Home > Uncategorized > How I Paid Off $100K of Debt With a Side Job

Comments 0 Comments

Nick Gabel had run a convenience store for about four years when the building he rented was sold. He wasn’t able to work out a deal to stay where he was, and he found himself both $100,000 in debt and without a job in early 1996.

He said he didn’t want to file bankruptcy because he hoped to invest in real estate again, and he couldn’t afford to ruin his credit score. He soon got a union job, working for a phone company, starting at $7.17 an hour. He said he knew that after about three years, he’d likely be making close to $20 an hour, but in the meantime, his 35-hour-a-week job wasn’t going to help him make much headway — it would barely cover current expenses. So he took a second full-time job helping to care for disabled people. His phone company job offered split shifts and weekend work, which made it easier to work an overnight shift, Sunday through Thursday, at his second job.

He was careful to be sure the income from his second job went straight to paying off debt. Most of his debt was on credit cards, and he called all his credit card issuers to ask for lower rates. “Some reduced them to 5% and some reduced them to nothing, which helped a lot,” he said. He reviewed his progress and strategy every month to see how things were going. He later looked into balance-transfer and low-interest credit cards and was able to help himself that way, too. That strategy was available to him because he had maintained a good credit score. (If you think it’s right for you, you may want to check out the picks for the best balance-transfer credit cards.)

He ended up using the “snowball” method to tackle his debt, paying off bills from smallest to largest, and once one was paid off, redirecting the money that had been paying that bill to the next-smallest one until all are paid off. He estimates that it took about four-and-a-half years. (He was able to leave his second job in mid-2000, he said.)

No Frills

He describes his lifestyle then as “like a college student,” but it sounds far more spartan. He kept his thermostat set at 60 in winter unless he had guests, replaced his incandescent bulbs with CFCs, signed up for a barebones phone plan and scrutinized every expense. There was definitely no money for pizza and beer. (He did invite friends over for potlucks and the like, and if he went to a movie with friends, it was a matinee.) He learned early on that he needed to put aside $10-$15 a week into what he called a “contingency fund” to cover expenses he had not budgeted for, from home repairs to birthday gifts for nieces and nephews.

He said he always saw “light at the end of the tunnel,” and he was able to buy real estate again. Now retired, he says the effort to pay off the bills and preserve his good credit was worth it.

He retired in 2012, and bought a house in Florida with cash. These days, he typically keeps his thermostat at 78 and uses fans to keep cool. “I’m still living the frugal lifestyle using a lot of the things I learned along life’s way and applying them now to the retirement lifestyle. I always look for deals, discounts, coupons, special sales, used items, etc. It just makes a lot of sense to me to pay less for whatever I need and save up for those things that I want,” he said.

His tips for others who are working to pay off big debt are:

  • Be aggressive. Paying just the minimum won’t do the job, he says. “If people can pay off a $35,000 car loan in five years, why do they just pay minimums on student loans? If you just pay the minimum, it will never go away.”
  • Automate it. Don’t give yourself the opportunity to spend money that is earmarked for debt. (Also don’t risk a late payment or oversight.)
  • Use windfalls. A birthday check, a bonus or a tax refund can help you reach your goals faster, he said.

The payoff? Well, he’s considering buying a summer home in Massachusetts, where he travels frequently to escape the summer heat and visit friends and family. And, it’s financially realistic to do so.

If you’re working on digging out of debt, you may also want to keep an eye on your credit scores to check your progress and watch for important changes that could signal a problem. There are many ways you can get your credit scores for free, including Credit.com, where two of your credit scores are updated every 14 days for free.

More on Managing Debt:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team