Pay Off $50k In Debt On A $20k Salary In 10 Steps And 5 Years

This 30-year old receptionist and single mother of 3 climbed out of a $50,000 debt hole in 5 years using these 10 steps.

Broke and $50k in debt, Noemi Wikstrom, who had become a single mother at 19 living in Puerto Rico with no child support and working for minimum wage as a secretary, sent her three kids to live with relatives. She enlisted in the Air Force but was still behind. Desperate, she turned to payday loans, which only made matters worse. Finally, she got real and started on her path to a debt-free life.


“I saved $100 and put it into a savings account. Then, I put 10 percent of my income into this account, no matter what. I didn’t even miss the money. It was like paying a bill, but I was paying myself.”


“I stopped buying new clothes and found ways to trim grocery bills, like buying ground meat over steak and ramen noodles over pizza. I also moved in with a friend for a year, which cut my monthly rent from $875 to $100.”


“I carry a notebook and write down everything I spend money on.”


“I wanted to be free of all my revolving debt in five years and have a healthy savings account so I could pay for food and gas, and support my children.”


“After my day job, I worked at a photo shop for $5.25 an hour. I was able to pay an extra $6,000 toward my debt.”


“First, I took care of my three payday loans. Then, I moved down my list of creditors from $10,000 past due on an auto loan to $7,000 in medical bills.”


“No more late payment fees! Paying bills online helped keep me in the rhythm of budgeting.”


“When I couldn’t get a car loan or a new credit card, I checked my score and it was 491. Today, it’s around 648 — not perfect by any means but a big improvement.”


“To continue improving my score, I regularly check my credit report. I’ve found errors in the past, and it was a tedious process to get them corrected. I had to write letters to the credit bureaus and send proof that I was right.”


“I take USAA’s free financial assessment every six months.”

Have you ever had to get out of a big pile of debt? What strategies did you use? Share your thoughts in the comments.

Climbing Out of Debt [USAA] (PDF)


Edit Your Comment

  1. Evil_Otto would rather pay taxes than make someone else rich says:

    In before “she shouldn’t have used credit cards, she should have planned better, she’s a bad person, blah blah blah”. Sometimes life happens, folks.

    • PunditGuy says:

      I don’t think you can knock her planning ability, as she conquered this debt in a pretty systematic way.

      That said, it may be difficult to scale the item that saved her the most money — there aren’t many friends who would take on four additional people in their household for as little as $100 a month.

    • madanthony says:

      I’m not going to criticize her – she realized she had a problem, and took the necessary steps to correct it.

      I’ll save the criticism for the people who are sitting in their subprime financed mcmansions, sipping a venti latte while watching their big-screen TV from rent-a-center, while complaining about how much debt they have and how the man is keeping them down.

  2. Coelacanth says:

    Great – move in with parents? That’s wonderful if you’re either living in the same vicinity as them, or and/or unemployed/unattached. However, for those who have jobs and don’t live anywhere near family, that makes the possibility of paying off that much debt on so little income virtually impossible.


    The rest of us must rely on creating a reasonable budget, and look for supplementary income – if they are in debt.

    • pecan 3.14159265 says:

      Apparently you totally missed the part in which she sent her kids to live with relatives, and she herself moved in with a friend. She didn’t move in with her parents. You go to great lengths to pass judgment on a part of the steps. Sending her kids to relatives who were willing to take them in took a huge burden off her so she could actually work two jobs and pay down her debt. It makes no mention of where those relatives lived. And if you even read the article, which I surmise you didn’t, you would know that she did create a reasonable budget, and she did seek supplemntary income – she worked at a photo shop for $5.25 an hour.

      • Coelacanth says:

        Yes, I read the article summary a bit too quickly. My apologies for that. However, the main crux of her stategy happens to be is that there are lot of people in her situation who don’t have other people (family, friends) they can rely on to nearly eliminate most people’s biggest monthly expense: housing.

        If she took all $750/month savings in rent, over 5 years, that alone adds up to $45,000 in payments on her $50k/debt. Yes, I’m well aware there’d be a considerable amount of compounding interest, but that – by far – was the single most effective change she was able to make to tackle her debt… and let’s face it, that’s due to a bit of luck.

        • Coelacanth says:

          er, $775/mo -> $46,500

        • Eyebrows McGee (now with double the baby!) says:

          We’re all in unique situations with different resources. She made effective use of the ones available to her and attacked her debt. While not everyone may have family and friends available for cheap rent, also not everyone is a single mother at 19 with limited education.

          Everyone has their own positives and negatives, both personally and in their life situation. She overcame some pretty long odds to dig out of her hole, and good for her for taking advantage of all her options.

          • Coelacanth says:

            Yes, and for this, I congratulate her. It makes a very telling human interest story.

            However, I wish when publications put out stories like these, there’d be more restraint when attempting to hawk a list of “easy-to-follow” steps that that “anyone can follow” – while associating it with a very atypical result.

            • Eyebrows McGee (now with double the baby!) says:

              I don’t know; I think other than getting a 2nd job, most of her *steps* are followable, although her personal life situation is unique and may not be replicable (either the good or bad bits). And, yeah, maybe not $100/month in savings, but maybe at least a few dollars, etc. And she was able to cut spending pretty dramatically; not everyone can do that, but most everyone can cut spending at least a little. And so on.

