It’s no secret that the majority of Americans are carrying debt. In fact, about 81 percent of baby boomers, 80 percent of Gen Xers and 81.5 percent of millennials are deep in debt, according to a survey from Comet, a company that helps with student loan refinancing. The majority of millennials are lugging around tons of credit card and student loan debt, whereas baby boomers are knee-deep in medical debt.
Although debt can seem insurmountable, there is hope. Take a look at some of these success stories from people who were drowning in large sums of debt and paid them off quickly.
Click through to learn 30 ways to dig yourself out of debt.
Debt No. 1: How a College Graduate Paid Off $40,000 in Student Loans in 7 Months
Although Michelle Schroeder-Gardner is a successful entrepreneur now, it wasn’t always that way. Like many college graduates, Schroeder-Gardner left college with outstanding student loans — $40,000, to be exact. And despite the fact that it takes a person 10 years to pay off federal student loans with a standard repayment plan, Schroeder-Gardner vowed to repay her debt quickly.
How did she do it? She set up automatic payments to keep herself financially accountable, cut her overspending via an efficient budget and found some additional sources of income. Seven months later, her $40,000 debt was completely gone. Schroeder-Gardner now runs the financial website Making Sense of Cents, which helps readers learn how to be more efficient with their money.
Debt No. 2: How This Woman Paid Off $81,000 in Student Loans
Student loan debt also haunted college graduate Melanie Lockert when she left California State University, Long Beach in 2006. Lockert entered the real world with $23,000 in student loan debt. She tacked on another $58,000 when she took out a loan to attend graduate school at New York University, bringing her total amount of debt to $81,000.
Although it was tough, Lockert didn’t defer her loan payments. She worked three jobs to make a dent in her undergraduate loans. By the time she graduated, Lockert had knocked down her debt to $68,000. In order to take care of the remaining balance, she kept her living expenses to a minimum and paid her high-interest rate loans first. She even moved into a studio apartment with her boyfriend where she paid $400 in rent. After she found a steady source of income with a higher paycheck, she used that extra money to increase her student loan payments. Although it was a slow climb and filled with some bumps along the way, Lockert was able to pay off her debt in full while still young.
Debt No. 3: How One Couple Paid Off $55,000 in 2 Years
A stay-at-home mom at the time, Jessi Fearon and her husband were expecting their second child and drowning in $55,000 worth of debt. Jessi didn’t even have enough to pay for the insurance deductible to deliver her baby. But this harsh reality became the sobering realization that the Fearons needed to change their finances.
In two years, they paid off their two credit card debts, a car loan and student loans. For Jessi and her husband, the secret to paying off such a large amount was thinking smart. First, they tackled the smallest debt on their list and slowly worked their way up to bigger amounts. In addition, they traded in their car, eliminated $1,400 worth of unnecessary expenses, cut down their grocery spending and picked up a few side hustles. At the same time, they also tapped into their savings, which eventually helped them pay off $5,000 worth of debt in one month despite having one primary source of income.
Debt No. 4: How One Man Paid Off His $40,000 Student Loans in 2 Years
In 2010, Eric Rosenberg graduated college with an MBA but also with $40,000 worth of student loans. Two years and six days later, he was living life as a debt-free man.
Rosenberg knew that student loans would be waiting for him after college, so he began to make payments while he was still in school, starting with the high-interest-rate loans first. He also diligently used all his extra sources of income such as tax refunds, birthday gift money and bonuses to alleviate his debt. In just two years, Rosenberg successfully managed to pay off his debt.
Debt No. 5: How One Family Paid Off $110,000 in 2 Years
When Devin Elder and his wife got married in 2008, they thought inheriting each’s other debt wouldn’t be a big deal. But when they combined their finances, they ended up with more than $100,000 worth of debt from student loans, car loans, credit cards and other expenses. With no idea of where to start, they bought a copy of financial expert Dave Ramsey’s “The Total Money Makeover” and began to dig their way out of a $110,000 hole.
First, the couple put all their monthly expenses on a spreadsheet and tracked their spending. And although most people default to buying new things when they need something, the Elders made sure to use free resources first. As they made adjustments to their lifestyle, they eliminated their $100,000-plus debt in two years, including Devin’s $30,000 student loan debt.
Debt No. 6: How One Couple Paid Off $200,000
It’s no secret that downsizing can save you money, but it can also get you $200,000 out of debt. For husband and wife Garrett and Claudia Pennington, moving out of their 1,500-square-foot home to a 536-square-foot home was the key to financial freedom. Moving into a tiny home reduced their mortgage and living expenses by more than half. The extra money freed them up to make bigger payments toward their debt. In addition, the Penningtons earned more after selling a lot of their belongings from their first house.
And like most people in debt and in need of extra cash, the couple found some lucrative side hustles and reduced their everyday spending. The couple also returned two of the cars they leased to cut out unnecessary spending.
Debt No. 7: How One Woman Paid Off $100,000 in 5 Years
Monique Harps also turned to Dave Ramsey to help eliminate her $104,616 debt that she racked up during her college years. Harps was facing more than $50,000 in student loan debt, more than $30,000 in car loans and more than $20,000 in credit card debt. After college, she went to work right away and bought “Total Money Makeover.” From that book, she learned it is better to focus your efforts on one financial goal at a time instead of trying to reach them all at once. As she applied this to her life, her finances began to improve.
Of course, Harps had to make some sacrifices along the way. She got rid of cable television, picked up a job at Macy’s and even sold and bought stuff on eBay to save some money. Eventually, she was able to pay off her debt in five years.
Click through to see five debts you need to tackle before you retire.
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