February 21, 2007
My Heroes
Now that I've gotten a better grasp on how interest is working on my loans and have come to the cold hard reality I owe *gulp* more, I find mucho hope & motivation in the following article:
Huge debts, paid off fast A $150,000 mortgage erased in five years. About $49,000 in credit cards, almost gone in just a year. These debt-payoff champions share their secrets.Greg Cards of Newark, Del., was saddled with $154,000 in debt after his divorce.
Cards is on track to own his home free and clear later this year.
Wanda Wilkinson of Santa Fe, N.M., had $49,000 in credit card bills, a daughter in college and a husband facing a potential layoff.
Wilkinson eliminated half of her debt in a year.
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.
(Cards, for example, volunteered for overtime and took a second job. Wilkinson, 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.
He's done this on a base salary of $60,000 by volunteering for overtime, picking up a second job and trimming expenses wherever possible. To keep his living costs down, Cards:
[source]
- Opts for basic TV service -- no premium channels.
- Chooses a dial-up Internet connection ($9.95 a month) over high-speed service.
- Buys food in bulk to last for months.
- Takes his lunch to work.
- Makes a budget for the holidays, birthdays, etc., and sticks to it.
- Applies "extra" paychecks to debt (a biweekly pay schedule had provided a third check two months a year).
- Applies any bonuses toward his debt.
- Sets the thermostat in winter to 63 degrees.
- Sets the air conditioner to 79.
- Buys compact fluorescent light bulbs to reduce electric bills.
- Takes out $25 in "walking around" cash each week. When it's gone, he doesn't spend more.
- Keeps the credit cards at home.
- Shops with a list and buys only what's on the list, and avoids looking at anything else, including sale items.
- Keeps his car tuned up to avoid bigger expenses.
- Doesn't keep up with the Joneses. He says he doesn't care what they drive, where they vacation or what they wear.
- Avoids buying coffee or food "on the go" but instead eats at home whenever possible.
- Stays away from vending machines at work.
- Doesn't play the lottery.
- Buys broken bags of mulch and fertilizer at deep discounts.
- When shopping for appliances, buys last year's model.
- Budgets vacations and looks for coupons wherever possible.
I'm happy to see that I'm already doing some of the things Card is doing. What really gives me hope is most of these people are making it happen on a regular old salary.
11:31 AM in Motivation
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