              Personally I wouldn’t do #7 … I need to see and pay my bills, but I have a friend who never, ever pays a bill on time and wastes hundreds of dollars on late fees and interest. She needs to do #7 in the worst way. (And, incidentally, she’s someone who is on so tight a budget she can’t save anything … but if she paid her bills on time (and she does have enough money for that), she could save the fees and interest at least and put that away for the next time the car breaks down or whatever.)

            • subtlefrog says:

              Agreed, not because she’s an atypical result, specifically, but because her situation is so unique that her steps would work for such a small subpopulation that really? In my mind, not a strategy. But maybe I’m not thinking outside the box enough.

              Not to diminish what she did – because hell yeah, she worked her butt off, and it’s amazing. I give her tremendous credit. Tremendous.

              I do wonder, on the other hand, how many people that are up to their eyeballs in debt would be able to look at this, and adapt it to them. I don’t know – I’m thankfully not there, but maybe it would be useful to someone who could take something from it?

        • pecan 3.14159265 says:

          It’s not supposed to be a guidebook for how everyone should tackle debt. I think the Consumerist headline is slightly misleading in this manner. It probably should be “how one woman paid off $50k in debt on a $20k salary in 10 steps and 5 years.” The story itself is purely anecdotal. It’s an example of how one woman did it, while working in her own unique set of constraints. It’s definitely not meant to be some kind of how-to guide and it’s ludicrous that anyone would think it was.

          • Coelacanth says:

            Agreed. I guess I’m coming off as very cranky this morning.

          • DangerMouth says:

            I think it’s also a reminder to think outside the box.

            How many would say, “well rent is X, there’s no way to reduce that”. Lot’s of people wouldn’t dream of sharing living quarters past the college years, but in this case, it was a smart move for her.

        • fang0654 says:

          Actually, it said she moved in with a friend for a year. Still a significant savings, but not $45k worth.

  3. Flourless Algernon says:

    Bravo on her dumping her kids off on relatives. I’m sure that does save a few dollars.

    • Red_Flag says:

      Yah, how dare she take advantage of any help she can get or opportunities extended to her. It’s almost like she had to make significant, difficult changes to her life to fix her situation. You wouldn’t want that kind of personal responsibility running amok, now would you?

      By the by, do you knock the poor for using foodstamps to eat too?

    • DangerMouth says:

      Being willing to do what’s neccessary for the long-term benefit of your family is the mark of a caring parent, imo. Not only did she lift herself out of debt, she’s taught her kids that they don’t need government hand-outs to merely ‘get by’ in life because financial discipline is something that can be learned. This is a valuable lesson for anyone.

  4. TinaBringMeTheAx says:

    I’m sorry, but you lost me at “sent her three kids to live with relatives. “

    Get out of debt by getting rid of your kids?

    This is lunacy.

    • Real Cheese Flavor says:

      As horrible as it sounds, that was probably a good option give the situation she was in. A hell of a lot better than having them stay with her due to some misguided “family values” crap while she get deeper and deeper in debt.

      • oneandone says:

        My thoughts exactly. Especially since it’s only recently & in certain societies that raising children is done by solely, or even primarily, by their parents. Grandparents, aunts/uncles, and grown siblings used to have a much stronger role & were definitely a safety net. I don’t think we should go back to the way things were, but some aspects of raising modern children put unrealistic expectations on parents. Sometimes there are tough choices, and hers made a lot of sense.

    • pecan 3.14159265 says:

      I don’t think you understand. She temporarily sent her kids to live with relatives willing to take them in because she wasn’t able to take care of them and maintain two jobs. Without needing to take care of kids for a period of time, she was able to pick up a second job and put $6,000 toward paying off debt.

      • Julia789 says:

        I know that if something horrible happened to me or my husband, my mother would gladly take my son for a few months. And my son would be THRILLED to be spoiled by Grandma for a short time. I’d be completely comfortable with her caring for him, although I’d miss him so much I’d be sick to my stomach.

        Thankfully we’re a stable family and both have jobs. But in this economy you never know what might happen. We both work in industries where we could be laid off at any moment. And my husband has had serious medical problems and surgeries in the past. If we were to lose our jobs and health insurance, we could go from comfortable middle class to dire straights in a matter of months.

    • "I Like Potatoes" says:

      She says in the article that she could not afford to feed her kids and she felt like a horrible mom for sending them to family. I still don’t think I could do that, but it sounds like she felt that she was out of options.

      • TinaBringMeTheAx says:

        How about declaring bankruptcy?

        As bad as that is, how can it possibly be worse than offloading your children?

        • pecan 3.14159265 says:

          But it still didn’t mitigate that as long as she had three young children, she couldn’t take a second job, she had to continue spending money so they could eat, so they could have clothing, etc. It seems terrible that she “offloaded” her kids to her relatives, but keeping her kids with her would have contributed to the problem. She couldn’t have paid off her debt in five years with the kids still in the house.

    • lucky929 says:

      She sent them to relatives, people who one could assume liked if not loved the kids, so it’s not like she sent them somewhere horrible where they were ragged and mistreated. I’m sure she didn’t like doing it, either, but sometimes you have to do something you don’t like to make life better for your family, I guess.

  5. There's room to move as a fry cook says:

    Abandoning the kids for 5 years and living in a friend’s home for only $100 month isn’t an option for most people.

    • Rectilinear Propagation says:

      So then what do you do if you have children and you literally can’t afford to feed them? Let them starve?

      • Radi0logy says:

        Food stamps

        • Rectilinear Propagation says:

          Yeah, I know there’s government assistance and charities and such. I just think it’s crappy to call making sure her children are in a safe home where they can get food ‘abandonment’, especially when we don’t know what she tried before she sent them to live with her parents.

