How did he do it?  He prioritized it.  It took only two years after graduation for him to pay off what he initially borrowed, which from the post appears to be in the neighborhood of $40,000.  In his words:

Over the last two years, every dollar I earned from my annual bonus and every dollar from my tax refunds went straight to either my car loan or student loan payments.

Making good use of financial windfalls is a great way to give a big financial goal a one-two punch.  There’s a tendency to blow it on something frivolous, but some restraint and a little wisdom can pay handsome dividends.

The way they thought about getting out of their debt was not to think about the debt, but instead visualize what they really wanted:

I wish I could walk you through the daily grind of sacrifice and debt repayments.  I wish I could enthrall you with images of me selling my once prized possessions at garage sales to get money to pay extra towards debt.  But for us it wasn’t really like that. It was more of a slow progression away from stuff and towards financial freedom.  As we focused more on what we really wanted in life the “stuff” of life fell to the side.

What’s often frustrating with the debt reduction is the doing-without part.  If all that remains during a debt reduction plan is lots of holes where stuff used to be, it’s going to be depressing.  But with the holes already filled in (at least mentally) the process becomes easier.  Not easy, but easier.  The process feels more like working toward something good instead of running away from something bad.

Congratulations Andrea!

Beautiful!  Love those round zeros!  ~ Broke Gal in NYC

A few things that are great about retiring that debt:

• Things are simpler.  Fewer monthly bills to keep track of.
• Things are freer.  The money that was going toward those payments can now be shuttled somewhere else.
• Things are just plain easier.  The psychological weight of those credit card payments is gone.

Great job Broke Gal!

This post features 20 and Engaged. I shared a cab ride back to the airport with her from FinCon11.

Her post on July financial challenges is a few months old now, but the gist of it was that she was gearing up for a number of goals for the month. Such as:

• The “No Spend” challenge: Spending only on essentials
• The “Use It Up” challenge: Buying only when you run out of something
• Save more: Goosing that bank account up from $3
• Get financially organized: (I hear you!)

Ambitious, no? One could argue that the first two complement each other, because using stuff up helps you not to spend. So let’s call it 3.5 challenges for the month of July. From my standpoint, I have trouble with just one big challenge. If she could handle all of those challenges, and meet them, she’s far better than most people!

Success breeds success. If you can get through one challenge in a month, that gives a great boost in confidence. But if you take on four challenges and get through one of them, it seems to be more failure than success. The same number of challenges were conquered in each case, but batting 1.000 seems better than batting 0.250.

It’s all a matter of taste, stamina, pain tolerance, etc., how much we take on, but if taking on too much is self-defeating, try dialing it back a bit. Take things on in reasonable chunks. Your stress level will be lower, and “the challenge” won’t seem as great as it would otherwise, which means you’ll have a better chance of actually meeting it!

First off, the Carnival of Debt Reduction was always meant to be about personal debt reduction posts.  People need to continue to see that it’s possible to get out of debt.  I want to continue to spread the word about this and to highlight the people who are blogging about their debt reduction.

Over time, it’s been tougher to convince people to host the carnival.  (To those of you who have, thank you!)

Rather than shut down the carnival, I’d like to switch it around a bit and offer those of you who are blogging about how you personally are getting out of debt to continue to submit your articles, and I’ll feature them here.  (If you’ve submitted posts over the past few months, I’ll be going through those first.)

I’m not interested in generic debt consolidation posts, generic frugality posts, etc.  I want posts on your progress.  I want posts celebrating a paid-off credit card.  I want posts that talk about how it feels to finally be debt-free.

I want posts that encourage others to do the same thing you are doing.

So I hope you’ll help me to spread the word about this.  Let me help you promote all of the good work that you’re doing at getting rid of your consumer debt.

• Canadian Finance Blog runs down five mistakes people make when paying down their debt.
• Retire Happy Blog says that paying down debt may be one of the best investments.  (So true!)
• Stupid Cents lists ten excuses people use that keep them in debt.  (Get rid of the excuses!)
• Invest it Wisely has a guest post on how to apply for a debt relief order.
• Deliver Away Debt (now under new ownership!) lists ten get out of debt books.
• Christian Personal Finance reviews Debt Wise.

Thanks!

• Canadian Finance Blog hits the nail on the head:  How to get out of debt.
• FrugalLiving.com.au has three ways to regain some control of debt.
• Prairie Ecothrifter says that slow and steady wins the race when it comes to debt reduction.

Thanks!

• The Digerati Life has some suggestions for what to do when you have too much debt.
• Money Is The Root asks about which debt to pay down first?
• Christian Personal Finance recommends asking six questions before borrowing another dollar.
• Sweating the Big Stuff has a list of signs that indicate your borrowing is out of control.
• Retire Happy Blog says that debt may be good reason not to save.
• Stupid Cents shares seven lessons dealing with being a young adult in debt.

Thanks!

• Free From Broke has a guest post from Life and my Finances on how he paid off $25,000 in debt in just 14 months.  Great job!
• Frugal in my Forties asks if it’s right to settle debt for less than what’s owed.
• Stupid Cents talks about snowballing credit card debt away.
• Canadian Finance Blog says that baby boomers need to get rid of debt if they want to retire.
• The Digerati Life has some advice on getting rid of debt — from debtors.
• Wealth Pilgrim explains how to get rid of college credit card debt in just two years.
• Retire Happy says that the best retirement is debt-free.
• Sweating the Big Stuff proposes paying down debts first, and saving second.
• One Couple In Debt suggests that reducing debt can reduce your waistline, too?

Thanks everyone for the submissions!

• Dealerity aims to be mortgage-free in five years.  This is great!
• PT Money tells the story of a drink-maker who’s paying off a lot of debt by working at Starbucks.
• Sun’s Financial Diary discusses debt settlement.

Thanks!