How I Got On Track To Pay Off $144K Worth Of Debt In Less Than Two Years
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How I Got On Track To Pay Off $144K Worth Of Debt In Less Than Two Years

About this series: Welcome to Scrimp City—an anonymous, week-in-the-life chronicle that provides a look at women who are trying to be smarter about money, whether that means saving more, spending strategically, or just being more comfortable managing their hard-earned cash.

In each installment, we follow one woman’s progress toward a money goal or challenge they’ve set for themselves. We learn about their typical spending/saving habits and see if, after their self-imposed money challenge, they come away feeling just a *little* more financially-savvy.

Meet Our Saver

In this edition of Scrimp City, we meet an account coordinator in Chicago whose income today is 10x what she was earning just a year ago. As in—she went from earning a net $13K in one year to earning an expected $134,500 per year. Of course, earning very little didn’t mean she was spending very little. She was spending—and charging—a lot. And…she wasn’t paying it off. All of her credit cards were in collection, she was making the minimum payments on her student loans and…well, things were bad. Very bad. But, as they say, ‘Out of sight, out of mind.’

It wasn’t until she had an all-too-honest conversation with her boyfriend about her massive debt that she finally looked at the numbers. That’s when she found out the harsh reality: Over the years, she had accumulated $144K+ worth of debt, including credit cards, student loans, and more.

When she got her new job—and a massive uptick in income—she saw an opportunity to once and for all start paying it off. From there, she launched an ambitious plan to clear her debt. Fast. To do so, she slashed her spending budget, negotiated with debt collectors and has embraced the popular “snowball” debt repayment plan where she makes as many payments as she can toward her debt. So far, she’s cleared $66,523.49 of her $144,003.24’s worth of debt.

In this Scrimp City challenge week, she walks us through her days as she tries staying within budget after moving cities and saving for a lump sum payment on her student loans. Here’s how she fared.

Quick Bio:

Job title:Account Manager


Location:Chicago, IL

Monthly salary:$5.5K+

I earn about $4K each month (non-exempt) and I get up to 30 percent each quarter as a bonus, based on my sales metrics. I also pay myself $1.5K from my side hustle.

Monthly rent: $1,099

Housing arrangements:I live in a co-living space and have four apartment-mates.

Estimated total monthly fixed expenses:$1,388.89

This includes my rent, insurance, club membership fees, and other bills for entertainment like YouTube/Spotify/Hulu. I also allocate an additional $75 a week for any “generic spending purposes” and budget $70 per week for groceries. I only ever have to spend on dinner (breakfast and lunch usually is offered at work)! I also have a $60 monthly credit for Lyft that helps me further keep costs down.

As for any other income I earn…if it’s not going toward my company’s 401K plan or toward my side business (I moonlight as a marketing coordinator), then I put it all toward my debt repayment. It’s part of my debt-repayment plan. Throw as much money as I can toward my debt right now to bring the balance down as quickly as I can! I discovered this method after falling down the rabbit hole of Dave Ramsey’s “snowball method” on the internet.

Total debt:

“My relationship to money is…an exercise in self-control.”

How to sum up me + money:

Let’s just call me a real-life version of the protagonist from Confessions of a Shopaholic! I was so used to the expectation that I could upgrade hotel bookings, flights—you name it—that I was living waaay beyond my means. But I’m proud to say I’m a reformed big-spender! After a heart-to-heart conversation with my partner, I realized I do have a spending problem and ignoring it is just reckless. So, now I’m committed 100 percent to repaying all of my debt as fast as humanly possible. And if I have to make sacrifices in the meantime, then so be it.

My current spending habits:

On paper, I owe a lot. Of my original $144K total debt balance, I’ve managed to clear (by either paying it off or having it waived) $66,523.49. I still owe $77,479.75! It seems like something that could take me years to pay off, but right now clearing that debt is my priority. To do this, I essentially slash my spending every which way.

Within my budget, I account for my fixed expenses (recurring utilities + rent) and then allocate $70/week for groceries and another $75 for spending on whatever I want. This is dramatically different than what I used to spend back in the day. If I’m being truthful, I could easily rack up $400-$500 a week before my debt repayment self was born! I’d spend ridiculous amounts on phone games, pricy enamel pins and a bunch of other random stuff that I just didn’t need. Nowadays, I mostly stick to my $75 budget to have fun or go out and I put everything else on hand toward my debt. You see, paying off debt isn’t sexy. But the feeling once you’ve done it? It’s absolutely thrilling.

How I got here…and why I’m trying to save

My money goals:

Being debt-free! And being able to enjoy my life on my terms with the money I earn.

