[Narrator] For many people, debt is a financial reality. In fact, Americans currently hold more than $11 trillion in consumer debt.
[Narrator] Whether it’s a home mortgage, a student loan or a credit card, debt can add up quickly. While loans and credit cards can be a good thing when used responsibly, accumulating too much debt is stressful and can negatively affect long-term goals.
[Narrator] At the age of 23, Jaime Tardy and her husband realized that they’d let their debts get out of hand. In January 2006, the couple added up everything they owed and discovered they were on the hook for $70,000. For Tardy—who earned a six-figure salary as an engineer—it was an eye-opening experience.
[Jaime Tardy] Adding it all up and realizing how young I was and how much I owed was a little ridiculous, but it was facing that reality that already existed, I just didn’t want to look at it.
[Narrator] Tardy and her husband drastically cut spending—getting their grocery budget down to $300 per month through meal planning. They sold extras like old computer monitors, a weight bench and a wine rack on Craigslist for extra money. Tardy began taking on extra assignments at work, so she could earn an additional $50 per day. Her husband also took on side work designing Web pages.
[Tardy] For me, it was all about going, “All right, let’s see how quick we can get this down,” it was almost like a challenge. Instead of making it this horrible, “Oh my gosh, I’m never going to be able to go out ever, ever again I’m in way too much debt,” and making it sort of a sad thing, we sort of made it a challenge.
[Tardy] If I worked really, really hard one month, then we could see a measurable change in our debt, and that was truly inspiring knowing that I’m cutting off at the end of how long it’s going to be.
[Narrator] After a little more than a year, Tardy was debt free. Now she runs the successful blog, Eventual Millionaire, and she’s the author of the forthcoming book, The Eventual Millionaire.
[Narrator] David Weliver, like Tardy, was surprised to find himself in debt.
[Narrator] In college, he took out modest student loans and signed up for credit cards to help pay for textbooks. Soon, he started using his cards to buy luxuries, like pizza.
[David Weliver] I just saw things I wanted and I didn’t have money in my checking account for them, but I had at first one credit card, then two credit cards, and eventually four or five credit cards that had available credit on them and I just spent the money.
[Weliver] As things progressed in the back of my mind I said, oh, well I’m going to be getting a job and earning money when I get out and I’ll just pay it off.
[Narrator] But after he graduated from college in 2003, Weliver struggled to make ends meet after moving to New York City for a job with an entry-level salary. By 2005 he was almost $80,000 in debt with five maxed-out credit cards. In 2006, he was unable to meet minimum payments on his debt. Weliver immediately got a second job working nights and weekends at a coffee shop.
[Narrator] He started the blog Money Under 30 as a way to chronicle his debt tribulations. Eventually, the blog began to take in advertising revenue, which also helped his financial situation.
[Narrator] Finally, Weliver cut his rent in half by moving into an apartment with roommates and cut down on eating out.
[Narrator] By 2009 he was debt free. Weliver says one key to his success was automating his debt payments so he wouldn’t forget—or be tempted to skip.
[Narrator] Weliver says he also learned the value of reaching out to others in the same situation, and being realistic about the process.
[Weliver] You need to keep reminding yourself of the big goal and the freedom that it will create once you get out of debt. So instead of thinking about the negative—all this debt you have and things that you can’t do now—focus on the feeling of finally getting out of debt and being free to put money toward things that you want to put money towards, instead of just debt payments.
[Narrator] If you’re on a mission to improve your financial health and build a little breathing room into your budget, take advantage of the services and tools offered by your bank. Offerings such as mobile banking and text alerts can help you stay on top of your money, so you can make informed decisions about spending and saving.
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