          • Eyebrows McGee (now with double the baby!) says:

            There may also be cultural issues at play; in some cultures it’s more common for children to be raised within an extended family than in others. For some Americans, leaving their children with their parents (the kids’ grandparents) WOULD be tantamount to abandonment. For other Americans, that would be absolutely culturally normal — even expected; in some cultures it’s the job of the grandparents to raise the children while the parents earn a living. Then the parents retire and raise their children’s children.

            I have some cousins whose cultural background makes it completely acceptable, even expected, for the children to go live with different aunts and uncles if the needs of the extended family suggest it — perhaps Junior got into an excellent arts program and Auntie lives closer to it, or maybe they’d like him to go to a better high school but his parents can’t afford to move and Uncle is already in the district, or whatever. Some of the adults work in jobs where they’re away part of the year, etc.

            • pecan 3.14159265 says:

              That’s a very good point. I grew up surrounded by aunts and uncles and grandparents. It was very common to be walked to school by an aunt, and come home to dinner with grandma. But I think even for cultures in which it isn’t the norm, at some point you have to make a hard decision and do whatever it takes – even if it’s distancing yourselves from your kids so you can actually provide for them later on in life, and if those kids still have a loving home with relatives, it’s better than going to a foster home because child services caught wind of that single mom in $50,000 of debt who can’t afford to feed her kids.

            • Xay says:

              Thank you for pointing this out. In my extended family, it is fairly common for grandparents, aunts and uncles to raise children while the parents get their acts together – especially if the parent is a single parent in the military.

      • bennilynn says:

        Now, I don’t have any kids, but what are the odds most people could find a place to live that cheaply? I live with a friend and I pay my fair share of the rent. Between that and the monthly utility bills (gas, water, electric, internet) that takes nearly half of my entire monthly income.

        I do manage to sock a way a tiny bit each month in a savings account and I contribute to my 401K, but the idea that most anyone could accomplish what she did is very improbable. She was just very, very fortunate.

        • pecan 3.14159265 says:

          You rent a room. Literally, that’s what it would be for $100. You find the crappiest apartment, with the tiniest of amenities, and you rent a room.

          • MoreFunThanToast says:

            $100 is ridiculously cheap, her friend is barely charging her for anything at all. Renting a crappy room in a crappy house with a shared bathroom with 4 other people cost $600 a month, if you split that b/t 2 people that’s still $300. For a small crappy room.

        • Eyebrows McGee (now with double the baby!) says:

          Yes, but, as you note, you also aren’t a single mother at 19, and I assume you have more education than she does. You may not have family and friends to ease your rent, but you also aren’t facing her negatives.

          • pecan 3.14159265 says:

            A friend of mine got pregnant at 19 and she had only her high school diploma. If she didn’t have her mother nearby to help, she wouldn’t have made it far. She was making $25,000 a year as a receptionist, with a baby, debt, and no clue what to do. She’s doing well now, but she had to grow up a lot in a very short period of time. I don’t wish this kind of situation on anyone.

        • Rectilinear Propagation says:

          Did you mean to reply to me or the person I was replying to?

    • zegron says:

      If you carefully read the article she only lived with her friend for one year, not all five. Gonna rip on her, at least do it accurately. She also had sent her kids to live with the relatives when she was broke before she started her debt recovery. The article PDF states that she “had no choice but to send them to live with relatives”.

  6. endless says:

    cutting rent to $100 a month.

    that’s a great plan for those who it will work for.

    other great plans for paying off $50k of debt in 5 years: winning $50k in year 5.

  7. Scuba Steve says:

    How much did the Debt collectors settle for? It almost certainly wasn’t the full 50k. Living with room mates is a great way to spend money, but make sure you get good ones, otherwise your life could be a living hell.

  8. morganlh85 says:

    I can understand wanting to be free of debt and moving on with your life. But one thing I can’t totally support is dedicating my entire life to getting out of debt for any period of time.

    Getting a second crappy job for minimum wage and having absolutely no life (and shipping my kids away) and not being able to enjoy anything for five years just to get my credit score up? It’s not worth it to me. Life is too short to only be thinking about that three digit number.

    Working diligently with what tools you have is one thing. Put some extra money towards bills, refinance, negotiate with creditors, create a budget, etc. But I’m not going to throw away that much of my life to make some creditor happy. The same trap that gets us into thinking that we need those credit cards, we need those high risk loans, etc. etc. is the same system that makes us think that we are slaves to our credit scores and credit reports. We are not. Sure, being able to own a home is nice. But is it everything? When I lie on my deathbed, will I think back “Gee, I only wish I had wasted five years of my life so I could die with a better credit score!” I doubt it.

    • pecan 3.14159265 says:

      I don’t think that was her intention. She was in $50,000 of debt, with no prospect of ever getting out of it. She finally had to sit down, look at her life, and dedicate herself to improving it long-term. I don’t think it was just about getting out of debt, or that credit score – I think for her, it was about being able to provide for her family. In context, she was a single mother of three young children. It’s not a stretch to suggest that her ultimate goal was to not only get her head above water, but to actually be able to put away money for her kids’ college, or give them new clothes, or better food.

      When you’re $50,000 in debt, and it looks hopeless – you might settle for dedicating all waking hours of five years to paying it off as well, especially if it meant that you would be able to provide for your family.

