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My Divorce Left Me $22,000 In Debt. Here’s How I Paid It Off In 6 Months

Derek Sall
July 31, 2019

I did it. I paid off $22,000 in debt. And I did it in six-months. The journey was a wild one, and it’s not one that I’d ever want to take again, but I learned so much through the process – what I’m capable off, what it’s like to win, how to achieve success when everyone says you can’t do it.

It is possible. And if I can do it, you can too.

My Backstory In A Nutshell

I was in my bedroom in 2012 getting changed after a hard day at work. My wife walked in, strolled to the other side of the room, and uttered a few words I’ll never forget for the rest of my life: “I want a divorce.”

My body seemed to shut down then and there.

I was in shock, and I soon found myself sitting on the floor, head in my hands, completely uncertain of what to do next.

Unfortunately, she was serious and never changed her mind, and we went through with the divorce.

With the divorce came a price tag: $22,000. That’s what I owed my ex-spouse – half of all that we had (which, for the most part, was equity in our house). And she wanted it in six months.

With the divorce came a price tag: $22,000. That’s what I owed my ex-spouse – half of all that we had (which, for the most part, was equity in our house). And she wanted it in six months.

I Found Myself In $22,000 Of Debt…Now What?

I walked out of the courthouse, and the clock on my debt officially started. It was time to find some money, and fast.

You know the saying, “When the pain of staying the same is greater than the pain of change, you’ll change.”? I was absolutely there.

I was outraged by the divorce. It completely ticked me off that someone could just give up on me for seemingly no reason at all. After that courthouse visit, I was frustrated, and at the end of my ropes. I was ready to get rid of my ex as quickly as possible. The sooner I could break the ties of debt that I had with her, the better.

The sooner I could break the ties of debt that I had with her, the better.

In this moment, I wanted nothing more than to pay her off in full, say “See ya later,” and get on with the rest of my life.

The Beginnings Of My Get Out Of Debt Journey

There are people out there who have big goals. They want to lose hundreds of pounds, run and win marathons, become leaders of companies.

Do you think any of them succeed by chance? Do you think they just wake up one day shocked that they’ve achieved the goal they thought about once a few years back?

Of course not.

For the most part, they’ve mapped a course, plotted their progress, and have inched their way forward day after day according to a master plan that they’ve set for themselves.

Getting out of debt quickly is no different. You’ve got to start with the end in mind.

I knew I had to tackle these questions:

  1. How much debt do I want to clear?
  2. In how much time?
  3. That means I’m going to have to pay $XX a month, which means a payment of $X a week (fill in the X’s with your actual numbers)

Mine went something like this…

I knew I had six months. I owed $22,000. That means I had to figure out how to get $3,667 extra dollars a month — a little over $900 a week.

Gulp.

Thankfully, I wanted it bad. It was time to get to work.

Cutting My Expenses Down To Next To Nothing

If you’re looking for dollars, the absolute easiest way to find some is by cutting your unnecessary expenses. But first, you have to know what every single detailed expense is.

It was time for me to look up my charges over the last six-months to figure out how much I was spending each month, and on what.

I’m a fairly frugal guy, and this experience was eye-opening to say the least:

  • House payment: $780
  • Utilities: $200
  • Car Maintenance: $100
  • Gas: $200
  • Phone: $85
  • Food: $300
  • Clothing: $50
  • Giving: $300

I laid out my expenses, got the above results, and then I actually started to dig into them.

In regards to my house payment, I found that there was an escrow fund that covered my home insurance and taxes. I had private mortgage insurance since I bought my house with only 10% down. And then the remainder of the payment was going towards principle and insurance.

It had been a couple of years since I bought the house. Not only had I made extra payments on it over those years, but it had also appreciated in value substantially. I figured my equity to debt ratio was more like 30:70, so I really shouldn’t be paying PMI. I called the bank, they agreed. Boom, an immediate savings of $20 a month.

I then told them that I’d like to manage my home insurance myself and to cancel the escrow account. Since I was beyond the 20% equity-to-debt ratio on the house, they were fine with that. Guess what the balance of the escrow account was? $2,000! They sent the check my way immediately.

My home insurance was roughly $600 a year when I purchased the house. After calling around to providers, I was able to drop this down to $360 — another $20 a month saved.

All this, and I’d only dug into one budget line item! Are you starting to understand the power of laying out your expenses and truly understanding them?

