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I paid off $240,000 in 3 years by not being an idiot with my money. I got on a budget with my wife. We cut up our credit cards because we always double or tripl

I paid off $240,000 in 3 years by not being an idiot with my money. I got on a budget with my wife. We cut up our credit cards because we always double or triple spent our money. We budgeted for things like Christmas. We followed Dave Ramsey's plan. We're 2 months from paying off our house now. Edit - I went back and checked, it was $140k.

kace91 6y ago
I mean, that's still contingent on having a decent salary relative to the amount of debt - I'm assuming it didn't happen with a couple of ~30k/year salaries.
- abfan1127 6y ago
  I was a sole provider making under $100k. Edit: salary. We were receiving small bonuses ($10k) at the time. but we learned to keep our expenses down, and every bonus we did receive we rolled right into debt before spending it on stupid crap.
  - wffurr 6y ago
    Something is off with the math here. I don't doubt your story, but perhaps your numbers are a bit off? 240k over 3 years is $80k/yr in principal alone, substantially more with interest. If your post-tax take-home was $95k, that leaves only $15k/yr for living expenses for your household, which is extremely low. Maybe that's possible with a lot of beans and rice, paid off used cars, and second-hand clothes and such. Seems like part of the debt you are paying down is a mortgage, so that means your housing cost at least is part of the $80k/yr debt service. Still doesn't leave much for transportation (often second biggest expense for a household) and the rest.
    - abfan1127 6y ago
      no, you may be right (it was a few years ago). It may have been 3.5 or 4 years. I did receive small raises over the years, but we kept our budget fixed. I did receive a big windfall near the end from a company acquisition ($40k iirc). But at the rate were were paying stuff off, it brought it in ~6 months. The math still shocks me every time I do it.
      - theplague42 6y ago
        So it was really around 100k over four years with the last 40k covered by your acquisition earnings. So 25k a year on a 100k salary (pre/post-tax?). Which is a lot less than 80k a year. Still impressive, and kudos, but let's not pretend that it's anywhere the same. That's a difference of two whole median incomes per year.
        astura 6y ago
        Jeez, I made $99k last year and saved more than $25k and I AM an idiot with my money (I consider my lifestyle to be lavish). So I suspect it's more the "making a lot of money" part instead of the "not being an idiot with my money" part. Absolutely nobody is going to "not be an idiot" themselves to a six figure loan payoff in a few years on a 30k/year salary.
  - bavent 6y ago
    This math doesn't check out. $240k for three years is $80k/year. Assuming you are already factoring interest in. So you and your wife lived off less than $20k a year? Where?
    - abfan1127 6y ago
      Arizona
    - folkrav 6y ago
      Must have had extremely cheap rent, be very frugal when it comes to eating and basically any expense, really. In rent alone I pay $10.5k/year (with what most people here extremely cheap rent). When I still was in school living off school loans, our frugal weekly groceries (almost no meat, very rare, mostly fresh produce in discount markets) came out around $80 a week, so about $4-5k/year. We're already at $15k. This leaves $5k for literally everything else. I'd wager no kids, no car payments, no cell phone outside maybe prepaid, basically nothing in utilities, buying used clothing, no appliances that broke, no internet above basic, next to nothing in terms of entertainment expenses, etc. Quick mental math keeping the strict minimum from what I pay right now and I'm already over $20k. This is weirdly cheap. And honestly, if the numbers are right, good on him for having the discipline to do it, but this sounds like a rather awful three years.
jankeymeulen 6y ago
Congratulations for that! However, you also paid of that $240k by earning at least $80k / year.
rfrey 6y ago
That means you earned more than $80,000 post-tax income surplus to your needs. That surplus is a third more than the US average total household pre-tax income.
- abfan1127 6y ago
  You're right. But I also changed my mentality. We became intentional with our money. Its amazing how you can find money in a budget to put towards debt. Its also how you stay out of debt going forward. You learn to prioritize your spending.
  - Privacy846 6y ago
    It’s amazing what you can do when you earn way more than the median household.
    - war1025 6y ago
      Yea. You can get $240k in debt. Good luck getting anyone to lend you that kind of money if you're actually poor. Someone who is able to get deeply in debt basically by definition has access to money. They would not be granted loans otherwise.
      - abfan1127 6y ago
        the largest portion of my debt was student loans (over half), which anyone can get in the US (not sure about other countries).
    - greyhair 6y ago
      This is one of the hardest things to explain to people. Here is a thought experiment. Lets assume that the minimum required to live in a given place is $20K. So now you have two people, one makes $30K, the other makes $40K. How much more does the second one make compared to the first? Twice as much. At $30K, you have $10K disposable. At $40K, you have $20K disposable. And someone making $60K is making four times the disposable compared to $30K. Once you get above cost of living, everything gets easier.
stevewodil 6y ago
>by not being an idiot with my money It was also due to the fact that you were making $80k/year ABOVE your living expenses.
- abfan1127 6y ago
  Living expenses is a flexible item. You learn to keep your living expenses down.
  - doytch 6y ago
    Yes but it's a touch difficult to keep living expenses below $0, which most people in the developed - let alone developing - world would need to do on their salaries to save the extra $80k/year.
