How I Paid Off $35,000 of Debt Over Lunch

Alden Wicker
Posted

My Debt Aha! Moment

We brought lunch from home (of course) and met in a conference room to share our financial positions. We were honest to a fault, and most importantly, we never judged each other—no one’s debt made them good or bad.

This was the turning point for me.

I remember looking at a spreadsheet of my school loans, credit cards and interest payments, and thinking, “This is the first time that I’ve actually seen the big picture.” It was like looking in a mirror—not only was my credit card debt a huge problem, but I was also nowhere near being out of it.

But it was a relief to see that everyone had problems. One girl had a larger salary, but she also had a lot more credit card debt, which helped me to realize that if we could help her, we could help me, too.

CHECKLIST: I Want to Create a Plan for Paying Off Debt

How Our Money Lunch Club Worked

We set budgets. We created emergency savings. We read articles and books, and then copied pages for each other. We even called credit card companies to lower our interest rates.

But our top priority was planning ahead. Although I couldn’t be there with my Money Lunch friend at an upcoming bachelorette party, we could come up with a plan beforehand to prevent her from spending too much.

“I needed a reality check on what I could afford because I wanted to play at the level of people who had more money.”

We made it okay to say, “You know, you don’t really need that,” when everyone else was saying, “That’s so cute! You have to have it!”

You need that emotional preparation and support because the real world wants to test you. And knowing that we had to share things with each other held us accountable because we were going to ask how much she spent at that bachelorette.

I personally needed a reality check all of the time on what I could afford because I always wanted to play at the level of people who had more money—our Money Lunch meetings brought me down to earth.

RELATED: How to Combat “Money Comparisonitis”

  • Guest

    This was one of the best articles I have read on this site! Thank you for sharing your story.

  • evr

    this piece makes me feel motivated and inspired on several levels

  • Cc11782n

    One of my friends and I do this! We have various goals – financial, and health related, and to keep eachother honest and to really make progress we have daily emails where we detail our progress – and our shortcomings. We don’t get down on eachother though – we just try to encourage and motivate. Our stories are so similar to Erin’s, and it took us both awhile to realize (me especially) that there is a light at the end of that tunnel and we’ll make it there! Thank you for sharing your story!

  • Andrea

    Great story! Really inspiring and doable, too. Thank you! 

  • Alison

    I don’t even know you and this story makes me proud of you!  I love that you found a group of supportive women.  I also reached a point in my life where I realized I had to live my life, not someone elses and since then my favorite quote is “comparison is the theif of joy”.

  • VCA

    i love inspiring articles like these, i need more insipiring articles like these!!

    Thanks for sharing your story……LV, more similar articles please!

  • lizlemony

    I LOVE the idea of “secret squirrel saving.” Going to try that one! Just have to think of an ideal place in my apt. to stash it…

  • Munozyoshi

    Love reading these stories. I finished college with about 30K in student loans and 2K in credit debt. Over a year or so I went up to about 7K in credit debt and my student debt went down to 27K. I put my debt in a spreadsheet and I too got a look at the big picture. I was surprised how much I wasted on food and outings with friends. One year later I’ve managed to pay off all my credit debt and lower my student debt to 20K. It’s a single loan that is consolidated with low interest. I’m still getting there but having lower debts is a great feeling.

  • Lailarkhalili

    Looks like I need to start a money lunch group with some of my college friends. Read: we’re in college! Thanks for the article. It’s fantastic.

  • Tammy A Hsu

    This is one of the best articles you’ve ever posted!!

  • guest

    this is a great article!! i’m always shying away from looking my debt square in the face, and i know i need to soon because my husband and i are trying to refinance and eventually buy a new house. i need the courage to look my debt square in the face, and let it know that i will conquer it just like erin did! thanks for this!

  • Just Jill

    Thank you so much for this article! I am just like you, having a hard time finding financial advice that isn’t for people who make $60,000 year, and this was so inspiring! Thank you!! Fantastic job!

  • Kretek

    I’m having my 26,000 in student loans consolidated, I owe my parents $2,600 and I owe the credit card companies $9,200 and I got the bad news that in the next 2 months I need a crown on one of my teeth. It’ll be a slow crawl out of debt, but I actually can afford to put $500 into the debt pool every month after paying off my bills and after loading $300 in my savings. I’m not bad off but I made some bad financial decisions. Time to set them right.

    • Rondavue66

      If you take the extra money and pay it towards your smallest debt and then once it’s paid for take all that money and pay the next. It works to quickly pay things off and helps to motivate you seeing things gone. The snowball affect. That’s how I did and I had over $28,000 of debt paid in 9 months on $49,000. I didn’t have a life for 9 months but I’ve been debt free over 3 1/2 yrs now.

  • Maggie

    Thank you for a great article! Now THIS is something I can relate to, my income and debt picture are similar and I see that she used simple strategies that anyone can do to get hers under control. I wanted to cry when I received my tax statement and saw that I paid only interest on my student loans last year, not a penny of principle. This gives me the hope I needed.

