It’s been a crazy few years, but I finally paid off $22,000 in high-interest debt. Three years ago, I was drowning in credit card bills. I’d max out one card, then open another. Groceries and rent ate up most of my money. Eventually, I took out a personal loan, paid off a card, and then maxed it again.
In February 2023, I moved back with my mom to save money. Then, I ended up in the hospital in August and got stuck with $5,000 in medical bills. By that time, my debt had piled up to $22,000, and my credit cards were nearly maxed. I was paying $700 a month just in minimum payments, and it was overwhelming.
I tried getting help from debt relief services, but because I had a new job making $45k a year and wasn’t paying rent, they told me I didn’t qualify. So I went all-in on budgeting, lived cheaply, and paid off everything on my own over 13 months. It was rough, but I was able to throw $1,000 to $1,200 a month at the debt. Eventually, I got a raise, and it became easier to put $1,500 to $2,000 a month toward it. Even my medical bills went on a credit card, but I took care of those too.
I made my last payment on a personal loan, and now all my credit cards, once maxed, are at $0. It feels amazing to have wiped out $22,000 of high-interest debt.
Thanks for sharing your story! Dealing with financial stuff is tough, especially when we’re young and making mistakes. Now that you’re free of that debt, think about saving and maybe starting a Roth IRA. Balance between saving, investing, and enjoying life. You deserve it after all that hard work!
@Shiloh
Totally agree! I just opened a Roth IRA a few weeks ago. Now I’m focusing on splitting money between investing and building up an emergency fund. Also, I’ve got some student loans I’ll tackle soon, but compared to the 30% APR on my credit cards, they don’t feel so bad!
@Hadi
Same here! I had a similar situation with private loans during college. Thankfully, we dodged a bullet back then. Federal loans do grow slowly, but it’s still good to chip away at them. If you’re interested in IRAs, I’d recommend looking into dividend stocks like SCHD, JEPQ, and SPYI. They can be great for passive income, but definitely research before diving in.
One thing I forgot to mention — every credit card had an APR between 27% to 30%. I was barely making a dent in the principal because the interest was so high. My personal loan had a 15% APR, and I was paying a lot in interest upfront due to how loan amortization works.
I did something similar to the debt snowball method, and since all the interest rates were pretty much the same, it ended up being a mix of both snowball and avalanche methods.
Thanks! I used the Undebt.it calculator to plan things out and used RocketMoney to budget.
In terms of behavior, I just became super focused on saving as much money as possible. I stopped going out to eat, and if I did, it was fast food using coupons. I avoided spending on games or entertainment and instead found free shows or started reading more. Sacrificing little things helped me a lot.