    - abfan1127 6y ago
      ha, yes. looking back, I don't know how we did it as fast as we did. we kept our expenses low (20-25k/year low) and poured every dollar into the debt. We didn't live in a fancy house or have new cars (beyond when we got in to it with the new car loans).
  - ChrisRR 6y ago
    Living expenses are only flexible when you have the money to be flexible. If you're on a low wage, maybe with some kids. You're buying whatever inefficient car, low quality clothes that need replacing more often, a house near your child's school. Having that huge amount of disposable income offers you a lot more luxuries
  - pertymcpert 6y ago
    You're being completely tone deaf to the point that its frustrating to believe that people like you exist.
    - abfan1127 6y ago
      tone deaf to what? That some people have big problems? That those big problems may be bigger than mine? That sometimes solutions to big problems are hard? That sacrifice for some isn't the same for sacrifice for others? Or that some people's problems are as big as they are because they fail to recognize the change needed to solve them, or are unwilling to make that change? That often times, people fail to recognize the change needed because it first requires them to acknowledge and take responsibility.
Bakary 6y ago
How much did you tally as living expenses during that period? As a rough estimate
- abfan1127 6y ago
  it was 10ish years ago, so this is a guess... Mortgage was $750ish water/electric $200 phones/internet $100 food $500-600 fuel $25 insurances ??? $100-200 maybe $1500-2000 a month. $20-25k year in real expenses.
cxr 6y ago
Heads up: this is a common pattern of expression that makes you come off as really obnoxious to people who will never tell you that that's what's happening. If you can't understand why people have a problem with this, here's the explanation: there are almost certainly smarter people than you who happened to be more unlucky than you. You were lucky-but-stupid before, so you stopped being so stupid, and now your messages carry the undertone that anyone else is some variation of the person you were back in the stage before you wised up. It's a view that doesn't provide any space for people who were wise from the beginning. When you say things like what you said above, you're not highlighting how smart you are or getting down to how dumb other people are; you're just highlighting how lucky you were to even have the circumstances where you were allowed to be that stupid in the beginning.
- fnord77 6y ago
  Do you do social skills coaching? Plenty of tone deaf people (myself included) who would gladly pay for this.
  - deleted 6y ago
    [deleted]
  - ambicapter 6y ago
    Seriously, what an amazing comment. Imagine if we had someone like this in every discussion on the internet.
- abfan1127 6y ago
  At the risk of more down votes, I'll disagree with you. There are certainly smarter people than me who are less lucky than me. However, its a much smaller subset than many would believe. Many claim unlucky when in reality their luck is a consequence of their past choices. They've taken risks and those risks didn't work out.
  - war1025 6y ago
    You can only get downvoted on a post to -4, fyi. I stopped caring nearly as much about being agreeable once I learned that. For what it's worth, congrats on what you did. I'm in a similar position and I completely agree that for the majority of people here it wouldn't take anything beyond stopping making bad choices.
ChrisRR 6y ago
What the hell? So you're literally earning $80k above your living expenses. Waaaaaay above average I'd be more surprised if you couldn't pay that sort of money off Re your edit: I'm even more sceptical now. Your figures were off by a third. I know exactly the value of my mortgage when I took it out. That figure is burned into my mind. I don't know how you could be out by $100,000
- war1025 6y ago
  I don't know what it will add to the conversation, but I thought it was worth adding in my two cents. My family of five is supported by my income (~$100k / year). I get paid weekly. Every Friday, I go into my bank account amd transfer anything in excess of $2000 into the stock market. Some weeks that's quite a bit of money, some weeks it's not so much money. As of a week ago when I did the math, we had $65k more to our names this year than we did one year ago. Probably half of that was money we saved directly, and half was stock market gains, so I guess from a debt payoff perspective maybe that's closer to $30k. But I guess my point is, I don't think it's unreasonable to think a two income household in a higher-income metro than where I live could have $80k/yr in excess income to pay down debt with.
  - alistairSH 6y ago
    It's certainly not unreasonable or even uncommon. But, it's still way above the norm in the US. Median household income in the US is somewhere around $65k/year (before taxes and expenses). Side note - You're only holding $2k in cash for a family of 5? That seems low. Your efforts to invest for the future are commendable, but if you get caught on the bad end of a 2008-style recession, is it enough to keep paying bills?
    - war1025 6y ago
      > You're only holding $2k in cash for a family of 5? I am holding $2k in a checking account. My savings accounts are appropriately sized to get us by for probably six months to a year.
- 6y ago
astura 6y ago
I didn't mean to make this about finance or the ability to pay off debt, it just reminded me so much of the type of writing that is really, really common in "pop finance"-type publications. I wasn't at all saying that I believe that it's impossible to pay off a large debt quickly or that nobody ever does - just that, of course you are going to if you're in such an extraordinary situation. So the entire thing ends up being not very interesting or actionable, yet the title promises that it will be both. I guess there's an audience for it though, because they keep getting published.
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kace91 6y ago

