Michelle’s Story: I’m on my way to being Debt-Free in 2010!
Posted by John | Filed under How I'm Doing
I was a contract employee for 5 years, enjoying the extra cash to its fullest, never a care to how much something cost or how much debt I was accruing regularly. It was getting paid off , albeit added to on a monthly basis as well, but hey, I deserved to live a little as did my family right? My kids were well taken care of, as were my husband and I, so life was good.
Fast forward to this year and the huge smack in the face that my contract was coming to a close and I was over $60K in personal debt (not including my husband’s debt). We’ve always had separate bank accounts, separate credit cards, and managed the household bills separately. His income was for the mortgage and property taxes, mine was for household bills, daycare, children’s clothing/recreation activities, vacations, vehicle, insurance, and everything else that falls under the sun!
I sat down in January with a plan to get rid of this debt as fast and furious as I could. Although I had a plan, it took me until March 1st to become serious about it. I’m proud to say that from March 1st to September 1st I’ve successfully paid off $30K in debt!
I’m an employee now making a regular salary every 2 weeks, that’s half of what I used to make as a contractor. I was ready to leave the uncertainty to sleep at night, and once I revised my budget to account for half the income I used to make a few short months ago, I was astounded (and a little ashamed) at how much money went towards STUFF! Not even the Gail kinda stuff that you can see or touch (think shoes, purses, designer duds), but just, well, consumed STUFF! Admittedly a lot of that old stuff was alcohol and dining out. Now we have 2 bottles of wine a week and that is it.
The ordering out is still a weekly or bi-weekly thing, because it’s part of our family relaxation time. But it’s no longer pizza from the $60 place, but from the $30 store instead. No more eating out at $150 restaurants either, and we don’t seem to be suffering from the drop in income at all. Quite the opposite has happened: Now that I know exactly how much is coming in, I finally made a budget that I have to stick to and take from the new entertainment and clothing/gift accounts what the money was set aside for in the first place.
I am happy to say that by December I’ll have $1000 in gift/clothing/entertainment money saved that can go towards a nice Christmas with good food and entertaining of our families. No longer is there the panic of whether as a contractor I have to work an extra X hours to make Y dollars to pay for Z gifts and holiday eating.
My debt payments were finished for a large consolidation loan 3 months earlier than expected, I’ve paid off 2 credit cards (and make regular grocery and gas payments to them now to keep them at $0), and in October I’ll have another credit card paid off 5 months earlier than previously expected. My son’s braces will be paid off in February, and my student loan will be paid 3 years early by June 2010!
I still have a $14K credit card (ouch, but absolutely nothing gets added to it as I make regular payments plus all the extra cash I can if any is leftover some pay days from my budget) and a $7K vehicle loan which are my debts, but they’ll be doubled up in payments once the other debts are completed. I decided to use the “Snowball” technique as I like seeing the word “DONE!!!” next to debtors on my spreadsheet. I also have my share of the Line of Credit with is at about $10K, but my husband is paying that down frantically since I’m an employee with a ‘fixed’ income and ‘fixed’ expenses now, so he’s technically paying that down for me faster than I am able to.
I cannot wait to finally be 100% debt-free and show my husband where I was and where I am PLUS show him my savings and RRSP accounts! I know that I should(‘ve) let him know where I am, but I feel much more comfortable doing this on my own and I feel a great sense of pride and accomplishment every time I look at my budget sheets knowing I’m doing this on my own without adding stress to his life or mine. This is MY success story, and I am glad to share it with all of you! And in 2010, I’ll share it with my family too!
Thank you, Gail, for this fabulous site, for your wonderful show, and for being a columnist in Chatelaine so many years ago. I’ve followed you for a long time (a follower, not necessarily a practicer until this year though!), and your common sense approach to breaking things down to build up wealth and get rid of debt once and for all was just what I needed to take a hard look at my life and learn to appreciate the little things.
March 8, 2010 at 11:00 am
Great Job Michelle!! I too will be debt free this year; December of this year but 2010 none the less and I look forward to writing my own Success Story! I love Gail’s Blog and show and this site but I have to say, one of my favourite parts is the ‘Success Stories’ section because I love love love reading people’s individual stories in becoming debt free. I’m sure Gail loves reading them too. I watched the 10 Where Are They Now videos on slice.ca as well and I found myself sitting in silent anticipation hoping that the people had succeeded. I think it is one part wanting to see people succeed and do well for themselves and their families, one part wanting to see concrete proof that following the “rules” works! and one part just wanting to be encouraged and inspired to know that following the budget, saving the money and FINALLY paying off that debt is SO worth it.
Congratulations again and keep up the good work!!
March 9, 2010 at 10:27 am
What a great story! Thank you so much for sharing, I love to hear all these success stories. You should be very proud of all the hard work; kudos to you and your husband!
March 9, 2010 at 11:14 am
Congrats, what an amazing accomplishment! Hard work really does pay off!
March 11, 2010 at 12:15 pm
Congrats on your success!
March 11, 2010 at 12:36 pm
Thanks all! It feels amazing to take control over the debt, stop adding to it, and watch the numbers reduce every month. I did have a hiccup recently after completing my taxes, thanks to being overzealous the middle of last year and getting that initial $30K paid down. I overpaid myself and underestimated my taxes so I had to reduce the debt repayment money to cover off a big tax bill, but that’s okay. I didn’t have to ‘borrow’ to do it, just a readjustment that has added about 4-5 more months to my original debt-free date, but not a catastrophe!
I’m still doing it, albeit smaller steps than before, but every month there’s another reduction in debt, increase in RRSPs and savings, and life is getting balanced out now, one pay cheque at a time.
Good luck to all of you on the same journey or helping others who are doing it too.
March 11, 2010 at 1:07 pm
Great job Michelle. Don’t let that blip in the road to debt-free cause you to stumble. You are doing great! And if it takes you an extra 4 months to achieve Debt-Free Forever, that’s okay! Thanks for sharing your story. You are an inspiration to us all!
April 2, 2010 at 1:15 am
great job, michelle! i too will settle my credit card’s debt by end of this year. u r such an inspiration for me to focus on my goal. thanks a lot
July 4, 2010 at 9:11 pm
Again! Great pics–gonna be a great listening week!!