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How I Dissolved $36,000 Worth Of Debt In Less Than 3 Years

Updated: Apr 21, 2023

credit cards in a bear trap

Before March 2020, my debt had ballooned to $36,000 +, and I was living paycheck to paycheck. How had I gotten into this mess to begin with? Due to emergency travel and other events in prior years, I began to slip into debt in 2016, slowly at first. But by 2019, a short 3 years later, I had 3 credit cards maxed out, a car loan, and bills, bills, bills! Despite paying more than the minimum on my credit cards, my debt was growing. Then the Covid pandemic and subsequent lockdown hit, and 50% of my income vanished overnight.

I had too much income to claim any sort of unemployment benefits that were being handed out like candy by the state and Federal governments during the pandemic, but not enough money to service my debt and other bills. Little did I know that within 3 years I would be completely debt free. Here's what happened.

Picture it: Los Angeles, April/May 2020. It was the time of plague, murder hornets, bleach-drinking recommendations, and aliens. I had 2 rolls of toilet paper left to my name, I was eating rice and canned food for breakfast, lunch, and dinner, watching insane events play out in person and on tv like a high-drama, reality hit show right before my very eyes, and was contemplating cutting my own hair. I kept waiting for Jesus to take the wheel, but I have pictures of the jacked-up self-haircut to prove that he didn't.

Life was a hellscape of epic proportions. Was it any wonder that for the first 6 weeks of the pandemic, I started drinking promptly every day at 10 am? Who didn't? The gym was closed but the liquor store remained open as an 'essential business' the whole time. (I also gained 30 lbs during that year and have since lost it, but that's a story for another post.)

By week seven, I began to really worry. This pandemic wasn't going to end soon. I needed a plan, and quick. Firstly, I did a quick review of my finances and canceled everything excessive and unnecessary: Gym membership, bye. Streaming music, adios. I called my car insurance and reported I was no longer driving to work. They lowered my insurance substantially. I carried on until I had created a spreadsheet budget so tight and streamlined that no penny went to waste or was unaccounted for. My budgetary gymnastics were quite amazing, however, I still had a budget deficit.

I needed more money flowing in. I didn't care how I got this money so I let my friends know that would work and do anything (legal of course): manual labor slinging pig shit, cleaning houses, walking dogs, weeding gardens, or just about anything that didn't involve me taking off my clothes. What can I say? I come from farmers and have an unusual mixture of agricultural, blue-collar, and business skill sets. I didn't need a fancy title, I just needed dollar bills hitting my bank account.

My friend Hannah was the first to come through from my outreach message. She and her boyfriend were going to stay in Colorado with his family for a couple of months until the pandemic blew over. (Little did they know.) Could I watch their home and farm in Malibu during that time? Heck yeah I could! I would get paid to get out of the city wasteland of West Hollywood/Los Angeles, be by the ocean, and I could eat fresh, organic vegetables and eggs from their farm for free while doing it. Cha-ching!

Next, my friend Jennifer called. She needed someone to do some minor bookkeeping and expense organization for a couple of her clients at a cheaper rate. I had no idea how to do bookkeeping, but for $50 an hour, I was sure as hell determined to learn.

The side hustles kept coming and I kept saying yes. I couldn't go out to see friends or have a social life because everything was closed. So I might as well dedicate myself 100% to work until this blew over. In fact, I decided that I was going to do nothing but work until I was completely out of debt. I was farming and house-sitting in Malibu, pruning trees and gardening, cleaning up years of financial books for clients, processing contract cancellations from my old job, cleaning apartments, doing photography for individuals who needed it, and building websites for multiple people who didn't want to pay $3,000 to a designer.

Meanwhile, I deferred my Visa credit card and my car loan payment. I took all the money that I was saving from the deferment ($650) and any excess money I was I was earning from the side hustles and put it all towards paying my Amex credit card with the lowest balance of $2500. Within 2 months I had that card paid off which freed up $300 per month from my original budget.

