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The Six Biggest Lessons I Learned While Paying Off My Debt

Paying off debt lessonsThis is a post from Richard at Frugality Magazine. Enjoy!

Just before Christmas last year I reached the point of having paid off all my consumer debt – a situation that seemed insurmountable just a few short years before.

When I finally accepted by debt problem – something that took far longer than it should have done – and decided I needed to shift the weight of growing interest and spending every available penny on repayments I examined every available option.

What about debt consolidation? Or an IVA? Or even bankruptcy? I just couldn’t see a way that I was going to pay off the mountain of money that I owed while keeping up with even my most basic of living expenses.

But you know what? After some serious consideration I opted to avoid all these potential “short cuts”. I just decided to knuckle down, become more frugal, cut my living expenses and pile the extra cash into my debt. In other words I did it the plain old boring way.

The *reason* was simple – my debt was painful but I wanted to fully meet all the agreements I’d made with my creditors (a moral argument) and I also sort of wanted the process to be uncomfortable as a lesson on *why* I shouldn’t ever get into debt again.

Rather like the reformed smoker I wanted to show it was possible and let the “pinch” be a constant reminder of my past foolhardiness with money.

It’s not a decision I’ve regretted. In fact, I feel in some way it’s been a positive process. It’s certainly taught me a thing or two about the evils of debt and even about life in general.

But what specifically were the biggest lessons I learned on this often painful yet ultimately-successful quest?

Paying Off Debt Is Easier Than You Think

When faced with a giant mountain of debt it’s all too easy to become demotivated. To plan out your budget and work out just how many years you’re going to have to scrape by can be a truly sobering experience.

But if you use get serious about paying down your debt, it’s amazing how quickly you can get those balances moving in the right direction.

What’s more, if you opt for a process like the “snowball method” you’ll start to quickly wipe out one debt after another. And with each new balance cleared, you have even more money to pile into the next debt. The pace grows as the “money snowball” knocks over one debt after another.

In fact, once I really got going, I actually started to enjoy opening my credit card bills and loan statements to see just how much debt I’d managed to wipe off this month. Watching those numbers going down almost became addictive over time!

Extra Cash Is All Around You

One factor that many people trying to get out of debt struggle with is where to find the extra cash to really start making inroads in their debt. However I found additional sources of cash all around me when I started looking.

I listed my unwanted books on Amazon. I sold unwanted items on Ebay. I did some freelance writing on Elance. I took overtime at work. When I moved from one job to another, I’d worked so hard the old job owed me several weeks in holiday pay that I hadn’t taken.

Sometimes all it takes is a few hundred dollars to really get the snowball started and once you’re in motion it’s a lot easier to keep going than it is to get started in the first place.

Your “Essential” Purchases Are Often An Illusion

Another key lesson I learned while paying off my debt is that many of the things I bought that I considered “essential” to my life really weren’t. When I was in “cutting mode” removing *any* unnecessary purchases there were some painful decisions. Magazine subscriptions. DVD rentals. Meals out. My beloved trainer collection.

Yet all too soon I found I was surviving just fine without them. Infact even now I’ve paid off my debt and actually have the money to start spending again if I want I’ve chosen not to.

Why? Simply because I’ve realized that I really don’t need 90% of these things to really make me happy. In a way, while uncomfortable at the time, being forced to prioritize and examine my spending has had a positive long-term effect on my financial management. Living reasonably frugally now is now my “default” mode and I feel no sense of loss from the things I have consciously chosen not to purchase.

The Key To Success Is Focus

For too many years I planned to pay off my debts but never really got serious about it, meeting only my minimum payments each month. Somehow there was always a reason why I couldn’t get started this month but, as I promised myself, I’d start *next* month.

If you’re serious about paying off your debt you need to make it a major priority. You need to focus on it, expend energy on it and really do everything in your power to make it happen.

I truly believe that it’s this focus that is a major factor in your success rate when paying off debt.

Budgeting Doesn’t Have To be Difficult

Bearing in mind that I’m a personal finance blogger, I have a deep, dark secret to admit to; I hate budgeting. I don’t mind spending less than I earn but what I do hate is all the recording, all the tracking, all the penny-pinching.

But there are alternatives, as I found to my advantage. Instead of spending time creating a budget to cover every eventuality I decided to focus my “budgeting” on cost-cutting. In essence I spent time each month combing over my bank statements looking for either “unnecessary” purchases or things I could downgrade and spend less on.

By doing this every month I kept on cutting my expenses, giving more money to repay my debts, without having to track every single purchase I made.

Then at the end of each month when I got paid I simply rolled forward the previous months savings into even bigger debt repayments and re-examined my spending to find even more cuts for the next month.

