Be debt-free

“I can’t believe I’m even writing it, but for the first time since taking out my first debt (student loans back in 2015) I’m officially debt free. I studied for two years and ended up with about $30k in student loans. Luckily where I live, they’re 0% interest as long as you stay in the country until they’re paid off. But with low pay, high rent, and not knowing a thing about money, I slid into overdrafts and credit cards. My attitude was very much “future me can deal with this.” By the end of 2019 I’d had enough, read some finance books and managed to wipe about $10k of bad debt (overdrafts + credit cards). I still had the student loan, but for the first time I felt like I was on top of things. Then COVID hit. I lost my job, depression kicked in, and within 6 months I was back in $18k worth of bad debt. I ended up consolidating it into a personal loan and just paid the minimums. Fast forward to last year I met my current partner. They’re the total opposite of me when it comes to money. They save like crazy, and for the first time in my life I felt properly embarrassed about my finances. In November 2024 they finally sat me down, we went through everything, and made a plan. I used a mix of avalanche + snowball methods, cut back hard, and stuck to it. And now, 9 months later I’m debt free. Paid off nearly $21k, saved $6k, and I’m on my way with an emergency fund. All credit cards, overdrafts, and personal loans are closed for good. The weight off my shoulders is unreal. For the first time in years, my pay actually feels like mine. I feel free.”

“As long-term Billfold readers know, I’ve been putting 20 percent of my pre-tax freelance income towards debt repayment since April 2015. It took me 19 months to pay off something like $17,000 in debt, give or take, and I had a bit of a boost because at the beginning of 2015 my parents gave me an unsolicited $14,000 loan to put against my credit card debt, which meant that the vast majority of my debt repayment was actually to my parents and was interest free. [...] I got into debt because I wasn’t earning enough money, and I got out of debt when I started earning enough money. That’s the simplest way I can explain it. Yes, we can analyze every purchase I’ve made over the past five years and say “you could have been slightly more frugal there,” or “you didn’t really need that,” but the years I was getting into credit card debt were also the years I was sleeping on the floor in a group house share in Los Angeles, or living in that microapartment where I had to wash my dishes in a bucket in Seattle. I was spending as little money as possible while trying to earn as much as I could, and I was using credit to fill in the gap.”