I then took that freed-up money and part of my side hustle money, deferred my Mastercard payment for the 3-month maximum, and funneled everything toward the payments of my Visa card with a balance of $4500. Within 4 and a half months the Visa card had a $0 balance, and my budget was freed from an additional $500 per month. My budget deficit began to shrink and a snowball effect of available funds occurred. (I now had a total of $800 freed from my total monthly budget so far, in case you are keeping a tally.)

There were no more deferments allowed, so I began putting the $800 plus some of the side hustle money towards my MasterCard which had a balance of $10,000.

Meanwhile, I was back in the City of West Hollywood and was taking morning walks. I had begun noticing the items people were putting on the curb to throw away during these walks. People get rid of so many useful items all the time. Vacuum cleaners, desks, lamps, an exercise bicycle here, a filing cabinet there, end tables, a bureau, some planters. I saw a creative opportunity. I began collecting these items, taking them home, repairing and cleaning them when possible, and reselling them on the Facebook marketplace for a 100% profit.

From August of 2020-June 2021, I made $3,000 from picking up garbage from the curb, fixing it, and reselling it. I put this money in an investment account and turned it into $5,500 by April of 2022. I cashed out the money and paid off the remaining $5,000 I owed on to MasterCard on May of 2022. All of my credit card debt was gone, and my budget had been freed up from close to $1,500 per month.

I promptly opened a free second checking account, did two monthly auto deposits according to budgetary calculations for bills, and automated all my bills from this second account. I no longer have to worry about being short on cash for bills or stress multiple times a month to remember to make payments. It's all automated.

Also, did you know that you can get back hundreds or even thousands of dollars per year in cash if you put all of your bills and spending on a rewards card? I didn't before, but I do now. I took out a cash-back reward credit card, put the rest of my spending onto it instead of my debit card, and began paying the balance off monthly so I pay no interest. I get anywhere from $800-1200 back per year and use it on flights or towards a vacation.

To make things better yet, the world began opening back up from the pandemic again. Since I work at a job that requires a fully open economy, this was extremely important to my finances. In June of 2022, my job reinstated me to my full-time position and full-pay status. I began working 84 hours a day again, and my budget deficit was no more than a bad memory. But there was still a way to go in terms of debt.

I still owed $18,000 on my car loan, which I had refinanced at a 4% fixed rate in 2021 before auto loan prices skyrocketed. I had no problem meeting my monthly payment, but I wondered if I could I pay it off within another 2 years. I would try. I began paying 1.5 times more on the monthly payments, with the money I had remaining in my budget after maxing out my retirement accounts. (More on retirement later.)

Fast forward to March 1, 2023. I still owed around $12,000 on my car. On the morning of March 10, 2023, I woke up, and the first thought that came into my head was that I was done with car payments. (Prepare yourself because I'm about to get a little woo and mystical up in here.)

I didn't know how, but my car payments were going to disappear asap. I didn't know how $12,000 could suddenly be gone, but that's the thought that came so I just went with it. I closed my eyes, imagined what emotion I might feel if I had no more car payments, and felt that for a few minutes. I even imagined what I might do with the extra funds and it enhanced the feeling. It was a feeling akin to joy/love/freedom all wrapped into one. Then I got up, forgot about it, and went about my crazed work day.

Five days later I was on Facebook and saw a video ad. It was a woman talking about how she had her car completely paid for by the manufacturer for this little-known Lemon Law rule in California. She urged me to click the link because I too could have my car paid for. I can't go into detail at this moment about what happened because it's still in process, but I will very soon (much sooner than I had anticipated) have no car payments. Did I manifest that or was it just a coincidence? I'll let you decide. But that's how I dissolved all my debt in less than 3 years.

The short version of what I'm trying to say is that a crisis might be your calling card for a total transformation. My biggest financial fail turned out to be my biggest financial gift. It galvanized me into action and showed me what was possible, not only in the area of finance but also in other areas, including my love life.

(I am not a financial advisor, nor am I advising you on what you should do. This is just the story of what worked for me.)

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I love this! Congratulations on being debt free! 💕

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Thank you! I feel so grateful.

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