paying job and left the career you presumably spent the better part of a decade training for to chase some pipe dream about domestic bliss. I hope you have a financial plan in place if… Read more »

Michele
Michele
10 years ago

Congratulations, Jaime. I have downloaded several Suze iTunes episodes and keep them running on Saturdays when I might otherwise be out spending money. It’s helped me remember my focus.

I wholeheartedly agree on the importance of first finding the life you want.

Thanks to J.D. for this site, too. Google Reader delivers GRS to me daily and every day I am one step closer to financial independence.

Longtime reader; first time poster.

Rachel211
Rachel211
10 years ago

FYI – I did browse her blog some and found her original post on the subject that went into more detail about the stuff they sold and how they found extra money. Or how in those last few months they had things like tax returns to put towards the last $23k. http://www.eventualmillionaire.com/blog/2010/04/how-i-paid-off-over-70000-in-debt-and-quit-my-job/ I think that it was still a lot of debt to be able to actually get through in that short of an amount of time – but it is sometimes good to see that even if you have lots of money to work with, anyone can still fall… Read more »

Trina
Trina
10 years ago

Jaime; Thanks so much for sharing your inspirational story. I am also in the position where I am a mom and make twice as much as my partner. I also found my work very stressful and felt like I was trading my life and time with my daughter for a big paycheck. About two months ago now I quit my job without having another one, which was really, really scary. I am currently working full-time as a consultant, and I am hoping to find a way to work part-time. We recently found out that our house is worth about $70,000… Read more »

Christine
Christine
10 years ago

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

The Tim
The Tim
10 years ago

Awesome and inspiring story.

If only everyone would get in gear, get out and stay out of debt, and shape up their financial life like this. We probably wouldn’t be in this economic mess if most people were as debt-averse as the readers and writers of this site.

Money Smarts Blog
Money Smarts Blog
10 years ago

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

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

Mike

AC
AC
10 years ago

She is right on in saying that you must focus on your needs and desires before you earn your millions. If you deny your needs you are just a miser sitting on a mountain of cash.

Kelsey
Kelsey
10 years ago

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

Cortney
Cortney
10 years ago

Mary-

She specifically stated that while she was making good money, she was working 60 hours a week and, direct quote “I hated my job”.

You may disagree with her choice to quit her job, but your disagreement seems to be rooted in your own beliefs about stay at home mothers and marriage, because your assessment of her choice had little to do with the motivations for her choice as she has shared them with us.

Avistew
Avistew
10 years ago

This is a great story. Congratulations for having the guts to get rid of the car! Most people wouldn’t even consider it. I think keeping an emergency fund was also a very smart thing to do, as it made you feel safer. Number-wise, you may have lost some money in the interest, but you had peace of mind, and that’s very important. I’m glad you’re doing okay and can spend time with your son AND found a career you really enjoy! And kudos to your husband for supporting you financially and emotionally during your pregnancy, it sounds like he gave… Read more »

lynn
lynn
10 years ago

Congrats on being debt-free. However, I am skeptical of the sustainability of the choices. I wondered immediately why the person making 2/3 of the income, with bonus potential and presumably employer-subsidized insurance and 401k, would quit the job, rather than the one making 1/3 as a freelancer. I looked at your blog, and the front page states, “My husband and I have a sporadic income since we are both self employed.” Your budget breakdown lists no retirement or additional emergency fund savings, etc. Maybe I am missing something, but the budget does not seem to prepare for future goals, but… Read more »

Ana
Ana
10 years ago

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

Ana
Ana
10 years ago

A huge pay off, I meant to say!

Ann
Ann
10 years ago

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

Ann
Ann
10 years ago

Guess my first comment is stuck in the spam filter:

@Lynn (#22): The poster’s math is off. According to her blog, her household income was $130k and her share was $100k. She actually brought in a little over 3/4 of the prior household income. If she has problems with something as simple as division…

Jaime @ Eventual Millionaire
Jaime @ Eventual Millionaire
10 years ago

@Rachel211 We made about $130k per year. I made $100k. My husband has a sporadic income, and those months were the best. It was three months after going back to work, I stayed home with my son for three months though, so it was about 6 months time. (My son was 5 and a half months when I quit) @Trina Congrats! It’s all about trading. I remember thinking living in a much smaller house would be so worth it to have the life I wanted. Turns out I didn’t have to live in a smaller house either! Things seemed to… Read more »

