Thursday, December 17, 2015

How I Eliminated A Sizeable Chunk Of Debt In 2015

At the beginning of 2015 I had set some fairly lofty goals for myself.

Number one was to eliminate a fair amount of debt acquired when I opened my business, subsequently closed it after acquiring a large medical debt and then undertook a big move to Arizona in hopes of improving my health and circumstances.  When the move fell through there were some added expenses involved in that as well as we changed gears once again.

Fortunately the grand total on that debt was not insurmountable.  However, I wanted to eliminate it from my life.  Sooner, rather than later.  I came up with a plan of attack and got right to work immediately, cutting expenses and adhering to the plan.  And it worked!

Every month I put an allotted amount of money toward paying down debt - one medical, one personal and two business related.  I began by selecting one to pay off in full and then paid just a few dollars more than the minimum payment required on the remainder.  I chose the smallest of the three which was my medical debt.

After applying two months of budgeted payments in January and February I used money from my income tax refund to pay off the balance.  One debt down and two to go!

Before doing this you want to do the math.  Make sure any fees are less
than what you otherwise would pay in interest and make sure you can pay
it off in full before the offer ends to avoid interest.

I went to work next on my second smallest debt which was my personal debt.  I used a 0% interest balance transfer to move 80% to another account.  I paid off the remaining 20% with more money from my tax refund.  Then I began applying large payments every month until the amount was paid off in full in August.

Next I selected one of my two business debts.  They were both for the same amount so I just picked one.  Once again I transferred a fair amount of the debt to a 0% interest credit card offer.  I made payments a few dollars above the minimum required on that account until I paid off the remaining balance in December.  

One thing I have learned is that you always want to pay more than the minimum required payment no matter what.  It reflects much better on one's credit report if you do.

Use debt reduction calculators to assist you in figuring out
 whether this is a good option for you and to develop a budgeted payback plan.

My plan going forward is to pay off the 0% percent interest account off in full before it expires in August 2016.  

In one year's time I was able to eliminate my personal and medical debts and almost half of my business debts which was far more than I had originally anticipated.  The two 0% interest transfers made a huge difference with my progress too, as all of those payments went directly to the principal amounts.  Not only can those offers allow you to acquire the things you need but also get rid of the things you don't, like debt.

I know by sharing this with you I am really putting myself out there.  But the reason I decided to write this post is to give hope to anyone who is feeling a bit overwhelmed with their financial situation.  Debt can always be dealt with and you mustn't ever give up hope.  Once you get started and begin to see progress you'll be further inspired to stick with it and conquer that debt.  Nothing feels better than to make that final payment.


  1. Thanks for sharing. We were left with $70,000 in medical debt about 10 years ago after a nasty bout with cancer. We used the same approach and in 4 years we paid it all off. Gave us real incentive to save even more in future years for the unexpected which seems to happen more than anyone would like.

    1. I think it really helps to do this when you have a sizeable chunk like that because you can make significant progress and it doesn't feel hopeless. You did great getting it all taken care of in 4 years. Here's to our good health. :)

  2. So happy for you.. We paid our house off a few years back by doing this.. We wanted it paid off before hubby retired, and with regular payments, we would never be able to get it paid off. Putting aside a little at a time, really adds up..
    COngrats to you..

    1. Thank you. I've actually toyed with the idea of doing this with my mortgage as well.

  3. I wouldn't advise paying off a mortgage early until all of your debt is paid off, you have 6 months of income saved for an emergency fund, you have a substantial retirement savings in place and you are contributing 15% towards your retirement.

  4. Great job, that's a huge accomplishment! I'm working on paying off my only credit card debt which is almost done and started saving some for a future dream.

    I hope you and your girls have a Merry Christmas!


    1. Merry Christmas to you as well and good job Tania! Sure feels good doesn't it?

  5. Congrats! That is a great accomplishment & really inspiring!


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