I don’t need to bore you with every detail, but I went line by line and found reductions in my monthly spending by:

  • Reducing my car insurance
  • I started fixing small things on my car myself (thanks YouTube!)
  • I rode my bike more and saved on gas
  • The cell service provider dropped my bill by $20 for being a loyal customer
  • I figured out how to live on a grocery budget of just $100 a month
  • And, I really didn’t need any new clothes, so I cut that completely

All in all, I figure I saved over $500 a month just by cutting my expenses and got that windfall check of $2,000 from the bank. It was a great start, but I still had to find more. It was time to look at my earnings.

All in all, I figure I saved over $500 a month just by cutting my expenses and got that windfall check of $2,000 from the bank. It was a great start, but I still had to find more.

Working Like A Madman

At the time, I was making about $60,000 a year at my full-time job and I had my website that earned roughly $6,000 a year. After my typical spend, I had about $2,000 of discretionary income each month.

Now, with my additional dollars saved each month (from the exercise above), I had about $2,500.

This was great and all, but I was still short. By starting with the end in mind, I knew I needed $3,667 a month to pay back my ex in full. That meant I needed to find $1,167 additional dollars a month.

It was time to earn more money. But from where?

I started with my skill-sets. What was I good at today that I could simply expand on and earn more money doing?

I started with my skill-sets. What was I good at today that I could simply expand on and earn more money doing?

I immediately thought of three: Writing personal finance blog articles, growing my website and opening it up to more advertisements, and buying and selling cars (my dad was a used car dealer…it’s in my blood).

Bloggers are always looking for ways to add content to their site without spending hours developing it themselves. I reached out to all my blogger buddies and told them I’d write simple articles for just $10 a piece. They all jumped on this. Over the course of six months, I wrote over a hundred articles and earned nearly $1,500.

With my interesting story and my writing capabilities, I was able to grow the blog a bit, but it didn’t net what I was hoping, and I only ended up earning a couple of hundred dollars more than I expected.

The car flipping operation, though, proved to be a big winner. I scoured Craigslist, looked for cars that were priced at a bargain. I negotiated them even lower with cash in hand, fixed them up, and then sold them a month later for a profit.

The first flip earned me $700. The next netted $1,200. And, the final one wasn’t quite as smooth, but I still made $500. In total, I banked $2,400.

Beyond this, I also mowed lawns and sold nearly everything in my house (I literally had a mattress on the floor with nothing else around it), which earned me another $2,000 or so.

I Tracked My Progress Weekly

To make sure I was staying on track (it’s really easy to get behind when you have big, hairy, audacious goals), I needed a weekly review of my savings toward the $22,000 monster of a goal. Would I really be able to stash away $900 a week? And if not, what could I do immediately to ramp up my efforts?

Would I really be able to stash away $900 a week? And if not, what could I do immediately to ramp up my efforts?

These are the questions you need to continually ask yourself if you actually plan on hitting your targets.

Enjoying The New Perspective

Is it fun to deprive yourself from going out to eat? From going to shows? From buying cool things at the store?

No, not at all.

But, paying off debt at an extreme rate actually tends to slow things down – it provides a new fresh perspective on life – one without shallow friends, one where you’re the King of your own destiny and where nobody else can dethrone you. It’s a truly powerful feeling that I encourage you to experience for yourself.

While the process can be daunting and difficult to stick with, it’s completely worth it.

My Life Today Couldn’t Be Better

So what does the other side look like? What is it like to be completely free from consumer debt?

It’s absolutely incredible.

After freeing myself from that $22,000 of debt, I found myself with a massive chunk of discretionary income each month (like $3,000 that I didn’t know what to do with).

After freeing myself from that $22,000 of debt, I found myself with a massive chunk of discretionary income each month (like $3,000 that I didn’t know what to do with). Since I no longer felt the need to buy a bunch of stuff to be happy (going through this process will do that to you), I simply saved it. I figured I might use it for a future investment.

And I did. The first investment was on an engagement ring (that’s right, I met someone else that actually respected money and me). Then I spent money on our simple wedding. We bought a rental house (that’s still earning us $1,300 a month as we speak). We also flipped a house (we earned $27,000!) We spent on our childrens’ private school and college funds (yup, we have two kids now!) And finally, on our dream house with acreage.

Like I said, life is good.

Derek Sall is the founder and editor of LifeAndMyFinances.com. He loves to help others get out of debt, save up money, and become wealthy!

More From LifeAndMyFinances.com:

How To Save Half Your Income

15 Of The Dumbest Ways To Pay Off Debt

Should You Use Cash Or Credit Cards

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