I mean, that's still contingent on having a decent salary relative to the amount of debt - I'm assuming it didn't happen with a couple of ~30k/year salaries.

abfan1127 6y ago
I was a sole provider making under $100k. Edit: salary. We were receiving small bonuses ($10k) at the time. but we learned to keep our expenses down, and every bonus we did receive we rolled right into debt before spending it on stupid crap.
- wffurr 6y ago
  Something is off with the math here. I don't doubt your story, but perhaps your numbers are a bit off? 240k over 3 years is $80k/yr in principal alone, substantially more with interest. If your post-tax take-home was $95k, that leaves only $15k/yr for living expenses for your household, which is extremely low. Maybe that's possible with a lot of beans and rice, paid off used cars, and second-hand clothes and such. Seems like part of the debt you are paying down is a mortgage, so that means your housing cost at least is part of the $80k/yr debt service. Still doesn't leave much for transportation (often second biggest expense for a household) and the rest.
  - abfan1127 6y ago
    no, you may be right (it was a few years ago). It may have been 3.5 or 4 years. I did receive small raises over the years, but we kept our budget fixed. I did receive a big windfall near the end from a company acquisition ($40k iirc). But at the rate were were paying stuff off, it brought it in ~6 months. The math still shocks me every time I do it.
    - theplague42 6y ago
      So it was really around 100k over four years with the last 40k covered by your acquisition earnings. So 25k a year on a 100k salary (pre/post-tax?). Which is a lot less than 80k a year. Still impressive, and kudos, but let's not pretend that it's anywhere the same. That's a difference of two whole median incomes per year.
      - astura 6y ago
        Jeez, I made $99k last year and saved more than $25k and I AM an idiot with my money (I consider my lifestyle to be lavish). So I suspect it's more the "making a lot of money" part instead of the "not being an idiot with my money" part. Absolutely nobody is going to "not be an idiot" themselves to a six figure loan payoff in a few years on a 30k/year salary.
- bavent 6y ago
  This math doesn't check out. $240k for three years is $80k/year. Assuming you are already factoring interest in. So you and your wife lived off less than $20k a year? Where?
  - abfan1127 6y ago
    Arizona
  - folkrav 6y ago
    Must have had extremely cheap rent, be very frugal when it comes to eating and basically any expense, really. In rent alone I pay $10.5k/year (with what most people here extremely cheap rent). When I still was in school living off school loans, our frugal weekly groceries (almost no meat, very rare, mostly fresh produce in discount markets) came out around $80 a week, so about $4-5k/year. We're already at $15k. This leaves $5k for literally everything else. I'd wager no kids, no car payments, no cell phone outside maybe prepaid, basically nothing in utilities, buying used clothing, no appliances that broke, no internet above basic, next to nothing in terms of entertainment expenses, etc. Quick mental math keeping the strict minimum from what I pay right now and I'm already over $20k. This is weirdly cheap. And honestly, if the numbers are right, good on him for having the discipline to do it, but this sounds like a rather awful three years.

