A 50-year-old man recently made the news after he paid off $65,000 in debt in only 15 months. On the outside, the man appeared as if he had all his finances settled. He went on a lot of vacations, he had a good job in the financial industry and he had a large condo. However, he also had a lot of debt.
Most of his debt was tied to credit cards, but he also had medical bills and student loans. Worried that he and his wife would not be able to balance the bills and stay financially afloat, the man created a strategy to pay it all off, and fast. One way they were able to do it was to cut their monthly expenses to free up more money to pay off debt. For example, they changed their diet and started buying cheaper food. They went from spending $500 monthly on food to just $300 on food.
They had a garage sale too, which made them about $1,500. And they reduced their entertainment costs by $1,000 annually. They also sold their vehicle for about $3,000. They worked extra hours as well and used the money to pay off their debts. Downsizing was another secret to saving money. They sold their condo, and bought a smaller one, bringing their living expenses from $1,300 monthly to $685 monthly. Some of the money from their home sale was used to pay down their debt as well.
The man said that selling off a big-ticket item -- in their case, their home -- was the key to getting out of debt fast. He recommends that anyone who has the ability to take advantage of selling off something big should do it, because without selling their home, he would have taken much longer than just 15 months to get out of their $65,000 in debt.
No everyone Arizona resident will have the income or finances to support paying off their debts, ever. This is where bankruptcy can play an important role in resolving one's debt problems. Bankruptcy may not be the answer for all situations, but if it is applicable to an Arizona borrower's situation, it can be enormously helpful.
Source: Market Watch, "How I paid off $65,000 in debt in just 15 months," Catey Hill, May 14, 2016