Last payment: Goodbye to her consumer debt

In February, Amanda Grimm sent an e-mail to friends and family with some big news: she'd made the last payment on her 2004 Dodge Neon. Not a big deal, you might say? Well, it is for someone who spent the last 3 1/2 years paying off $26,670 in consumer debt.

Readers may remember Grimm from a Pay Dirt column in July, when she still had about $4,000 left on her car loan and about $1,000 in credit card debt. But after making her last car payment a few weeks after New Year's, Grimm, 29, is free of consumer debt.

"It's been great to just be done and not have to worry that it could all come crumbling down on me at any moment, especially with the economy getting as bad as it has gotten," Grimm said. "Anything could have toppled me over."

There were a few speed bumps along the way -- she had to dip into her emergency fund to replace her brakes -- but now she's a few months into saving up for a condo.

Grimm graduated from the University of Minnesota with nearly $45,000 in student loan debt. Now part of the administrative staff at Hamline University, she repaid more than $3,500 in student loans on her journey out of consumer debt. She's paying the student loans as aggressively as she can while saving for the condo.

She's still very careful about where her money goes. Her moneysaving and budgeting tactics are still in full swing.

"I learned how to be cheap in a time when you didn't have to be cheap, so it's been an easier transition for me," she said.

Now she uses an online financial resource that links to her bank account, categorizes purchases and helps craft a monthly budget.

When she first set out to pay off her consumer debt, she told her family to rethink their Christmas and birthday plans for her. She didn't want things from people in debt, and she wouldn't put herself further into debt to buy presents.

She still plans to keep holidays and celebrations low-key, and that's just fine with her.

"I'm not rich, and neither is my family. So it's been a really good experience for all of us," she said. "I feel we get more out of holidays and birthdays just spending time together, rather than having to spend a ton of money on gifts."

An extra push

She said the article was a big push that helped her get through the last few months of repaying debt.

"It was 3 1/2 years of having to say 'no' and focusing on the budget and trying to find something that kept me motivated, and this definitely helped," she said. "Then I was accountable to more people, too. I couldn't fall off the wagon because everyone I know was asking, 'Hey, how are you doing?' And I'd have to admit it."

Toastmasters International helped, too. Not only did the organization help improve her public speaking skills; it also motivated her to succeed. Talking to people about being frugal and sharing tips and experiences not only boosted confidence, but it educated others, too.

In a recent speech, Grimm offered money-saving tips -- such as borrowing DVDs from the library (it's free) instead of using Net- flix or heading to the multiplex. And in today's economy, such tips aren't just for people struggling with debt.

Catching up

She just started contributing to her 403(b), and more than 10 percent of her income now goes toward retirement -- and, of course, saving up for that condo. Within 18 months, she hopes the condo will be a reality.

"I will not take on any debt other than my home debt," she said. "If I can't afford to pay for it in cash, it's not going to happen. It just can't be that way for me."

What else does the future hold? Perhaps going out and telling people what she's gone through so they can be wiser about spending and saving. And who couldn't use a little advice these days?