I wrote this post over at my main site, danerickson.net, right after I sold my house and paid off all my debt. And yes, it happened overnight.
I used to immediately cringe at articles with titles like, “How I Became Debt Free Overnight.” But guess what? I really did become debt free overnight. But let’s back up a little. Even though it happened quickly, it was at least two years in the making.
Stage One: the Will to Be Debt Free
The first stage to eliminating debt is wanting to become debt free. In my case, I had wanted to be debt free for years. In fact, I had been in debt since the mid 1990s. In the early 2000s, I was making some big dents in my debt. But then life happened and I got stuck in an expensive and messy divorce and child-custody case.
Even though I watched in terror as my debt went higher and higher due to lawyer’s fees, I kept the mindset of wanting to be debt free. In 2013, I took a big chance. I bought a house. Within a year or two of that purchase I saw my potential way out of debt.
Stage Two: Create a Plan to Be Debt Free
By about 2015, I noted that my home’s value was increasing at a healthy pace. I did the math and saw that I might have a chance of using my equity to pay off debt by 2020. At the time, I was over $65,000 in credit debt, not including the home loan. Yikes!
In 2018, I saw the opportunity to eliminate much of my debt by refinancing my house. It worked. I cut my debt back by about $25,000. But then something amazing happened. The real-estate market kept going up. In the spring of 2019, I figured that I could sell my house, and not only pay off all my outstanding debt, but also wind up about 10-20K in the black.
Stage Three: Taking Action
I’ve noticed something about people. They often talk the talk, but fall short in taking action. I decided that I wasn’t going to be that guy. It was a hard step to take. I had worked hard to buy a home. There was a lot of time and sweat equity in that house. But I called the real estate agent anyway. My desire to be debt-free outweighed my desire to be a homeowner.
I put the house on the market in May, 2019. It closed in July, 2019. The day it closed, I went to the bank and had cashier’s checks made for all my debtors. The next day, I was debt free.
Stage Four: Staying Debt Free
This is the hardest part of the equation. It’s easy to get into debt. We tend to buy more than we need. We justify getting loans, claiming that a loan is satisfying a need. All the while we go into deeper debt and spend thousands of dollars on interest. Remember that… thousands of dollars on interest.
Staying debt free will take some discipline. My personal goal is to not only stay debt free, but to use the extra money I’ve freed up in the process to invest in retirement and stocks. And that will lead to bigger and better things.
The Simplicity and Success of Having No Debt
Simplicity: I don’t care how you look at it, having no debt will make your life more simple. I’ve just gone from about ten monthly payments down to about four monthly payments. In the future, I’d like to bring that down even more. Less debt = more simplicity.
Success: I must say that this whole process seemed impossible just a few short years ago. The fact that I was actually able to pull this off lends itself to my commitment to becoming debt-free. The result is success. And you’d better believe that I have more ideas for reaching other long-term goals in the coming years.
I hope you’ll take the time to follow along. I also hope you can learn to take the initiative to excel on your own success journey.