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WARNING- Looooong post, but with a happy ending!!!

It's hard to believe that I'm finally writing the post I've been waiting to write for three and a half difficult years. Today I received confirmation that our last two outstanding debt payments (aside from our mortgage) have been received and our accounts have been marked as paid in full.

For those who are newer to the board, here's our background in brief: In the Fall of 1997, my wife and I found ourselves with a grand total of $84,000 of debt. The breakdown was as follows:

$37,000 on EIGHT credit cards...
$14,000 in student loans...
$18,000 on one new car loan...
$15,000 on another new car loan...

We were maxed out and drowning in our debt. I decided that my pride would not allow me to consider filing for bankruptcy, so the only way to defeat the debt was to tackle it head on. After getting my wife on board, we started on the long, deliberate path to freedom from our debt. Soon after, I discovered The Motley Fool. After spinning our wheels a bit at the start of our debt payoff quest, the Fool provided me with invaluable information and guidance without which I'm not sure we'd be at this point today.

I can't begin to guess how many people I've turned on to the Fool since I started turning my debt situation around. I have become known, to a degree, as the "debt wizard" around the office and among friends, many of whom have since sought my advice about getting out of debt. I would NEVER have imagined that I would ever even be out of debt, much less be looked to as a consultant on debt reduction! Thank you for putting me in that position.

In terms of how we've actually done this, it's really quite simple. Here are a few basic points:

1- After much denial, I sat down with my wife and explained to her the gravity of the situation we were in. My wife had, until then, been quite the free-spender. She listened, and subsequently became an amazing partner in the battle. I think if you are married you have to do this as a partnership.

2- Once we confronted the problem, we almost completely stopped using credit cards. It was the first step to seeing our balances actually decrease for the first time in a long while. Plus, our debt to income ratio had become so out of whack that after a long period of receiving low intro-rate offers, they dried up and we were stuck with high balances at high rates. It wasn't until we started knocking down the balances that, way down the road, we started getting intro-rate offers again. By this time, I had learned how to play the game and used them to MY advantage.

3- After trying other methods, I finally locked onto the snowball method, which is without question the best way to not only see results in debt reduction, but also the best way to FEEL that you are making some headway. At one point we actually had as many as eight credit cards at one time, all with significant balances. The snowball method enabled me to pay them down, pay them off, and systematically cancel each card as they bit the dust, one by one.

4- We became very conscious of what we were buying. We really tried to make every purchase a case of, "Do I really NEED this, or do I just WANT this?" We ate out at restaurants far less. Saw far less movies. Generally deprived ourselves of many pleasures, big and small. It had to be done. No pain, no gain was never more true than it has been for us over these last years. I have to admit that my wife is now spending a little more freely again than I'd like, but we're paying it off every month, and I try to reel her back in when I feel like she's losing control. I, on the other hand, have had this new way of thinking so ingrained into my brain that I have, for better or worse, become something of a tightwad.

5- Without question, one major way we paid down the debt has been to work...and work...and work. LOTS of overtime for me at every opportunity. My wife tutors students on the side and teaches Sunday school. Every little bit helps.

Something else I should mention is that during these debt paying years, I also lost my job at one point (3/98) and took a 40% cut in pay when I started my current job. We also had our first child, who is the joy of our lives. He is now 21 months old, and will no doubt be educated in the ways of debt-free living as he grows up. It's something I wish I had been taught. My parents, like many of their generation, had lots of credit debt and were always playing catch-up.

I have to tell you that getting out of this debt situation is the single-most rewarding financial experience of my life . I am not really an emotional type, but when I think of what we have achieved, it almost brings me to tears. When I just think about the strength it takes to achieve this...I never thought I had it in me....but here we are. Amazing.

I know I've said this in previous posts, but I want to again thank the Motley Fool for the information it provides and for all of the wonderful people it has brought together on this board, without whose knowledge and insight this task would have been incredibly difficult at best, and impossible at worst. Who would have ever thought that being Foolish would be such a good thing? Even though we have reached our goal, I won't stop reading this message board, and I won't stop posting or responding to posts from time to time if I feel I have something of value to share. No matter how much I think I've already learned, I always learn something new when I'm here. Thanks again to all and to those still fighting the good fight: Hang in there and you'll be writing your own "victory post" in due time!!


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