jankeymeulen 6y ago

Congratulations for that! However, you also paid of that $240k by earning at least $80k / year.

rfrey 6y ago

That means you earned more than $80,000 post-tax income surplus to your needs. That surplus is a third more than the US average total household pre-tax income.

abfan1127 6y ago
You're right. But I also changed my mentality. We became intentional with our money. Its amazing how you can find money in a budget to put towards debt. Its also how you stay out of debt going forward. You learn to prioritize your spending.
- Privacy846 6y ago
  It’s amazing what you can do when you earn way more than the median household.
  - war1025 6y ago
    Yea. You can get $240k in debt. Good luck getting anyone to lend you that kind of money if you're actually poor. Someone who is able to get deeply in debt basically by definition has access to money. They would not be granted loans otherwise.
    - abfan1127 6y ago
      the largest portion of my debt was student loans (over half), which anyone can get in the US (not sure about other countries).
  - greyhair 6y ago
    This is one of the hardest things to explain to people. Here is a thought experiment. Lets assume that the minimum required to live in a given place is $20K. So now you have two people, one makes $30K, the other makes $40K. How much more does the second one make compared to the first? Twice as much. At $30K, you have $10K disposable. At $40K, you have $20K disposable. And someone making $60K is making four times the disposable compared to $30K. Once you get above cost of living, everything gets easier.

stevewodil 6y ago

>by not being an idiot with my money It was also due to the fact that you were making $80k/year ABOVE your living expenses.

abfan1127 6y ago
Living expenses is a flexible item. You learn to keep your living expenses down.
- doytch 6y ago
  Yes but it's a touch difficult to keep living expenses below $0, which most people in the developed - let alone developing - world would need to do on their salaries to save the extra $80k/year.
  - abfan1127 6y ago
    ha, yes. looking back, I don't know how we did it as fast as we did. we kept our expenses low (20-25k/year low) and poured every dollar into the debt. We didn't live in a fancy house or have new cars (beyond when we got in to it with the new car loans).
- ChrisRR 6y ago
  Living expenses are only flexible when you have the money to be flexible. If you're on a low wage, maybe with some kids. You're buying whatever inefficient car, low quality clothes that need replacing more often, a house near your child's school. Having that huge amount of disposable income offers you a lot more luxuries
- pertymcpert 6y ago
  You're being completely tone deaf to the point that its frustrating to believe that people like you exist.
  - abfan1127 6y ago
    tone deaf to what? That some people have big problems? That those big problems may be bigger than mine? That sometimes solutions to big problems are hard? That sacrifice for some isn't the same for sacrifice for others? Or that some people's problems are as big as they are because they fail to recognize the change needed to solve them, or are unwilling to make that change? That often times, people fail to recognize the change needed because it first requires them to acknowledge and take responsibility.

