From the comments at workshops I conduct, and based on my clients' situations, $70,000 in debt, excluding a mortgage, is not that unusual for someone with student loans and car loans.
What is truly remarkable about this story is that a young couple, Jamie Tardy and her husband, managed to tackle this amount of debt in a little over a year and have about $25,000 extra in the bank. How did they do it?
Severe Changes In Spending
Yes, sacrifices have to be made. I know it's hard to take but that's the only way you'll get ahead. For example, here are the things Jamie and her husband did:
- Traded in a new Honda Civic for a used Jeep and sold their second vehicle. They carpooled when her husband wasn't working from home.
- Shopped around and got better deals on car and homeowner insurance.
- Cancelled their cable. Personally, reading is more entertaining because you use your imagination!
- Got a cheaper cell plan. Why do you talk so much? Do you really need all those minutes?
- Only budgeted $25 a month each for spending money. That seems a bit draconian even to me.
You may have a few other ideas of your own.
Extra Work To Make Ends Meet
I don't recommend this, but if you are drowning in debt this may be a good temporary solution. Have the discipline as Jamie and her husband to not spend your extra earnings from the second job on lattes. Jamie said she worked 70 hours per week and her husband, a performing artist, did some web designing in his spare time.
Other Help To Get Out of Debt
Jamie said she read every personal finance book she could get her hands on. I don't think she was able to
locate a copy of mine. She also called Dave Ramsey's radio show for advice.
Lifestyle Changes Mindset
Interestingly, it used to be people were abashed to mention their debt in my personal finance workshops. Now participants not only mention the fact they have debt, but they're also brazen enough to tell eveyone in the room the exact amount of their debt. It's a sign of our times.
What are some of the ways you're going to save money and start paying off your debt? Your ideas will help others who come to this blog for help.