Jane soon had the smallest debt in the pile paid off and was able to apply those funds to the $400 debt, throwing every single spare cent she had at the mess. She also started making plans to get rid of her satellite when the extended contract ended and replace it with something much cheaper, something she should have done a long time ago.
While she worked the debt snowball, she put what she could in savings so she could stop Bank of America from feeing her tiny savings account to death. Then she worked little by little to get a baby emergency fund of $1000 in place. Dave recommends doing one thing at a time, but Jane was afraid of getting sued by the companies she was ignoring, so, she needed to get out of the rest of this debt as soon as possible!
Anywhere she could cut back, anything she could sell, she did it and threw it at the debt. She even started “flipping” computers. You see, years earlier, Jane purchased a defunct convertible laptop off eBay, fixed it, and resold it for a profit. Jane knows her computers. She didn’t want to do it on purpose because of the risk involved, but when it comes to getting out of debt, a person has to get uncomfortable and do some things they really rather not do. So a-hunting for deals on eBay she went.
There was no vacation for Jane that year. She introduced herself to the “staycation.” It wasn’t as much fun, but Jane couldn’t afford to have fun. Heck! She was probably still paying for her last two vacations!
After the first two cards, Jane deviated just a bit from the snowball to pay off the Line of Credit next. The balance was a little higher than two of her cards, but the minimum payment was almost twice as much; it was killing her flow. Jane got to selling and flipping computers, harder and more aggressively than EVER before and paid off the line of credit in two months. Finally, her own computer was paid for, and she moved on to the two smaller credit cards.
After a few months, she had those paid off and cancelled as well. Intensity serves a person well when it comes to getting out of debt. Jane had changed, and she would do whatever to took to get rid of this mess as fast as possible. And now, she had one card left. The big one. Namely, her stupid car tax. Because her once stellar credit was now shot, after she made that first big payment, instead of raising her limit as they had so often the past, they lowered it!
But who cared? Jane was never going to be indebted to them again. And frankly, she was relieved they only lowered her limit and didn’t raise her interest rate!
There was no rest for Jane. She was a selling machine! In three months, the last of her credit card debt was paid off. HALLELUJAH!!! But Jane couldn’t celebrate quite yet. She had three cards that had been charged off while she was paying everything else down. She was literally about 3 weeks too late to work with the creditors — her accounts had now been forwarded to collection agencies, and a whole new set of numbers started to show up on her phone. She got some nice letters as well. Of course, if she had answered her phone, she would have known this and possibly could have stopped it.
Jane stayed gazelle intense and piled up as much money as she could, selling so much stuff it made her ill. At this point, she was so used to people calling her, it didn’t even stress her out anymore! No. What stressed her out was that time was running out. She didn’t want to wait for them to sue her! She wanted to take care of things as soon as possible.
When she thought she had enough money to satisfy her remaining debts, she unblocked all the numbers and waited with fraying nerves for them to call. It didn’t take long. In one week, she managed to settle with the remaining credit card companies for just under what she had saved. The collectors’ responses ranged from friendly to pushy to super stern, but the stern one was actually pretty nice to Jane once they realized she was telling the truth! They wanted as much money as they could get without suing, and according to that particular collector, Jane was about one week from getting sued by them! Yikes!
Now that this credit card ordeal was over, Jane had one more debt to get off her back: her student loan. A couple of weeks later, she changed the address online back to her own and surprised her father by telling him she was paying it off by the end of the month and to ignore any bills that may come his way. Jane was finally starting to see where Dave Ramsey was coming from: how the borrower really IS slave to lender, and how much of her hard-earned money was going to the banks: nearly all of it! But now, Jane was finally getting her freedom – and her money – back.
About one year after she started paying things off, Jane was finally DEBT-FREE!!