    • ben says:

      It’s not really “making some creditor happy.” It’s money that she borrowed, that she owed, that she’s responsible for. She took responsibility for her situation and improved it. As others have pointed out, not everyone would be able to take the exact same steps that she did, but there’s no reason to criticize her for getting her act together.

      It’s not about a “number.” It’s about making a better life for her and her children.

    • rdm says:

      There’s a difference between paying something off just to increase your credit score and getting out of 2.5 years of salary’s worth of debt. That kind of debt is crippling to your insurance rates, your possibility to get a decent apartment, anything.

  9. pantheonoutcast says:

    It makes for a nice anecdotal story, but these aren’t exactly practical solutions for most people. Move in with a friend? Most of my friends are either in debt themselves, or have families and cannot afford to give up the space. Take a second job? I, like most people I know, already work 60 hours a week. to make an additional $6,000, I’d have to work an extra 1100 hours – yeah, not going to happen. Normal people have to eat, sleep, and de-stress from their day job. We also don’t have the luxury of shipping off our children to relatives when finances are too tight. How about not taking out a $10,000 auto loan when you only make $20,000 a year? I drive a 15 year old truck that I paid $1500 for. This whole story just smacks of lack of personal responsibility…

    • Rectilinear Propagation says:

      How about not taking out a $10,000 auto loan when you only make $20,000 a year?

      You know, I was actually worried that someone wasn’t going to make the “She’s a horrible person for getting in debt in the first place” comment.

      But what’s really awesome is that you first complain that the steps “Cut Spending” and “Take a Second Job” aren’t practical and end with how *she* lacks personal responsibility. That’s just fantastic.

      • Red_Flag says:

        I think pantheonoutcast just provided me with my daily minimum intake of irony.

        • pantheonoutcast says:

          There’s not an ounce of irony in what I said. Not one. Nor did I say that she should give up and become a miserable failure. My point, which was so so broadly missed, was that this story appeared on a site devoted to giving people financial advice, and yet the advice given (by way of anecdotal narrative) is ludicrous. “I am in debt so I am going to pawn my children off on my relatives, run away and join the air force, and then mooch off of my friends!”

          Nor did I criticize anything about “Cutting Spending” as a means to financial improvement. I criticized the inherent impracticality of the whole thing. People who have three kids and only one income cannot, 99 times out of a hundred, send their children away to relatives, freeing themselves up to take a second job. Is it somewhat noble that she is now trying to straighten out her life? Yeah, sure, in an inspirational “Reader’s Digest story” kind of way. Is this practical advice for the overwhelming majority of this site’s readers? Not by a long shot.

    • ben says:

      Perhaps it was lack of personal responsibility that got her into the situation that she was initially in. I’m sure that’s true, at least partially. So what? The point is that she now did take personal responsibility and rectified the situation. I’m not really sure what your complaint is. You’re right — not everyone would be able to do the exact same things that she did. Does that mean she shouldn’t do them? Because she might have been irresponsible in the past, she should decide her life is a permanent failure and just give up?

  10. KarateMedia says:

    Sorry, I have to join the chorus of “nice plan… for a few select people.” I can’t dump my kid off with relatives for 5 years, which also means I can’t get a night job. I can’t move in with a “friend” and eradicate my mortgage payment.

    It’s an interesting enough single case, but it just doesn’t seem applicable to most people in her situation (kids, etc). As someone else joked above, you might as well recommend winning the lottery while you’re at it.

    • morganlh85 says:

      Exactly…her solution is just as reasonable as “Get out of debt in one easy step: Withdraw the needed money from your bountiful trust fund.”

  11. pecan 3.14159265 says:

    The story isn’t nearly as cut and dry as the post suggests. This is from the linked article:

    The 30-year-old single mother was broke. Unable to feed her three children, ages 7 to 12, she had no choice but to send them to live with relatives. “I felt like the worst mother on earth, but I had to be honest with myself,” she recalls. “I was earning around $20,000 a year as a senior airman with the Air Force and was $50,000 in debt.”

    It goes on to say that before all of that, she had become a single mother at 19, with no child support, and she was living in Puerto Rico, making minimum wage as a secretary. She already had debt, and even after she joined the Air Force, things didn’t improve because she was diagnosed with a digestion disorder and had to pay medical bills.

    This is a woman who seems very disciplined, and it’s a prime example of what can happen when life just piles up one thing after another. Kids, no support, poor pay. Then medical bills. It just piles up. It happens. I don’t think it’s particularly constructive for people to start laying blame. I bet she knows precisely how terrible it was to be in debt.

    • Red_Flag says:

      Thanks for that. Way too many others have been piling on with the “well it’s so great she can dump her kids somewhere and move in with a friend, but that’s not for me” Guess what? Sometimes to make significant changes in your life situation (whether it is caused by carelessness or bad luck), you have to suck it up and do stuff that is not easy and not fun, and you have to take advantage of every opportunity you can. (Given the situation described, if she had not moved in with a friend and had not sent her kids to live with relatives, she would have been a fool). That’s just life.

  12. Mr. Bill says:

    She shipped her kids off to relatives and then joined the Air Force and got into debt then? So after the Air Force (4 years?) she moved in with a friend for a year. If I am reading this right she had relatives taking care of her kids for 9 years – 4 in the AF and 5 years to pay this all off. Maybe I’m wrong about the math. Being out of debt is great but not with this scenario. In my opinion anyway.

    • pecan 3.14159265 says:

      You didn’t read properly. She already had debt before she joined the Air Force. After she joined the Air Force, the debt kept piling up.