Nicole
Nicole
10 years ago

Wow… the comments are a bit harsh. Please be nice! Though I suppose you could leave comments on her own blog where she has the moderation power instead of J.D. I’ve done a spin through the blog. I’d still like to get more detail on the health insurance– the latest budget on the blog says they’ve changed health insurance, but I’d like more info on that. I wonder if living in Maine they’re able to take advantage of the huge increase in MA independent plans or if those are still cut off by state borders. Nobody should have to work… Read more »

Jaime @ Eventual Millionaire
Jaime @ Eventual Millionaire
10 years ago

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

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

Jaime @ Eventual Millionaire
Jaime @ Eventual Millionaire
10 years ago

@Nicole We have a high deductible plan now. It’s about $406 a month. Doesn’t cover much but we have an HSA that helps.

@Mary I understand your point. Though in my situation I got that job right out of college. I traveled around the US so to me it wasn’t an option to keep it once I had a baby.

Right now I’m a business coach, work part time, make great money and love it.

Jaime @ Eventual Millionaire
Jaime @ Eventual Millionaire
10 years ago

@Lynn You’re right. I could be so much better off monetarily if I stayed put. My husband loved his job, and had potential to make a lot more. Plus I wanted to be home more. In the comments on my post you will see that we do put away for retirement. It’s usually taken out after the busy season when we can verify we are all set for the winter. I am a planner, so I try to always be prepared. We have a six month emergency fund, plus a huge HSA for medical emergencies. We do the best we… Read more »

Jaime @ Eventual Millionaire
Jaime @ Eventual Millionaire
10 years ago

@Ann That’s why I put over two-thirds. Being self employed the $130k is our net. Our gross was about two thirds.

Jaime @ Eventual Millionaire
Jaime @ Eventual Millionaire
10 years ago

@Nicole We are stuck within Maine borders on the health insurance. I wish we had more options!

I started out as a stay at home mom. I realized that I really did like working, it was just that job that I didn’t like.

I feel like I have the best of both worlds now.

Carrie
Carrie
10 years ago

I think this is a great story, as it demonstrates how discipline can make the seemingly impossible, possible. I am curious about the poster’s decision to pay off the last $23k in student debt. When I crunched the numbers on our total student loan debt, it actually made more sense to live with the largest chunk of debt. The reasons were that the interest rate on that loan is under 1% and we are earning 5+%, untaxed, on the money we have invested. (These are our cash savings conservatively invested in tax-free bond funds – not retirement monies.) As nice… Read more »

DreamChaser57
DreamChaser57
10 years ago

I sincerely hope the dialogue on GRS does not devolve like it has on the MSN Money boards, the majority of the readers there seem to be neurotic and anal. They laugh at the ideas of others, argue intensely over minutiae, and debate endlessly about something relatively incidental to the original post. Poster #25 ‘s comments just seem spiteful, hateful, and unnecessary. Not to single that poster out, but we all, including myself, have a tendency to judge other people’s lives by the measuring stick of our own sensibilities and idiosyncrasies which inherently undermines someone else’s autonomy and sense of… Read more »

Kevin
Kevin
10 years ago

Count me among those who were confused about why they decided that the one making all the money would be the one to stay home with the kid, rather than the one who was already hardly bringing in any income. Seems like they’ve severely handicapped themselves financially.

nyxmoxie
nyxmoxie
10 years ago

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

nyxmoxie
nyxmoxie
10 years ago

Kevin: Not necessarily, I’m sure that now Jaime and her hubby are being careful with their money. Its easy to live on less if you know what’s important to you. Not everyone wants diamond rings, yachts, and mink coats. Some people like Jaime just want the freedom to be their for their kids, to spend more time with family, to not have a job that they hate to go to. Its much better to make less and have peace of mind than to make more, be stressed and loathe your job. I actually believe you can live well on less… Read more »

J.D. Roth
J.D. Roth
10 years ago

I want to highlight Dreamchaser’s comment: I sincerely hope the dialogue on GRS does not devolve like it has on the MSN Money boards, the majority of the readers there seem to be neurotic and anal. They laugh at the ideas of others, argue intensely over minutiae, and debate endlessly about something relatively incidental to the original post. There’s a reason that the GRS community is highly regarded, and it’s because it does not stoop to the same level as other sites on the internet. There’s a high level of discourse here. It’s fine to point out mistakes and flaws,… Read more »

Jaime @ Eventual Millionaire
Jaime @ Eventual Millionaire
10 years ago

@Carrie I thought about this one a lot too. It was a really hard decision to pay off the student loans. The numbers don’t lie and it would have made fiscal sense to keep it. Especially because if I died the debts would be gone!

