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How I Paid Off $158169 in Debt

I was just trying to keep up with everybody else. Im a single parent to three kids, ages 10, 14, and 16. I was always spending extra on Christmas and on birthdays. Also, growing up, I didnt have new clothes and new shoes at the start of every school year. But I wanted to make sure my kids always did.

Looking back, I wish I would have known not to rely on credit cards. I wish I would have known that its okay to keep your car for four or more years, as long as you maintain it.

I started going into debt when my first daughter was born, 16 years ago. I remember I had to get a furniture loan. By 2006, I had $55,848 in credit card debt and $76,711 in car loans. Then there were the personal loans. I had a consolidation loan that I used to pay off my credit cards. Altogether, it came out to $179,625.

I wasnt aware of how much debt I was in. The turning point for me was when I hit the 10-year point in the Marines, and I saw other people around me retiring. I wanted to sit down and see where I was at. And thats when I realized I didnt want to retire in debt. I didnt want to be that person.

At the time, I had a Toyota Sequoia, and I couldnt make payments on it. I knew I was in way over my head.

Even though I had three kids, we didnt need that big truck. It was going to put my family at a financial challenge. So I spoke to a lady at my church, and I said, I have this truck, and Im going to trade it in for something smaller. And she said, I always wanted a Toyota Sequoia. I sold it to her and got into a Corolla instead.

I realized buying that truck was a bad choice, and I knew I needed to develop better habits from there. That was my first step forward.

Now I put roughly $2,100 a month toward my debt.

For the rest of my income, I use the envelope system. Before I get paid, I do my budget. Then I have 13 envelopesone for groceries, one for clothes and shoes, one for charity, one for dining out, one for gas, and so on. I go to the bank, take the money out, and divide it between the envelopes.

I dont spend anything that doesnt come out of those envelopes. Debit cards are nice, but swiping is less emotional. Cash makes me more aware of what Im spending my money on. If I run out of money for something that month, I dont buy it. But Ive never run out of money for something importantnow Im more aware of how much Im spending.