    • That's Consumer007 to you says:

      I don’t know what the air force pays, but in Michael Moore’s Capitalism movie, it is revealed that Commercial pilots make less than most call center workers, which is an abominable fricking shame, and the airline CEO’s should be beaten for this. I don’t want any pilot flying a plane I am on having to get food stamps when he goes home.

      • soj4life says:

        Maybe pilots starting out in the industry at some crappy regional airline. Pilots with experience make serious dough with US Air, American, BA.

  13. Truthie says:

    Good for her. I am sure that took way more hard work and dedication than many people can muster.

    On a lighter note, for some reason the tone of the article reminds me of those ads that say “Local mom pays off debt by following 1 simple rule.” OBEY!

  14. ycnhgm says:

    If one starts relying on payday loans why not thinking about declaring bankruptcy instead? Using payday loans is not going to make your situation any better.

  15. Cant_stop_the_rock says:

    Her advice is good. Standard disclaimer: “results not typical.” There’s a bit more to it than her $20k salary – she says she worked a second job, and with her low income and 3 kids she not only would have paid no income tax, but she’d have gotten a good amount back from the EITC.

    $50,000 is a lot of money, and 5 years is a loooooooong road. I commend her for paying her debts instead of filing for bankruptcy like most people would do in her situation.

    • That's Consumer007 to you says:

      Why is it wrong for consumers to file for bankruptcy? There are millions of business people that do just that, leaving the rest of society in the lurch over and over and over with no personal financial exposure – so why is it wrong for consumers to do it who really do need help, and who really can’t get out of it. Don’t even pretend we haven’t had tons of stories on this very website about how credit card companies custom design accounts and products to make sure you never pay it off….

      • Cant_stop_the_rock says:

        First of all, I didn’t say it was wrong.

        Secondly, what bearing does the actions of businesses have on whether it’s right or wrong? If it’s right or wrong for consumers, why would the same not be true for businesses.

        I think it is necessary for bankruptcy to exist as a last resort, when you have no other options. This woman had other options and exercised them. I commend her for paying her debts.

        The BS about CC companies setting up account terms so you never pay off your debts is just shifting the blame for the mistakes that stupid people make. If you only make the minimum payment every month and you don’t see your account balance dropping noticeably, pay more than the minimum. From a purely financial perspective, a person with a lot of credit card debt is better off with low minimum payments because that allows them to focus first on the account with the highest interest rate.

  16. Naame says:

    “sent her three kids to live with relatives.”

    Yeah, how many single mothers or hell…even couples can just send their kids packing permanently until you pay off your debt? Not to mention that there is probably a lot more to this story on top of that which aided her to a success.

    Granted, the 10 suggestions are wise practices for anyone to follow but no one should believe that this story means that anyone making such a low salary is even close to being able to pull off what she did.

    • pecan 3.14159265 says:

      Sometimes the necessary actions are the hardest actions. I don’t think she wanted to send her kids away. I don’t think she felt she had a choice. She wasn’t being a good mother by keeping them with her when she couldn’t even afford to feed them. She can subsist on some ramen noodles for a while, but to give that to growing children would be tantamount to neglect. This woman did what she felt she had to do in order to provide for her family in the long run. It doesn’t mean her decision was easy, or that she wanted to make it. It was that the writing was on the wall, and it was clear as day that she didn’t have a choice. When your kids don’t have food to eat, you do whatever the hell is necessary to get your life in order.

      If she had kept her kids with her, her debt would have gotten even worse (only one job, paying for kids’ food, clothes, etc.) and it’s possible her kids would have been taken away from her if she could not continue to provide for them in the most basic ways. We’re not talking about how Susie can’t get a new backpack this year – we’re talking about what happens when kids don’t get proper nutrition because they’ve been eating ramen noodles and a can of beans.

      • Naame says:

        I think you misunderstood what I was expressing. I understand your point and I am not criticizing her decision to send her kids to other members of her family until she got back on her feet. I was simply saying that her life story is hardly one that most people can mimic and expect the same results because most people cannot put their kids on hold like that whether it be for better or for worse.

        I said what I said because I just know some jerks are going to take this story at face value and start believing that if she was able to do it by herself then anyone making $20k-$30k can do it without any help other than maybe family. That simply is not the reality for most people in her situation here in America.

  17. nofelix says:

    All these tips are either A) super obvious (don’t buy steak) or B) rely on others for support (send kids to live with relatives). None of them are C) helpful.

    What kind of moron doesn’t pay off their highest interest loans first?

    • pecan 3.14159265 says:

      I believe this is the first truly malicious Blame the OP post. Congrats.

    • RandomHookup says:

      The whole “debt snowball” philosophy focuses on paying off the smaller debts first, if for no other reason than to make it more manageable. For some people, cutting down the number of debts is more valuable than attacking the most expensive first.

    • MostlyHarmless says:

      Sure, you have any helpful tips that you want to add in?

      And dont ever for a moment try to imply that you have never in your life done something obviously stupid or never got out of some hole by doing something rather obvious that you had been ignoring to do for a while.

  18. RandomHookup says:

    Not to pile on the subject of the article, but she missed a huge opportunity to get caught up when she was in the USAF. She would have had a relatively low salary, but no expenses for food, housing, medical. As long as you avoid the “let’s go out and blow our whole paycheck on payday” problem and you are willing to be frugal, you can save a decent amount. She even received dependent allowance (I have to assume) because of her kids, which could have gone to her relatives to help support them (and they should have been covered under military medical programs). Depending on her job, there are lots of ways to make extra money (babysitting, pulling duty for someone else on weekends, holidays, comes to mind or taking military courses to help get promoted faster) because boredom is often the biggest problem in the military.

