How Jonathan Paid Off Over $122,000 in Debt in Under 4 Years

Ready to hear Jonathan’s debt free story? (He’s paid off a LOT of debt.) His hobbies are personal finance, blogging, computers, and traveling. He’s an advocate of financial responsibility and loves to teach people how to be successful with money.

Tell us a little bit about yourself.

I was born and raised outside of Dayton, Ohio. After high school, I joined the US Navy as and Electrician and have lived in Japan, Illinois, Virginia and now I call Dallas, TX my home. I spent almost 10 years in the Navy, 3 years as a computer business owner, 7 years as a police officer and now I have been an electrician on an oil rig off the coast of Saudi Arabia in the Persian Gulf. I am married and have a wonderful daughter who is almost 12 years old.

How much debt did you pay off and how long did it take?

I paid off over $122,000 and took me almost 4 years to do it.

What type of debt was it?

Mostly credit card debt (over $50K), 2 vehicle loans, student loans, and federal taxes.

What prompted you to get out of debt?

Well, as you get older, (I am in my early 40’s) you start to think about retiring. I realized I really didn’t have a set plan to retire. For the first time, I put all of my debt on paper and was shocked at what I saw. I knew I had to make changes for myself and my family. I became determined.

How did you go about it? Did you use any particular methods or do anything unusual?

I moved, changed careers, and jobs twice. I ended up tripling my salary. Remember that your income is the best wealth building tool you have.

Did you have any setbacks while paying off your debt?

There are always setbacks. Some debts are like skeletons in the closet. You forget about them, but there are still there. Also, unexpected expenses come from time to time.

I guess the biggest setback, if you want to call it a setback, is that sometimes you have to hit pause on your debt pay off and enjoy your life. I don’t mean go back in debt, but to treat yourself when you do complete a financial goals, such as paying off a credit card.

I have read about people pinching pennies, literally, for over 5 years to get out of debt. To me, that is a long time not being able to really enjoy your family. If something ever happened to a member of my immediate family, what good times would I remember? How we would freeze in our house by keeping the thermostat very low to save a couple dollars? It is my opinion that you need to have balance when taking on any task. Extremes are stressful, potentially dangerous, and simply not worth it.

For example, I remember taking a 3 day weekend to San Antonio, TX with my family. We didn’t go into debt on that trip, we just pushed pause on our debt payoff and used the money we would have to take a short trip. The trip was refreshing and energizing. It helped us stay on track with our debt pay off. Most importantly, it gave us some good family memories.

How did it feel when you made your last payment?

The payment could not get made fast enough! I kept checking the bank website to see if the payment had cleared on the credit card. It seemed like it took forever! It really felt like weight off of our shoulders.

How has your life changed since paying off debt?

We have become more responsible with credit cards. We only use them as a replacement for cash and will never buy something that we know we cannot pay off at the end of the billing statement. We have been using the Costco American Express card. We pay it off every month and use it for any daily expenses. Since it is a reward card, we expect to get around $500 at the end of the year. We don’t plan to pay any finance charges and there are no annual fees. It is just money in our pockets. Some people would say that you won’t get rich with credit cards, but getting a check for $500+ is better than getting $0. Besides, who couldn’t use an extra $500, especially if the only thing you do is use it as you would use cash. For someone not disciplined in using credit cards as tools, I would just recommend not using them at all and just using a debit card.

Now that we do not pay interest on debt we have the luxury of maxing out 2 Roth IRAs and my 401K. Depending on investment performance, I projected my retirement at age 60 to be between $2-3.5 million dollars for retirement. That should provide a comfortable retirement.

What would you tell others who are struggling to get out of debt, or who believes that you have to be rich in order to do so?

Start from ground zero. Visually look at your total debt and keep track of it monthly on a spreadsheet. Creating and using a budget is a must. Reduce your debt as much as you can without it being “dangerous.” No freezing or starving yourselves. Remember that getting out of debt works 2 ways. First, reduce the amount of money you spend and second, increase the amount of income you make. There are many ways to reduce your expenses as well as increase your income.

The main thing you have to do is CHANGE. Keep focused on your goals and continually ask yourself, “how bad do you want it?” My favorite saying I came up with is “the only person stopping you, is you.” Nothing could be more true.

What else would you like to add?

Learn that retirement will always be more important than lifestyle. Never underestimate the power of hard work and discipline.