You did WHAT to pay off your debt?


You did WHAT to pay off your debt?
You did WHAT to pay off your debt?

It's easy to become discouraged or even despondent when confronting daunting debts. When you can't pay them down quickly with normal efforts, it can feel as if they'll be with you forever.

However, with dedication and imagination, it's possible to delete even the biggest balances in record time. Take it from the following six people who refused to let their financial obligations keep them down.

Crazy? Or commendable? You decide.

John Schmoll

1. Sold plasma and ate rejected food. Personal finance blogger John Schmoll, who runs the money tips website FrugalRules, graduated from college about 15 years ago with roughly $25,000 in credit card debt and $20,000 in student loans.

Not one to be content making minimum payments, Schmoll took radical measures to satisfy his creditors. "I sold my television and high school class ring to get extra money to throw at the debt," he says. The TV in particular was a sacrifice because, "it was the last pleasure kind of item I had at the time." Still, he hawked them both at a pawnshop, receiving just $300 for the items, which he applied to his debt.

And then there was his unusual daily diet. To cut costs, "I ate nothing but stale bagels and reject frozen pizzas," says Schmoll, explaining that his friend's mother worked at a frozen pizza factory and could get boxes of them for about $1. This way he was able to slash his grocery bill to under $100 per month.

Additionally, Schmoll sold plasma three times a week for four months to earn more cash while also working as much as he could to scrape up extra money to throw at his balances. "I'd work 80- to 90-hour weeks," says Schmoll, who is now (and not surprisingly) firmly in the black.

I mystery shopped, wrote online, managed websites, answered online surveys, sold items and more. I was working around 100 hours a week, including my full-time job, in order to make this possible.

-- Michelle Schroeder-Gardner
Andrew Joseuweit

2. Migrated to Malaysia. Many people daydream of running away from their money messes, especially to an exotic locale. That's what Andrew Josuweit, CEO of StudentLoanHero, did. Yet escaping his troubles wasn't his motive. Dealing with them was. 

When Josuweit graduated from college, his student loans totaled nearly $104,000. Living in New York meant cash was tight. "It was 2009, and the job market was terrible," says Josuweit. He defaulted on his loans and fees began to accumulate. Recognizing it would take decades to pay the balances off living in the U.S., he and a friend packed up and moved to Kuala Lumpur, Malaysia.

"I wanted to be in control of my financial freedom," says Josuweit. "No limits. In Asia, we could live on $1,000 a month or less." He began to make a dent in his balances (they're now down by about $20,000) and was inspired to start, a company that helps graduates organize, track and refinance their college-related obligations.

Upon return to the States, he chose to live in Austin, Texas, for its low cost of living rather than return to New York. "Here I can save $10,000 a year and that's all going to student loans." His message to other underwater millennials: "Live like a student again. Don't buy big-ticket items such a new car. Trim fat! Increase income. People are baffled by that, but it's reality."

Christina Ernst

3. Sent every penny of her income to debt and bought nothing new. Seven years ago, Christina Ernst, from Sautee Nacoochee, Georgia, owed $80,000 to credit card companies -- money she used to get her travel agency, VIP Southern Tours, off the ground.

"It was very stressful for me, as the owner," says Ernst. "I stopped paying myself and became creative. I attacked the credit card debts and began purchasing items for the business secondhand or off eBay. I began selling items from the office as well on Craigslist."

While she and her husband were scraping by on bare bones, Ernst learned she was pregnant. "It was really, really hard," Ernst says. "I became less shy about asking friends for maternity clothes." Though she could have filed for bankruptcy, she refused, and instead survived on her husband's extremely low income.

"I realized I didn't need everything," says Ernst. By acquiring all business and baby gear secondhand and living on practically nothing, she reduced the balance to $22,000. She recently transferred that balance to 0 percent APR accounts. "My goal is to have it paid off by the end of next year," she says.

Michelle Schroeder-Gardner

4. Toiled 100-hour work weeks. The typical 10-year student loan repayment plan simply wasn't good enough for Michelle Schroeder-Gardner, whose blog MakingSenseofCents addresses consumer finance and lifestyle conundrums. Instead, the Colorado-based Schroeder-Gardner decided to eliminate her $40,000 loan balance in a fraction of that time.

"I have two undergraduate degrees and one master's, which led to a lot of debt!" says Schroeder-Gardner, who borrowed for her education despite working her way through college. "I wasn't thinking and didn't pay toward my student loans. I wasted my money on restaurants and clothing."

Recognizing that she could have managed her finances more effectively, Schroeder-Gardner transformed into a moneymaking machine by side-hustling. She took advantage of every available opportunity. "I mystery shopped, wrote online, managed websites, answered online surveys, sold items and more. I was working around 100 hours a week, including my full-time job, in order to make this possible." All that working worked. Schroeder-Gardner cleared her hurdle in an astonishing seven months.

I rented out my own home as a vacation rental and lived elsewhere for free by house and pet-sitting.

-- Kelly Hayes-Raitt
Kelly Hayes-Raitt

5. Left her home and pet sat. When Los Angeles resident Kelly Hayes-Raitt found herself $90,000 in arrears, her struggle was real. "It was the darkest time of my life. I had just turned 40, had just bought my first house and was single."

A lifelong activist, Hayes-Raitt is the former executive director of the Coalition for Clean Air, co-founder of Heal the Bay, worked on then-Gov. Gray Davis' memorial for California's victims of the Sept. 11 terrorist attacks and moderated Hillary Clinton's "What Every Woman Should Know About Social Security" national teleconference. 

Rather than give up, she regrouped and made some drastic changes: "I rented out my own home as a vacation rental and lived elsewhere for free by house and pet sitting," says Hayes-Raitt.

She also negotiated a home loan modification, which adjusted the terms of her mortgage to reduce the payment. As part of the negotiation process, she stopped making payments, a decision resulting in credit rating damage. "Knowingly whacking my credit score was pretty extreme for me," says Hayes-Raitt.

Her plan worked. "It took about 10 years to pay off all my debt," says Hayes-Raitt, "and you know what? Turns out the 'extremes' weren't so extreme. I fell into a lifestyle I prefer. My life is simpler now. I have a chance to live a life I'd always dreamed of. I now housesit around the world. This summer, I was in Malaysia for nine weeks and Japan for two. And I have a column I enjoy writing for which I am paid."

Margarita Simone

6. Stopped shopping and started selling. Margarita Simone is a health care technology specialist living in the Washington, D.C., area, and a self-professed girly girl. But when she left college with $40,000 in school loans, she made an abrupt sacrifice.

"I love things. I love clothes," says Simone. But instead of buying, she sold, overhauling her closet into a revenue-generating operation. "I used the opportunity to learn how to sell on eBay and use consignment apps. I sold quite a number of shoes, purses and clothes that I had not worn in at least a year."

Simone has repaid $35,000 in four and a half years. Not buying clothing showed her how resourceful she is. More, she's gained a new level of confidence that has inspired her to return to school for an MBA. As for her wardrobe, she's reformed. "What I didn't realize was just how little I needed," says Simone. "We accumulate things, and feel we need to buy this and that to be happy, but we don't. "

Now it's your turn: What will you give up or do more of to get ahead of debt?

See related: How credit cards saved my vacation, Over your head in debt? 5 extreme budgeting ideas

Published: September 2, 2015

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