  19. Brazell says:

    Got out of about $8,000+ of credit card debt in a year, and it changed my life. WHile I hated having the debt, I’m glad that I did… taught me how to spend more wisely and not outspend my income, which was entirely the problem. I’ve been revolving debt free for about a year… I’d say “Debt free,” but that’d be a lie … I have a $200,000 mortgage now :)

    I’m not going to share my “get outa debt” advice though because it isn’t applicable for most people. I did, however, use the snowball method to assist things. Now, I’d much rather advocate smart credit use.

    • kexline says:

      Congratulations, that’s awesome.

      I came across a calculator at that seemed to indicate I can eliminate my debt in a year, if I’m willing to live like I did when I was 20.

      Maybe that’s it… “Step 1: Go get some ramen, some Capri-Sun, and a roommate. Pretend you’re 20 years old and making $8.00 an hour part time. Step 2: You don’t need a Step 2.”

  20. davere says:

    I used the “snowball method” several years ago. Worked great and I’d recommend it to anyone. (It’s been discussed on this site before.)

  21. Red Cat Linux says:

    That really ought to be 12 steps.

    I think something as big as ‘get rid of children for 5 years’ or ‘live out of cardboard boxes in friend’s apartment’ really deserves a step all it’s own.

  22. pot_roast says:

    1)Eat ramen
    2)get rid of the kids
    3)live on a friend’s couch
    4)get 3 jobs

    Easy as pie!

    Something also sounds a little strange – she was active duty USAF but racked up a bunch of medical bills? The military is now making active duty people pay for health care too? Huh?

  23. Rectilinear Propagation says:

    I don’t understand why so many people are saying this list is bad or doesn’t apply to most people.

    Just because you can’t move in with a friend doesn’t mean the “Cut Spending” item is impossible. It just means you have to cut something else.

    No one is suggesting that you have to pay off debt exactly the same way she did it. It’s just an example, FFS.

    • treimel says:

      Well, I can only speak for myself, but this is the “problem” I’m having:

      First, “cut spending” is not really a step, it’s a slogan. For this to be useful, it needs to give the reader some concrete course of action, not a generalized goal. Second, there’s something deeply disingenuous (if not downright dishonest) as presenting her living arrangements for herself and her kids as “cutting spending.” Spending on the kids didn’t necessarily go down–someone else was doing the spending! ditto the $100/ month rent. Her friend was carrying her. Great, that’s what some friends will do, but don’t tell me that the 100 bucks represented an equal share of the rent or mortgage of that household because that’s just not realistic. So, again, the spending “cut” was really just the friend spending the money on housing instead of the debtor.

      • Rectilinear Propagation says:

        My problem with the earlier comments is that they seemed to say that because they couldn’t do exactly what this woman did then the list as a whole is bad advice. It’s like they thought that USAA was saying that the steps to get out of debt are the examples of what she’d done and not the general advice in text that’s bolded and in all caps.

        I agree that “Cut Spending” is vague but then this list is also from USAA with comments from a Certified Financial Planner. They probably want people to come in to speak to a planner for specific advice on that. You also make a good point about the living arrangements. That should be in a separate step called, “Ask for Help”.

        But I don’t agree that the headline implies that she did it without help.

        • treimel says:

          Well, I appreciate the other points you make, but the headline doesn’t just “imply” she did it without help, it outright says it: “pay off $50K..on a $20K salary…” You simply can’t honestly say you paid off something “on” a given salary, when in fact you had help. It’s just a falsehood, plain and simple.

  24. kexline says:

    Good on the OP and a nice human interest story, even if Ben’s headline is a tad misleading.

    I’m curious about Step 10, but USAA does not make their checkup available to non-military people. (They make this clear only after putting one through a lengthy registration process. Thanks, USAA, for understanding that my time is worth nothing.)

    Does anyone know of a similar tool that’s available to anti-everything commie pinko civilian baby-eaters like myself?

  25. Trick says:

    So if I dump my kids and live with a friend I can get out of debt? Great for the OP but for most, that is not an option…

    Still, thinking of all the money I could save if I get rid of the 17 and 15 year old, the 17 year old’s car and all the damn food they eat!

    Next, move in with a friend and forget about the better half, don’t get me started on how much she costs to keep around.

  26. Snarkysnake says:

    I don’t think that Bank o’ America , Citibank or Cap One will lose any sleep over this story. Most people don’t think past their next payday ,much less 5 years out. And of course , thats how they help you get hog-tied with debt. They understand instant gratification and most of their customers who are up to their eyeballs in hock don’t. I applaud this woman’s ingenuity and perseverance. Now that she has learned her lesson the hard way , I’ll wager that she applies that lesson from this point forward.

    Now. For all you folks that say that you’re not willing to make the sacrifices needed to do what she has done (second job ,move in with roomies etc…) I respect your decision too… But I also expect to see you whining on these pages about how unfair and abusive the credit card companies can be. The OP is empowered against these userers and you remain dependent on them.

    • treimel says:

      How is giving someone else the expense of raising your kids being “empowered”? I’m glad this woman’s relatives were charitable enough to do it, but it’s not from the debtor’s “empowerment” that it happened.

  27. treimel says:

    “This 30-year old receptionist and single mother of 3 climbed out of a $50,000 debt hole in 5 years using these 10 steps.”