How I’ve handled my finances in the past:

As part of my side hustle, I spent a year doing a lot of speaking engagements, which allowed me to travel the country. Sometimes I’d get paid, sometimes I wouldn’t. But almost always, as part of the compensation, I’d get travel, board, and some meals covered. The bare necessities weren’t a big problem. With so much travel, I decided against a permanent residence and my only expense was my car. Any income I earned from the business, I put back into it so by the end of a year, I had a net income of $13K! But, of course, I got used to wanting to travel lavishly and I began racking up even more debt while charging for almost everything I could.

When I finally assessed the damage last year, here’s what I learned:

Student loan debt: $99,622.75 (Paid $21,143.00)

Credit card debt: $29,726.65 (Paid $18,425.59, Waived $11,301.06)

Misc. debt: $15,653.84 (Paid $13,722.84, Waived $1,931.00)

My total, original debt: $144,003.24

How much debt I’ve cleared: $66,523.49

My total, remaining debt: $77,479.75

I still have a ways to go but if I keep going at this pace, I will reach my ultimate goal of being debt-free by the end of summer! More realistically, though, I will be debt-free by next year! The tactic is to set an aggressive goal and to have a backup goal.

My go-to budgeting tool: My handy, dandy Excel sheets

After committing myself to being debt-free, I’ve found a community online of other like-minded big savers. And while there’s plenty of budgeting apps out there, a good Excel spreadsheet is all I need. I started by tallying up all of my debt by category. I created a spreadsheet with the company name for each debt collector, the amount owed, and the interest rate. With the help of a few formulas, I can input the numbers on a regular basis and see individual cells turn to green or red so I can see whether I’m within budget. It also helps me monitor how each debt payment lowers my overall balance owed. It’s pretty motivating!

How I negotiated with my debt collectors to slash my total owed debt:

In March, I tallied how much I had saved up over a few months. Yes—I know it’s wild, but I actually managed to save almost $14K over a few months yet still stupidly, somehow, still had credit cards with collectors. *insert sob emoji here*

To make the most out of my savings, I went line by line and called each debt collector company and negotiated the total balance owed. Some companies wanted the balance paid in full, but others were flexible! I was able to waive $1,931.00 from my miscellaneous debt and used the money I had saved to pay off what remained (a total of $13, 722.84).

I’d also used the same tactic starting last year when I called each of the companies holding my credit card debt. After a lot of calls and saying, “I owe X, if I pay Y, will you consider this debt settled?” I managed to get $11,301.06 worth of debt waived. That left me with $18,425.59 in credit card debt, which I paid off using the snowball method! In January, I made my last credit card payment to collectors!

How I’m challenging myself this week:

Thankfully my company gave me a moving stipend but my plan is to get rid of most of my stuff (living that minimalist lifestyle!), rent a car and handle the move myself. I’ll use that stipend as another payment toward my student loans! And, as usual, I’m trying to stick to my weekly discretionary spending cap. No more than $75/week!

Day One, Friday (A.K.A. Payday):

Today was payday and the first thing I do is pay bills and make transfers to savings. I put $200 in my travel cash envelope because I travel a TON for work and personal reasons. My moving costs ended up totaling about $300! Which meant, of course, that I was able to put my full moving stipend from my job towards debt. It meant some extra sweat and tears during the move, but was worth it to see this big debt payment!

Every pay period I also put at least $125 toward general debt (this is my mandatory minimum biweekly ‘excess contribution’ to debt payments). I’m also very very happy to say I was able to make another lump sum payment in cash toward my student loan balance! Because I was so economical with my move, I was able to use the stipend, plus some savings I had worked up to make a $11354.63 payment to my student loans!

Other than that, my general day was pretty lowkey. I worked from home today because I traveled in the afternoon. I ate breakfast at home (frosted flakes, almond milk, orange juice). I have a monthly budget of $70 for groceries (mostly for dinner and some sundries—I eat breakfast and lunch most days at work for free). Continuing to work from home, I ate an antipasto salad for lunch that I purchased and prepped previously. In the afternoon, I drove to Madison, WI with my boyfriend (M) for his job. He paid for gas and will get reimbursed. His job is also paying for the hotel. M and I are really good about taking each other on work trips for ‘free’ vacations for the other person. Love when it works out like this!

While my boyfriend was working, I met up with a friend for dinner and ordered cheese curds (to share) and a burger + boozy milkshake. I also took Lyfts to and from the hotel because M had the car. Total expenses were $31.12 for dinner and $27.57 on Lyft). This was more money than I wish I had spent, but I felt better about it because I was able to take the milkshake back to the hotel for M to share and he loved it! Worth the extra $6. Oh, I should mention I have a $60 Lyft budget every month and I realized I spent about half that in one night. That’s a little frustrating.