This process of constant improvement meant I was paying more and more towards my debt each month without feeling too claustrophobic about the whole process.

Hundreds Of People Just Like You Have Already Succeeded

You may think you’re special. You may think your situation is unique. You may believe you’ll never reach the end of your debt repayment journey. But the fact is that hundreds – even thousands – of people who are now debt free have stood exactly where you are now.

So go and learn more about them – their stories are everywhere. Use them for inspiration to get you started, to bolster your motivation along the way and to provide tips and advice on what worked for them. Use their successes to create your own.

Kim’s Comments: I think knowing that others had been in my situation and rose above to conquer debt was a big help when we were starting our journey toward debt freedom. Finding like minded people is key.

Author Bio: Richard is a tarantula keeper, sun-worshipper, and obsessive frugality blogger. You can follow Richard’s journey to financial freedom at Frugality Magazine or on Twitter @FrugalityMag

Image: Freedigitalphotos.net/Miles



About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. Richard, thank you SO much for sharing your story. We too have chosen the “long way” out, working to avoid bankruptcy or debt settlement options. Sometimes I wonder if we’ve done the right thing, and your story has really helped me to want to stick with it. Thank you, and HUGE congrats on reaching your debt freedom!

  2. Great lessons here Richard! I purchased many things I thought were “needed” only to find they were sinking the ship further down. It’s easy to convince yourself items are a need when in actuality they are a want. Oh, the lies we tell ourselves. Thanks for sharing your story and congrats on defeating the debt monster!

  3. I definitely agree with your ‘essential purchases’ argument. Seth Godin once said “people don’t buy what they need anymore.” You can get by with a LOT less than the average American has, but people simply don’t want to. When it comes to paying down debt sometimes you have to make sacrifices that are out of the ordinary for regular folks, but in the end it can really help accomplish your goals. At least that’s what I’ve seen.

  4. Thanks or the encouragement! If you guys have question about brewing coffee at home id love to help =]

  5. Great post! It’s taken a long time, but we have also come to realize that “things” don’t make us happy and that getting by on less helps us put more toward our debt. We put our mental blinders on and pay little attention to what everyone else is doing. We’re not debt-free yet, but getting closer! Can’t wait for the day…

  6. Thanks for sharing your story, Richard. Debt often seems overwhelming when people get ready to face it head on. But like you said, it can be conquered. We sometimes forget how many people have successfully eliminated their debt and now have financial freedom. While I certainly never recommend people going into debt, there are definitely valuable lessons you learn while you get rid of it. To me, the most important one is realizing what truly makes you happy and discovering it wasn’t the “things” you originally thought.

  7. Thanks for sharing your story! Your motivation comes through very clearly here, which is great. You’re right that getting the little wins in the beginning can be very important to getting the ball rolling. I think it’s awesome you’re excited to open statements to see how much progress you’ve made. Great mindset!

  8. Thanks for all the positive feedback everyone – and thanks to Kim who kindly agreed to publish my post 🙂

  9. I think you bring up a great point that items we thought were “essential” turn out to not be. It is amazing how much more “simplified” my life has gotten now that I have focused more on growing my wealth and not spending it. I don’t miss anything from my previous spending days.

  10. Awesome awesome post. I’m in the process of paying off a huge amount of student loan debt and the idea of cutting costs and putting those savings into debt repayment is so powerful. Talk about a quick way to increase your net worth! Debt must be destroyed.

  11. “Your “Essential” Purchases Are Often An Illusion” <— yes, this! We went through a similar experience in paying off $109,000 of credit card debt. As we changed made the necessary changes to our lifestyle, we were amazed at just how much we were able to slash from our spending. If you really have to, you can live on just a fraction of what most people spend in a month!

  12. Thanks for sharing your story Richard! I too chose the “hard” way out and paid off my debt as opposed to looking for other solutions. The crazy thing is that I couldn’t even conjure up the cash to declare bankruptcy. That said, I’m so glad that I took that path as I learned invaluable lessons that I still carry with me today.

  13. We decided to take the hard way as well. You’re very right about “essential purchases”, we cut out so much “essential” stuff when we started paying off debt. It’s not difficult to pay off debt, it’s just difficult to stay motivated, so we’re just plugging away at it for the next few years and then we’ll have the rest of our lives to be debt-free.

  14. Great post! It encourages everyone to face and settle their debt.Getting into debt is easier but hard to face it especially when the debt exceeds the amount of income you have. So,when you are in debt problem, paying it off is necessary.Yes, you really need to budget your money well in order to slowly settle your debt.

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