    Step 1) have someone else support the three kids
    Step 2) have a friend provide housing at a pretend rate (sorry, folks, but $100/ month doesn’t cover a room anywhere.)

    I’m glad this woman worked hard and was able to overcome her debt; many of the tips here are good, common-sense steps that all debtors would do well to follow. Nevertheless, I am growing increasingly tired of these incredibly innacurate headlines and ledes. No, this woman did not support her children and get out of debt on a 20K salary without the material support of others. Did not happen. Can not happen, and I’m sick of these stories being help up as “see, you, too, can get out of debt.” The reality is, she did this through the charity of others in addition to her own hard work and frugality. Note that I’m not criticizing her–there’s nothing wrong with that combo. I just hate seeing headlines like these that are just untrue.

  28. pandroid says:

    Paid off 10k in credit card bills in two years on 30k a year (pre-tax) of income. Started off by putting money in savings, just like the OP. Created a budget. Stopped spending on anything that wasn’t a necessity. Got a roommate. Got a second job. Got non-monetary help from friends. Set goals. Created a spreadsheet tracking my progress month to month. Joined an online debt support group. Threw a party for my friends when I paid my last bill.

    It worked for me. I’ve been “bad” debt free for a year and a half (still have a very low interest student loan, and since I got married this year, a mortgage as well). I have not, and will not, fall into bad habits again.

    Happy to hear she got her debt under control. Disappointed in the haters in this thread.

    • pandroid says:

      Two years was actually 17 months, if people want to try to do the actual math on that. I rounded up, but then I realized that people may get picky about that sort of thing attached to an article like this.

  29. Silversmok3 says:

    See,my take on this is that the only get-out-of-debt story that matters is YOURS.

    Not to take away anything this woman has done, but the reasons people owe what they owe are all different-and since I got into debt for different reasons and by different means than this woman or yourself, her tactics to eliminate it work for only one person-herself.

    So, I guess that’s to say while its nice to see a sucess story every now and then, only you can get out of your own debt, with your own plan.

  30. Winter White says:

    While I think it’s good to post these occasional “anyone can get out of debt” posts, I think they have to be read critically and taken with a grain of salt–this person got out of debt by getting rid of expenses, plain and simple. In this case her expenses were her children, but there are also inconsistencies in the timeline of her story–if she was a senior airman, she would have received housing, so she wouldn’t have $875 a month rent.

    Neither here nor there, though, as the message is…it’s easiest to get out of debt when you have support. I got out of debt by having a parent personally refinance my credit card debt at 3% interest. Could I have done it in 3 years if I hadn’t had a parent do that and help me cut my losses? Nope. Same case here…without relatives to pay for her children, and friends to put her up for essentially free, she couldn’t have done it.

    What I want to know is…who on a $20k salary has $875 a month in rent? The take home pay is $1200 a month. Of course you can’t eat on that.

    • Verdant Pine Trees says:

      You might have meant BAH, but if not (or just for anyone else reading) — not everyone gets base housing. Often there’s a waiting list, because – unlike the days when they used to say, “If the Army wanted you to have a wife, they’d have issued you one” – the military is way more family-friendly. They need it to keep people in, and keep ’em happy. But as a result the need for family housing far outstrips what’s available. So you get paid BAH (basic allowance for housing) that matches the going rate for rent in the area where you live. shows the calculator.

      My husband and I rented the entire time he was in, and before we were married he was billeted in an apartment; he had many friends who took the extra BAH payment and rented, too.

      • Winter White says:

        Yes, I meant a housing allowance be it base housing or an allowance. She got some kind of housing assistance, at least for some time after racking up this debt.

  31. Verdant Pine Trees says:

    Thank you RandomHookup, for being the first person to comment on something I noticed… she was an airman in the USAF. My husband was still enlisted in the military when we got married, and we still have family and friends inside, so we know something about BAH (basic allowance for housing) and the extra amounts paid for dependents. It makes up quite a bit for the very little pay you’re offered. I can’t help but pass judgment. I think she did a lot of the right things, but I also think she went too far.

    For one thing, if you’ve been in those shoes, it’s really tough to be separated – AND to know your loved one could be in harm’s way. So a five year separation from her kids, in war time – she could have been sent overseas rapidly – seems like it could have been particularly scary and hard for the kids. Was it really worth that? How do we know that the stomach ailment wasn’t made worse by her being separated from her kids?

    While it’s really smart to get BAH and then rent for less than what you’re given, she gets a dependents allowance and a raise to provide extra money for those kids. They also offer money management classes. It’s a stressful lifestyle. She is far from the only service member I’ve known who has taken a part time job to pay off debt (the “Dave Ramsey” way). I admire the ethical commitment behind paying all the debt off, but question whether that is wise when the first job is as taxing physically as military service is.

    I really admire the way that in many cultures, you do have aunties and uncles and grandparents taking care of kids. However, it must have been really wrenching for her to do — and could have been a bad situation if the kids got sick. Off post, you have to try and hunt down a Tricare provider, and they’re not easy to find when you’re a grownup *in* the system, with your own ID …

    That’s one more question I have – how did she land all this medical debt while she was in the service? My spouse and I both landed in a Naval hospital when we got ill, and didn’t have to pay a dime.

  32. AngryK9 says:

    When I saw this, I actually thought is was some sort of spam bot that had invaded the Consumerist website. It was worded just right to appear that way, even though unintentional, apparently.

