Debt Free & Loving It: A Success Story

A reader sent in a very inspiring story that I thought some of you might like to read.

Due to a divorce at a young age, I was forced into bankruptcy.

Since I have claimed bankruptcy, I have sworn off credit all together. I pay for everything in cash. I have a savings account into which I put $100 a month and an emergency account into which I put the same. I also make all of my Christmas presents (baking and crafting). I follow a lot of your rules about spending and also follow Gail Vaz-Oxlade‘s advice to a ‘T’.

I lost my job a couple of years ago due to the company ‘going under’, but with unemployment benefits and my 6 months of income saved up, I didn’t take much of a hit. I still had about 4 months left in the account and have since built it back up. I use coupons for everything and make all my meals at home.

I have my daughter doing chores using My Job Chart, and she collects ‘points’ which translates into an allowance. She is allowed to spend half and save half (right now that is $5 a month in savings and $5 a month to spend). I have a secured Mastercard for my online purchases that has a $300 limit. Apparently these cards build your credit faster because they report your history more frequently then regular credit cards. I own my own car and rent my house. I don’t owe anyone anything and although it has taken me longer to get to where I am then a lot of my friends, I’m glad I am not worried about a mortgage, credit card payments or lines of credit.

I turning 30 next month and work part time as a bank teller and full time as a wedding photographer. The bank gets me no fee banking and health benefits. The wedding photography means that if I ever lose my job I have something to fall back on AND it means I can do something I love. It has taken a lot to get here. But I will never EVER go back to the way things were!

– Rachel

Do you have a success story you’d like to share? Submit it here.

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  1. Trudi says:

    great story, good for her!

  2. Carrie says:

    love the idea of the chore I’m working on that with the kids too.

  3. What a great and inspirational story. I now myself that couponing has become a way of life for me and my family too and I stated it when times were tough. Now I do it not only for the money savings but I get such an adrenaline rush at the check-out.

    I’ve followed Mrs January since starting this venture and appreciate all the great tips, weekly savings info by store and her book was very helpful too.

    I’ve kept my end of the family budget up by couponing and started my own business with Gold Canyon candles ( I’m not putting that out there as a way to get more business but to let others who face money crunches like I did know that there are options out there to make some great income and would be happy to chat with anyone who wants more information about joining a great team with me.

    Thanks for sharing this story and for all that you do for us.

    Have a scent-sational day!

  4. Leanne says:

    i really think this is commendable, but i don’t think having a mortgage is a bad thing. i think it will pay off much more in the end than just renting for your whole life.

  5. TeresaAngelina says:

    Well done, Rachel! But I agree with Leanne who mentions a mortgage is no bad thing. Think of it as another form of retirement savings. And should you ever find yourself in a rough situation and have to sell, you still have equity. Awesome work – you are rightly proud of yourself.

  6. Jan says:

    I worked in the field of bankrupycy for many years and learned some valuable information that I’d like to share.
    There is little or no stigma attached to filing for bankrupcy anymore. The majority of people who file for bankruptcy have not actually mismanaged their money, but can’t make payments due to external factors, such as divorce, job loss,etc. Bankruptcy gives you the opportunity to make a fresh start without punishment or judgement. If you can’t make monthly payments, I suggest making an interview with a Trustee in Bankrupcy and he/she will advise you on the best course of action.
    If you can’t handle credit, and there’s lots of us out there, cut up your credit cards and pay by cash. It’s amazing how quickly you get used to paying with cash.
    Lastly, keep a journal on where your money is spent and revisit it at the end of every month. It’ll be an eye-opener. There’s lots of ways to cut costs painlessly.

  7. Trudy says:

    Great story. I agree, renting is like throwing money out the window. Never rent when buying is a option. We bought our house in 2006 and today we have over $ 150,000.00 in equity. We were lucky to buy at a time when the market for buying a house in our area was low and the next year it boomed. Also having a variable mortage rate helps to keep interest low and pay off your mortage faster… just have to keep a close eye on it.

  8. rachel says:

    Thank you everyone for the support! It’s been a rough ride but I’m almost glad it happened. I would agree about the mortgage, however, with bankruptcy on my history a mortgage won’t be in my cards for another 7 years. I agree with Jan. I’m not a bad person. My divorce meant I didn’t have the income to pay my bills and felt it was My best option. some people make me feel bad about it but in the end its My life and I have to live with it.

  9. Rachel says:

    Thank you everyone for the support! It’s been a rough ride but I’m almost glad it happened. I would agree about the mortgage, however, with bankruptcy on my history a mortgage won’t be in my cards for another 7 years. I agree with Jan. I’m not a bad person. My divorce meant I didn’t have the income to pay my bills and felt it was My best option. some people make me feel bad about it but in the end its My life and I have to live with it.

    Thank you for sharing this. Hopefully it helps others.

  10. Rachel says:

    Thank you for posting my story. And thank you for the positive support and feedback. I’m not going to lie. It’s been a very hard couple of years but I am also grateful for what has happened because without it I may have been like many Canadians and totally blind to the world of credit. The main reason I wrote this is because I see friends and family making the same mistakes I did. I only owed $14,000.00 but it was way more than I could handle on my own. And they were for stupid things I should have never wasted money on (including a wedding that only lasted in a 6 month marriage) or keeping up with the Jones’. My friends and family don’t always understand when I say I can’t do something because I don’t have money because for them, they just pull out a credit card. For me… every penny I earn is what I can spend/save. I don’t have an alternative. Jan- I agree with your advice. It was a great weight lifted off my shoulders. My main issue now is building my credit. Of course I would ideally like to own a house and have a mortgage but a bank won’t touch me for at least 7 years so I just rent. And I think that’s fine for now. You’d be surprised what you can rent. I currently rent a condo and am saving up to rent a townhouse in the next couple of years. You can even rent entire houses if you want. Some of them are new… never lived in and worth a lot of money. People who can’t afford their mortgage tend to rent out their place. And that seems to be a good thing for people like me. I still have problems with money. There are times where the cupboard is bare and we eat noodles for dinner but I try my best to stay on budget and teach my daughter about the importance of saving. And how to spend wisely. She even looks at flyers and makes lists of things she likes that are on sale. My parents never taught me these things and I think that is the root of the problem. Teaching your kids about money can be fun. Right now she’s saving up for a bike and loves getting stickers on her job chart to see how close she is. I’m saving up at the same time too… for a second wedding. To a guy I can talk to about money and be on the same page with. 🙂

    Thanks again!


  11. Melanie says:

    It’s easier said than done about buying a house. I am a single mom of 2 children, which I have 50% of the time. Days, weeks and months are hard to get by on my small salary and the little pension I do receive. I have a hard enough time making ends meet with: rent, car, daycare, clothes, food, gas ….. how do you expect there to be any left over? It is impossible to save even 100$ a month and yes I live pay cheque to pay cheque. Couponing has helped. Of course if I could I would buy and YES is it considered to be an investment and a retirement savings plan, but alone it’s very difficult. It’s just frustrated me to read this post because you make it seem so easy to do, buying versus renting, but when you don’t have a choice, that’s what you get. Thank you….

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