Money Matters

Meet The Regular People Who Climbed Their Way Out Of Debt

Did you know that the average American is currently more than $47,000 in debt? That’s a lot of money, more than most people earn in a year. What’s worse, more than $2 trillion of debt is currently either 90 days overdue or delinquent.

These headline statistics hide a world of personal stories, all about how people battled to get out of debt and pick themselves up again. Some did it using a structured settlement loan, others with self-help books. Let’s take a look at some of their stories.

Carrie Smith, 28, $14,000 In Debt

Carrie Smith isn’t your average candidate for somebody who you’d expect to have a big debt hanging over them. She was a business accountant and somebody who was used to helping entrepreneurs manage their own finances, constantly giving advice on what they should and should not do. Unfortunately, Smith wound up getting a divorce, and as part of the settlement, found herself owing more than $14,000 of debt.

For a while, she thought that the debt would last a lifetime and imagined herself going gray with the debt still stifling her. But she started taking steps to deal with it. The first thing she did was to pay off her outstanding credit card debt, as this was the debt that carried the highest rate of interest. Next, she constructed a timeline using a free debt calculator tool, to work out how long it would take for her to pay off the rest of the money she owed, as well as how much she could afford. Then she began making sacrifices, cutting off her cable and giving up her regular salon visits. She also took an extra job as a freelance writer, making a little extra on the side. Within three years the debt was gone and Smith was back on her feet.

Kari Gordon, 30, $30,000 In Debt

Kari Gordon had embarked on a successful career at a New York non-profit in her twenties, after completing her Master’s degree. But after her studies, she had spent a lot of time in denial about what her education had cost. She recalls the time when she got her first bill through the letterbox and didn’t open it for weeks because she knew it would be for an amount she couldn’t afford to repay. At first, she only paid off the minimum amount that she could, around $350. But with each payment, she hated her loan more and more and wished that she had never wasted her time with a Master’s degree that had gotten her nowhere.

She then resolved to restructure her debt and use self-help books to help pay down her loans. One of the first things she did was make the whole process psychologically easier for herself by breaking her $30,000 of debt into smaller, more manageable chunks. Then she took extra jobs, like babysitting, doing online surveys, and like Smith, freelance writing. She also started cooking her own meals and not eating out so much, saving herself a fortune in the process. It took four years, but she managed to pay off her $30,000 debt.

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