Bakary 6y ago

How much did you tally as living expenses during that period? As a rough estimate

abfan1127 6y ago
it was 10ish years ago, so this is a guess... Mortgage was $750ish water/electric $200 phones/internet $100 food $500-600 fuel $25 insurances ??? $100-200 maybe $1500-2000 a month. $20-25k year in real expenses.

cxr 6y ago

Heads up: this is a common pattern of expression that makes you come off as really obnoxious to people who will never tell you that that's what's happening. If you can't understand why people have a problem with this, here's the explanation: there are almost certainly smarter people than you who happened to be more unlucky than you. You were lucky-but-stupid before, so you stopped being so stupid, and now your messages carry the undertone that anyone else is some variation of the person you were back in the stage before you wised up. It's a view that doesn't provide any space for people who were wise from the beginning. When you say things like what you said above, you're not highlighting how smart you are or getting down to how dumb other people are; you're just highlighting how lucky you were to even have the circumstances where you were allowed to be that stupid in the beginning.

fnord77 6y ago
Do you do social skills coaching? Plenty of tone deaf people (myself included) who would gladly pay for this.
- deleted 6y ago
  [deleted]
- ambicapter 6y ago
  Seriously, what an amazing comment. Imagine if we had someone like this in every discussion on the internet.
abfan1127 6y ago
At the risk of more down votes, I'll disagree with you. There are certainly smarter people than me who are less lucky than me. However, its a much smaller subset than many would believe. Many claim unlucky when in reality their luck is a consequence of their past choices. They've taken risks and those risks didn't work out.
- war1025 6y ago
  You can only get downvoted on a post to -4, fyi. I stopped caring nearly as much about being agreeable once I learned that. For what it's worth, congrats on what you did. I'm in a similar position and I completely agree that for the majority of people here it wouldn't take anything beyond stopping making bad choices.

ChrisRR 6y ago

What the hell? So you're literally earning $80k above your living expenses. Waaaaaay above average I'd be more surprised if you couldn't pay that sort of money off Re your edit: I'm even more sceptical now. Your figures were off by a third. I know exactly the value of my mortgage when I took it out. That figure is burned into my mind. I don't know how you could be out by $100,000

war1025 6y ago
I don't know what it will add to the conversation, but I thought it was worth adding in my two cents. My family of five is supported by my income (~$100k / year). I get paid weekly. Every Friday, I go into my bank account amd transfer anything in excess of $2000 into the stock market. Some weeks that's quite a bit of money, some weeks it's not so much money. As of a week ago when I did the math, we had $65k more to our names this year than we did one year ago. Probably half of that was money we saved directly, and half was stock market gains, so I guess from a debt payoff perspective maybe that's closer to $30k. But I guess my point is, I don't think it's unreasonable to think a two income household in a higher-income metro than where I live could have $80k/yr in excess income to pay down debt with.
- alistairSH 6y ago
  It's certainly not unreasonable or even uncommon. But, it's still way above the norm in the US. Median household income in the US is somewhere around $65k/year (before taxes and expenses). Side note - You're only holding $2k in cash for a family of 5? That seems low. Your efforts to invest for the future are commendable, but if you get caught on the bad end of a 2008-style recession, is it enough to keep paying bills?
  - war1025 6y ago
    > You're only holding $2k in cash for a family of 5? I am holding $2k in a checking account. My savings accounts are appropriately sized to get us by for probably six months to a year.
6y ago

astura 6y ago

I didn't mean to make this about finance or the ability to pay off debt, it just reminded me so much of the type of writing that is really, really common in "pop finance"-type publications. I wasn't at all saying that I believe that it's impossible to pay off a large debt quickly or that nobody ever does - just that, of course you are going to if you're in such an extraordinary situation. So the entire thing ends up being not very interesting or actionable, yet the title promises that it will be both. I guess there's an audience for it though, because they keep getting published.

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