Derek started his Life and My Finances blog in 2010. He loved finances and earned a degree in it, but his job didn’t require his expertise. So, Derek thought this would be a good outlet.
Derek says, “I thought it would be fun to write about various topics and help a few people out in the process. Boy was I right!” Yes, he was right because he also benefited from his own advice.
His story goes like this: During 2010, Derek and his wife owed $18,000 in debt.
“Back then we had absolutely no money left at the end of each month,” remembers Derek. “In fact, for a while there we were going backwards.”
Derek continues: “The debt was a huge weight on our shoulders.”
In January 2010, Derek decided he had enough and in 18 months he paid off the debt. “My wife was able to find a job and I worked a day-job to the fullest while blogging each night,” says Derek. “We made a budget and stuck to it pretty well. Instead of going backwards each month, we were paying $1,000 or more toward our debt.”
In 2011, Derek and his wife purchased a home for $76,000 — but things went suddenly wrong.
Going off the deep end
Not long after Derek and his wife purchased their home, his wife approached him and said, “I want a divorce.” She also wanted half of their net worth…which equated to $21,000. Derek was back in debt, this time $22,000 worth.
“This time around, I was mad,” Derek says. “I was mad at her, mad at the situation and mad at the debt. I just wanted everything out of my life – all complications gone – so I tackled the debt with a vengeance.”
He kept working his day job and blogging at night, but Derek also took on other jobs. He gave me a list:
- Writing articles for other blogs at $10 apiece. He thinks he wrote 200 of them in six months
- Mowing lawns, which he says was humbling but he didn’t care. He made money
- Flipping cars – 3 of them and each one earned him about $1,000
Derek says, “I reduced my expenses down to nothing. I negotiated down my phone bill, my car insurance, cut my food bill in half. I even stopped driving my car during the summer to save on gas (I rode my bicycle).”
Derek told me: “Some may have said I went off the deep end, but let me tell you, that debt went away in a heartbeat.” A heartbeat is right, he paid off the debt in only six months. But Derek didn’t stop there.
“After paying off that debt, I figured, “Why stop here?”, so I started chunking money toward my house debt. After 12 months in 2014, I had paid off all $54,500 of my mortgage loan.” And Derek remains debt-free.
I asked Derek for some tips that could help our readers defeat debt. Derek gladly offered this advice:
- Make a plan for your money. Tell it where to go before the month happens. It’s so much more gratifying to be the boss of your money vs. it telling you what to do each month.
- Before you buy something, think to yourself, “Will I really care about this 2 weeks from now?” If not, put it back on the retail shelf. It’s just not worth the money since it will give you no joy in the distant future.
- Automate your investments. Get money taken out of your check to put into your investment accounts. After a while, you’ll forget it’s even happening, but this will make you very wealthy in future decades.
Today, he still doesn’t believe in consumer debt. He believes credit card debt, student loans, car loans, etc., should be paid off as quickly as possible. “All the while, put 15 percent of your income toward your retirement investments if possible,” says Derek.
Derek’s financial knowledge and blogging career helped him defeat debt. It’s also helped many other people. With that in mind, I wanted to end the Profile with one more valuable tip: “Enjoy your money today, enjoy it tomorrow, and sock some away to enjoy in retirement. This makes for a good life all around.”
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