  33. H3ion says:

    I saw this on the side bar and I thought Consumerist had started taking ads, or that this was an ad for Phoenix University that somehow slipped by. Wow.

  34. SecretAgentWoman says:

    I’m assuming that she didn’t pay child support since paying her credit cards was more important. She mooched off of friends and relatives, people, and abandoned her family. That isn’t a hero in my book, and she deserves no praise for her “priorities.”

  35. akuma_619 says:

    I really liked taking a notebook to write down your expenses. Sometimes you lose track of your money and wonder were it all went.

  36. Swearengen says:

    Come on, this woman was making $20k a year, and paying $875 a month in rent? That would come out to about $15k a year in pre-tax earnings. So she’s spending 75% of her income on rent. No wonder she was in debt.

  37. PsiCop says:

    Most of this is all sound advice. But if I may be pedantic there … if she took a second job, then she didn’t pay off this debt on a single $20k salary. She paid it off on something more than that.

  38. coren says:

    It’s a little misleading to say “on a 20k salary” when she’s picking up money on the side with a second job.

  39. ConsumerWolf says:

    I think one of the BIGGEST things you can do to stay out of debt is not to have kids. But if you do have three kids:
    1) Accept that you won’t have all the nice things you might have had if you chose not to take on the financial burden of supporting 3 human beings in addition to yourself.
    2) Do not have a child with anyone you aren’t 100% sure will stick around and help pay for them.

  40. soj4life says:

    Single mother of 3 at 25 only earning 20k a year, I see the problem right there. I also see the problem of single mother of 3 at 30 only making 26k a year.

  41. overdrive23 says:

    When I graduated college, I had a maxed out credit card, car loan and student loans. I called all my financial institutions and got exact pay offs, minimum payments and APR’s.

    I made a list and organized it from highest to lowest APR. Sadly, my credit card was the highest with an APR of 24.99% (i know, i know). I figured the maximum I could afford to pay for all my loans then proceeded to make minimum payments on all BUT my 25% credit card. I was paying that card off so fast it was great. I called every 3-4mo and asked for a new APR. They lowered it from 25% to 20% to 18% to 12% before it was 100% paid off.

    Now, when I use the card (we just bought a new bed) I called and asked for a lower rate on purchases to which they agreed to give me 0% on purchases for 6mo.

    Being vigilant works.

  42. liveandletlive says:

    Hi, my name is Noemi Wikstrom. I want to clarify a couple of things in this article, just for fairness and justice. I never abandoned my children, even when they went back to live with my parents, I supported them and gave them all I could. My son is now going to college, my oldest daughter is graduating from High School next year and my little one, well she is just enjoying being a kid. They stayed with my family for a short time, not even a year, until I could find a place for us to live. My ex-husband left me with a lot of his debt and even to find a place to live was a hassle.

    I had my concerns when I had my interview because a lot of things were left unsaid. It was a lot of work for me to realize, that at the rate I was going with my financial life, I would have damage the chances for my family to have a good life.

    If you are going to judge me, I cannot stop you. America is a free country, but I shared my story to let people know, that when you want something, with hard work, you can achieve it.

  43. swansoncide says:

    Um, what? Some “consumerist” you are. Are you sure this isn’t Bankerist? Let’s look at your advice for our hero:

    1. “Consider selling the car and buying a beater for like a grand, cash.”

    Since our hero still has three years left on his loan and still owes $7000, I think we can safely assume he bought a very cheap new car or a nicer car that was a few years old. Do you really think he can get more than $7000 for it? I don’t. I’m guessing he ends up in the red if he sells his wheels. Even if he doesn’t, he’s going to end up saving his monthly car payment, much of which will have to be spent maintianing his new beater.

    2. “Face facts and face the lawsuit. Perhaps they are willing to settle for a portion of it. You can use money from the car sale to get it down by a bunch, then set up a payment plan for the rest.”

    How much do you think that will cost? If he had money to settle, he’d have settled by now. I strongly believe that if our hero is being sued for $7500 for one credit card, he has several more debts at least that high.

    3. “Get a 2nd job.”

    Have you heard the economy’s kinda bad these days? Jobs don’t exactly grow on trees. Perhaps Conumerist will hire him!

    4. “Reduce expenses.”

    Yes, he can do what our intrepid mother of three did! She gave away her children, and then stopped buying new clothes and meat. For five years. Our hero already lives at home. He has a terrible job. Now you want him to stop spending on…what, exactly?

    5. “Get current on all debts.”


    6. “Set aside a solid chunk every month to pay them down, starting with the highest interest one first.”

    Now let’s consider the routes our hero can go. He can hire a lawyer and try to fight his lawsuit. He will lose and his wages will be attached. He can stop spending money on anything fun for five years. He can continue living at home during that time (unless his folks kick him out).

    OR, he can scrounge up $1000, declare bankruptcy, and move on with his life. He’ll be on a list for 10 years, but it sounds like our hero won’t be buying a house anytime soon. He CERTAINLY won’t be if he’s paying off bad loans for the next five years.

    Once his bankruptcy is complete, he’ll probably still have his halfway decent car, no debts, and credit card offers in the mail. If he’s smart enough to resist those offers, he can spend the next five years SAVING MONEY to get his own place, or to start a business, or to do whatever he wants WITHOUT slaving for the banks, who quite obviously never should have advanced this guy 10 or 20 or 50 thousand dollars in the first place.

    Bankruptcy makes sense if you own nothing. Our hero will be much MUCH better off after bankruptcy. It’s practically illegal to say so here in America, but it’s TRUE!