In the end we did it because we wanted to be debt free. I didn’t want ANYTHING hanging over my head. Which is also why I want to pay off the mortgage even though it’s at 4.75% 🙂

Jaime @ Eventual Millionaire
Jaime @ Eventual Millionaire
10 years ago

@DreamChaser57 Thank you!

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

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

Nicole
Nicole
10 years ago

How did you find the health insurance? How does it compare to what you had before? That itself is really interesting. I know a lot of people in their 30s who feel job-locked… one spouse has to keep the regular job so they can keep group coverage.

Rachel211
Rachel211
10 years ago

I don’t really think that most of the ‘negative’ posts on here are trying to be mean. The more I thought about this story over the day, I think that most people just couldn’t relate to such a large amount of money that was paid off in such a short time. The grand total was at $70k and then getting rid of the car was a great move bringing it down to $52k immediately. But then there is a lot of talk about being pregnant – so at first I was thinking in a 9 or 12 month time frame.… Read more »

a reader
a reader
8 years ago
Reply to  Rachel211

I can relate to paying off a large (ca. 6 figure amount) of debt in a relatively short period of time – it can be done, depending on income, assets that one might sell, and savings one might apply to the debt. The author and her husband did a great job!

AC
AC
10 years ago

@ those who don’t understand why the husband who made much less didn’t stay home:

You are missing the point. Jaime hated her job. Having a kid was only part of the answer for her if not just the motivation for going through the process of turning her life around and into something productive and happy. Leave her husband alone. He sounds really supportive and his contributions are and should be more than financial. That goes for all relationships.

lynn
lynn
10 years ago

Re: Dream’s comment: Maybe I missed it, but I didn’t read anyone stating she was lazy or unambitious. In fact, for me it was the opposite- she had worked very hard for a well-paying career. That was impressive. The surprise for me of the post was that the debt was paid off, so Jaime quit her job. For me, paying off the debt is a first step. After that, the financial house starts getting built. I am all for moderation in work hours and parents spending more time with kids. My husband and I are at a very similar point,… Read more »

Financial Samurai
Financial Samurai
10 years ago

Good stuff! Go Jaime, my fellow Yakezie member. Living the dream indeed.

Good on your husband for being a good team player as well.

Best,

Sam

Nancy
Nancy
10 years ago

Thank you for your story. Enjoy your time with your little one. Those years are so precious and fleeting, and you will never look back on this time down the road and wish you had worked a zillion hours a week instead.

DreamChaser57
DreamChaser57
10 years ago

@ JD – Thanks for the highlight, it made me feel warm and fuzzy inside (LOL) – It is such a dreary day outside in my neck of the woods and I’ve been studying my eyeballs out since the early morning hours, GRS is a welcome reprieve. I saw a couple of typos in the comment, but I’m confident that my gist got across @ Jamie (Poster #40) – I have boatloads of student loans, equaling six figures, grad school is not cheap, I agree with your sentiments, paying the loans off is a priority for my household, I want… Read more »

Ann
Ann
10 years ago

@DreamChaser57 (#35) – What mean thing did I state about the poster? I pointed out that her math was off and that makes other things questionable. It is premature to extrapolate those figures and make unwarranted assumptions about her household’s fiscal behavior. Frankly, I thought these reader story posts are supposed to stand-alone. There should be enough details for readers to get a good picture of the situation, not just vague comments about managing to pay off debt and quit the day job. I didn’t realize I would have to read the poster’s own blog and follow it for a… Read more »

Karen in minnesota
Karen in minnesota
10 years ago

Kudos to the poster for realizing that the new car was preventing her from accomplishing her goals! But as a middle-aged divorced mom, I agree with Mary posting above. I am worried and always caution young mothers like the poster to be more careful about so casually destroying their future earning potential. I myself have an intense, time-consuming professional career and when my kids (twins!) were small it became really hard to work too so I considered bailing on the career and staying home. It’s fortunate that I didn’t, because my husband dumped me a few years later for his… Read more »

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