Spent: $59.69 (plus an additional $200 put toward my “travel cash” envelope)

Debt Payment: $11,479.63

Day Two, Saturday:

This morning, I dropped M off at work so I could have the car for the day. I also stopped for coffee for both of us on our way to his event. Wisconsin has amazing prices on coffee! (-$2.37). I stopped at Kohls for socks (-$28). I walk to work, so these really should be a ‘commuter expense’ because I go through socks so much. The socks that I love were 25 percent off plus buy one pack, get one half off, so I was very happy with this purchase!

Later, I stopped by my company’s Madison office to get some work done (and take advantage of the free snacks and drinks to make a lunch out of). I’m so grateful that when I’m traveling I can pop into my company’s offices to get some food and take a break. Around 3:30 pm, I picked up M from his event and we headed out to drive the 6.5 hours from Madison to Metro Detroit to spend the holiday tomorrow with his family. We stopped for dinner about halfway through the drive. Since he was paying for gas, I picked up our dinner at Panera (-$17.93) I was so glad to be able to keep this meal very cost effective for two people to have healthy food on the road!

Spent: $48.30

Day Three, Sunday:

After a great day with M’s family in Michigan, we loaded up the car to drive back to Chicago. We stopped for coffee on our way out of town. I had a Starbucks gift card, so there was no additional cost for this. Nothing was open for dinner on the way home because of the holiday, so we stopped at Taco Bell to get a couple of tacos to hold us over until we got back to my apartment (-$7.20).

Spent: $7.20

Day Four, Monday:

Ate breakfast and lunch at work. Also ate leftover antipasto salad.

Spent: $0

Day Five, Tuesday:

Ate breakfast and lunch at work.  On my way home from work, I stopped in for a tattoo consult that I’m considering getting in a few months. I then took a shared Lyft home from the consult (-$6.11). Because this was a shared Lyft, I was able to use my pre-tax commuter dollars that I have withheld from my paycheck every month. That means I saved 30-40 percent on this Lyft! Ate a chicken sandwich for dinner that I’d purchased and prepped previously.

Spent: $6.11

Day Six, Wednesday:

As usual, I ate breakfast, lunch at work and I made use of leftovers for dinner. I purchased a signed copy of The Home Edit’s new book for my mom for Mother’s Day using a gift card I had on hand. Another gift card came in handy when I needed to buy snacks for home. In order to not eat away at my discretionary spending budget, I rely on earning gift cards from companies!

You’ve probably read online that you can earn cash by doing online surveys, but the real trick is to participate in paid research from companies. I regularly do surveys via UserInterviews and earn $25-150 worth of gift cards, depending on the survey. I then hoard these gift cards and use them for purchasing gifts or splurge items for myself. To cut down on time, I’ll do the pre-screen surveys during lunch or on a commute.

Spent: $0

Day Seven, Thursday:

Would you believe I smashed my phone screen when I tripped and fell on Monday? Ugh. Getting it repaired cost me $179.99 out-of-pocket—BUT—thankfully my renter’s insurance will reimburse me. What a lucky day to have agreed to the “portable electronics add-on” in the insurance.

Later, I attended a dinner held for speakers (my gig tomorrow). While dinner was covered (speaker perks!), I took a Lyft to and from the dinner.

Spent: $10

How much I saved by end of week:

Total Spent: $331.30*

*This includes the $200 I added to my general travel expenses envelope! I do this at every pay period. It also doesn’t include the $179.99 I will get reimbursed from insurance for my phone screen cracking. I was able to make a big debt repayment sum due to some funds I’d saved up as well as the moving costs stipend. So, technically, out of pocket spending this week was $11,990.92.

Total Debt Repaid: $11,479.63

Final thoughts:

After logging my daily expenses this week, I was surprised to see how there are small areas where I think I can cut back on my spending even more. Or, at the very least, spread it out. The week didn’t start out that well, since I was sad I spent so much of my fun fund on payday. If I think about it, this is a bad habit of mine. I spend a lot on the first day I get paid and as a result eat up a lot of my overall fun budget. The good news is I always make up for it in the days that follow.

I wonder if some people will read this and think I have a really, really intense frugal lifestyle right now, even though I’m making good money. And, it’s true. I am super frugal—right now. But I do still try and have fun on the weekends and see my partner and generally do fun stuff. After doing the Scrimp City challenge, I started thinking about how I can keep my motivation going. And this is what I came up with: I can imagine my ‘future state budget.’ That is, I can focus on how more relaxing my life will be once I’m debt-free and can spend my money on all that I enjoy! Things might seem dire now, but they won’t always be.

—As told to Theresa Avila