    • Jason

      I was there last year and I felt awful too.  I called my student loan bank and I asked them if they could lower my interest rate.  They told me that if I allowed them access to my checking account so they could take the monthly payment directly from my bank account on a monthly basis (vs sending a check) they would lower my interest by 1%.  I did it and now I’m seeing progress on my loan balance.    And call your student loan administrator too!  you have nothing to lose, worst case scenario they will say no.  Most importantly, don’t give up, keep chipping away, it will get better.

  • amp

    Thank you– great article!  Less sexy than the articles about  folks with huge salaries who pay off their debt but much more helpful and inspiring for us folks with normal salaries.

    • Jason

      exactly what I was thinking!

  • Yvonne Law

    I could really relate to this – after I got my first job, I didn’t have a clear picture of my financial situation and started spending, and racked up $6,000 of credit card on top of the $2,000 that I already had built up from my last year of college. I’m already working on getting out of debt, and this is a great motivator – I can do it too!

    • http://www.incomesolutions.com.au/ Amy

      Yvonne, I think everyone is guilty of this. I’ve seen many couples who just haven’t sat down and actually done a budget and looked at what they are spending their money on and ended up in much worse debt than that!!

  • Jason

    Bravo!  great story, you have a lot of discipline and courage. Thanks for sharing your story with us

  • http://twitter.com/SenseofCents Michelle

    Great story! Very inspiring and motivating.

  • Thriftywriter

    The fact that this is someone who didn’t make much money and was still able to pay off her debts (or almost all of them) makes this inspiring!  I hope the editors are taking note of all the positive comments and will provide more articles like this.

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  • Mara

    Awesome article!  Kudos to you for being so responsible and building a group of supportive women.  What a great idea.  Sometimes I think we can all feel alone in financial turmoil, but it is so common.  I loved the tips you gave as well!  

  • PalB.

    Because of my brought up, I had the judgement of deciding between the things that I need and things that I want very early on. Thank you for reaffirming what a blessing it is in disguise to prevent me from the situations faced by you. Good luck for paying off the remaining debt!

  • Natalie

    Thank you, thank you!! You proved that slow is how most people pay off their debt, not in one year. I’m a single parent and I have restored hope that I will one day be out of debt. $45 at the end of the week? Eating bread n butter for dinner? I can so empathize. Thank you for sharing your story!

  • Mara

    good job! :)  

  • Swaters

    It’s a very timely article for this 72 year old lady.  Even we older gals get in trouble sometime, and I desperately needed some help in getting my credit card paid off.  Thanks so much for sharing your story – and pray for me that I can get my card paid off, too, and then to stay OUT OF DEBT!!

  • Fivestarhairstudio

    I love this article!!! it inspired me, Thanks

  • Guest

    This article was awesome. I’m just starting on my path to no debt so-any stories of people achieving it are really motivating.

  • Mindyterw

    this is a great story. I am 70 and so is my husband.  we are retired and no better than being in credit cartd debt.  But we are and it is not a good feeling.  We made a plan to pay it all off in 2 years.  I feel good about it and I know we can do it.  We do the same and talk about what we need and want and we have really been sticking to a budget…
    Thanks for this article…

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    I really enjoyed this story. I wish I had friends I could share my money issues with. None of my friends share my problem. Some of my friends are in fact people I work with. 95% of my friends just actually left today for a cruise and I wasn’t able to go because I couldn’t afford it because of my credit card and student loan debt. Every time I have myself set up on a track to pay my debt off something comes up and I get set off track. Some of my friends make my feel bad because I cannot always participate in things they do. They go out to eat at expensive places, or like to do expensive things. I try to come up with cheap things for us to do and either no one wants to do them or everyone suggests something else and it turns into something expensive, then i’m no longer able to do the plans because I cant afford it. Most of my friends have always had their parents around to help with things and a majority of them graduated from school with no student loans thanks to their parents or some got pell grants to go to school. I keep trying and hope some day it will all pay off and that I can finally be debt free.

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  • Juanita

    Thank you for sharing! I escaped with no loans and little debt after my PhD but somehow this gave me an excuse to go wild on borrowing. Just like you, I wanted to have it all. The maximum credit card debt I had was 46K+ Incredibly within 2 years I was able to bring it down to 19K. But then the recession hit and i’ve been laid off 3 times already. I’m anxious to start working again in 2 weeks but my salary is half of what it used to be. I’m happy to say that after all of that my debt is only still at 25K and most of this is “new” debt (within 5 years) and was able to buy a house. and I do have alot of hope and very good planning now. I kind of think that i’m better off now that I’ve experienced this. I look at money and lifestyle in an entirely different way now. I have everthing I need though, in fact, I’m happy to get rid of stuff.

  • guest

    So you did not pay $35,000 of debt off over lunch…..Kind of misleading title.

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