I write about personal finances for a living, but that doesn’t mean I’ve always managed my own money like an expert. In fact, it’s some of the difficult growing pains I faced that lead directly to my self-education on financial management. And, having overcome those difficulties is why I do what I do today.

When I’d reached rock bottom, I held roughly $40,000 worth of debt. Here’s the story of how that happened, and, more importantly, what I did to get out of it.

When I'd reached rock bottom, I held roughly $40,000 worth of debt. Here's the story of how that happened, and, more importantly, what I did to get out of it.

How I Fell Into $40,000 Worth of Debt

Shortly after I started my college career many years ago, I received a credit card offer in the mail. My parents rarely used plastic, and frankly I didn’t understand the rules very well. After I filled out the application and sent it in, my shiny, new card arrived in the mail. From there, I didn’t waste much time.

I started eating out at nice restaurants, picking up bar tabs with friends, and I never missed a local sporting event or major musical concert that hit town. My credit limit was only $1,000, and from the get-go I only ever made the minimum payment each billing cycle. After about six months, my limit was raised to $3,000 and I also signed up for two more cards. Thinking that my minimum payment strategy was going well, I got a taste for nice clothes and started upgrading my wardrobe. I took a few vacations over the following years, as well.

When it came to my college education, my parents paid the tuition, books, and all other expenses, with the agreement that I would pay them back when I graduated. I didn’t find work right away, though, and even after I did – a full-time gig at a restaurant – I still wasn’t making all that much money. Eventually, I started going over my limits, and keeping up with the minimum monthly payments was getting tougher.

At this point I had about $25,000 in credit card debt and I owed roughly $15,000 to my parents. I was living with them at the time, and they started getting a little suspicious when I fell behind on my payments to them. My mother got hold of my credit card statements, and when she saw what a financial mess I was in she gave me an ultimatum: Do something about it or she would take over my finances. I certainly didn’t want that, so it was exactly the wake-up call I needed.

How I Got Out of It

When I finally got serious about my debts, I wanted them off the books as quickly as possible. Here’s what I did.

Started Budgeting
Back then, there was no Internet, so I wrote my budget out on paper (today I would use a site like Mint or PearBudget, or maybe even a Microsoft Excel spreadsheet). I created categories for rent, utility bills, and transportation, and I estimated my food and clothing costs as best I could. I worked my numbers out down to the penny, giving myself a wide berth for any non-fixed expenses. I wasn’t going to play fast and loose with money anymore.

Reduced Monthly Bills
I managed my thermostat by setting it at 68 degrees in the winter and 78 in the summer. I cut back on my cable TV plan, eliminating three paid movie channels and reducing my overall channel package. I also took shorter showers and hardly ever used my air conditioner. I cut coupons from the Sunday paper to save on groceries, and rented a studio apartment for dirt cheap housing.

Halted Personal Spending
I quit buying new clothes, stopped eating out entirely, and swore off sporting events and concerts. Instead of going out to bars with friends, I invited them over on weekends to watch movies or play board games. From time to time, I would fill up my car with gas and my fridge with food and see how many days I could go without spending any money at all. The only time I would allow myself a modest personal purchase was when I reached one of the benchmarks I set for myself concerning my level of debt.

Excelled at Work
By this time I’d secured a restaurant management position, making about $35,000 per year. I put my heart and soul into my job and garnered close to a $1,500 bonus check each and every month – when my counterparts weren’t seeing bonuses half that. Since that was money I hadn’t factored into my budget, it all went either to my credit card debts or to my parents for those college bills.

All along, I kept a keen eye on my credit card balances and watched the pay-down plan progress. I did the same for the debt I owed my parents. After approximately three years of uber-frugal living, I erased my credit card totals and got a glorious letter in the mail – just around the same time my parents told me I no longer owed them any money.

Final Thoughts

The moral of the story is simple. It doesn’t matter if you have $10,000 in debt or $50,000, you can do something about it. The biggest obstacle is committing to a debt-free life. Once you do, employ the above tips, persevere through the tough times, and you’re sure to find yourself debt-free one day, too. When you do, you just might be stunned at how light your spirit is, and how full your checking account is.

Are you currently in significant debt? If so, when are you going to do something about it?