I find that debt payoff stories can be met with two distinct responses. They will either be met with joy or disbelief. Even the same story can be interpreted two different ways too. A lot of this depends on our own experience with money that will factor in to how much we believe them. If they don’t seem quite right in the beginning though, how are we to respond to them? Should we believe all debt payoff stories?
Middle Class Income Pays Off $200K In 2 Years!
Does it feel like you see this a lot? A quick Google search of “middle class income” will give you a variety of results for what a middle-class income looks like but there seems to be a common thread.
Per these results, the median middle-class income seems to be $75,000 a year. That surely won’t pay off $200K in 2 years.
The range of “middle-class” was roughly $30,000 – $100,000 a year and one said up to $120K a year. Even at $120K a year, using post-tax dollars to pay off your debt would not be enough to pay off that much debt and still live off it in any sort of normal manner.
Looking at the range of middle-class income there is a really big difference between making $100K a year and $30K a year.
Often, I see those making closer to $100K a year saying it is very possible to pay off a ton of debt on a middle-class income. This is something I have said myself. I will classify that by saying I always thought middle-class meant making at least $50K a year and maxing out in the $130K-$150K a year, but not $30K a year.
I also see those making less than $50K a year showing skepticism about paying off much debt at all, let alone an amount more than $100K.
Our Income During Our Debt Payoff
And to get the elephant out of the room about our own debt payoff. We paid off $107K in 33 months on a middle-class income.
Well, I guess that depends what definition of “middle-class” you want to use.
Between the two of us, we combined to make $83K in the beginning and finished at $107K ironically. We also had about $10K in the bank we drew from during that time. All of this I have written about and shared previously because I want you to have a reference point. We also had NO kids and rented at the time.
When listening to debt free screams on the Dave Ramsey show they always disclose their income which I applaud Dave for doing. Hearing others say that they paid off ‘x’ amount making ‘y’ per year helped us realize that we too could pay off our $107K of debt.
It still seemed daunting in the beginning since we projected to pay it off in 5 years, but we pushed onward regardless. Then, about mid-way through our debt payoff we realized that we were in fact keeping up with or exceeding those we heard on the show.
In hindsight, we could have paid it off faster. We chose to travel some during that time that could have resulted in a few thousand more dollars to put towards debt. We were pretty hardcore the rest of the time, but we could have taken it to another level to squeeze out a bit more for debt payoff.
Debt Payoff Stories And Income
Because of Dave Ramsey, I thought all debt payoff stories provided their income as a reference. When I started reading blogs about debt payoff or FIRE (financial independence retire early) income was not provided in most articles. I found that odd because it can lead to confusion and disbelief on the listeners behalf and get in the way of the message.
Once you see the comments on those stories there can be a lot of push back, particularly in national news stories.
This includes stories where we were featured but our income was not disclosed. The funny thing was that the income the commenters said most people make, and therefore was not possible to pay off this much debt, was what we actually made during that time.
The downside is that in their effort to find an excuse for why ‘normal’ people can’t pay off that much debt they are missing that we are ‘normal’ people who did pay off that much debt and they can too in similar circumstances. And by ‘normal’, I mean very weird if you knew the music I listen to.
I think it is fair to say that there are stories out there that we should be skeptical of. To be honest, most debt freedom stories are taken at face value that they are accurate so there is room for some dishonesty to slip in.
One forgotten mention of a big bonus or selling an extra car will start to skew the numbers and cause disbelief. Or maybe you lucked out and pay $400 a month for rent (or less!) or are living rent free with your parents.
The trick though is to listen to as many stories as possible and you will start to see patterns for what is reasonable. I have found that making a middle, to upper middle-class income should allow you to pay off about $30K a year in debt. You might disagree with that, but that is what I have noticed listening to debt payoff stories for the last 7 years and is based on our personal experience.
I understand being skeptical, as I was in the beginning, but this skepticism can usually be resolved with more information provided rather than assuming the worst. It is possible some people are seeking attention, so they stretch the truth a bit in their stories. As I said earlier though, if you listen to enough stories you will start to be able to discern what is possible or not based on particular incomes.
If someone has a high income, then they have a high income. It doesn’t mean that they are lying or that we need to bust them on the technically that maybe they are a bit above what is described as middle-class. Making $140K a year is not the same as making $300K a year.
How This Affects You
I mention all of this because it is easy to be resentful and dismissive of higher incomes and their success with debt payoff.
The question though, is can you still learn something from them even if you don’t make as much?
The answer is yes. There is always something to learn from them. Whether it is a new tip or just a reinforcement that you are doing the right thing, you can benefit from listening. Maybe they have a great shopping tip or know of an app that is perfect for you. You want to listen to as many stories as possible, even the ones that don’t seem so impressive at first blush.
The problem is that our jealousy gets in the way and we become dismissive of these stories and it is easy to attack them.
I am very good at looking at a situation and finding an excuse for why I can’t get the same results. That character trait of mine is one that holds me back and it prevents me from realizing my potential.
I don’t want the same for you.
Those Dave Ramsey debt free screams I mentioned earlier, I was very dismissive of those in the beginning. I did not find them inspiring. Instead, I found them to be deceiving because I didn’t want to change. I wanted their results, but not to put in the work. I’m only speaking for myself here and am in no way talking about any specific debt free stories.
Just because I thought they weren’t telling the full truth does not mean that is correct. I know this is true because we became one of those stories. When I put aside my pride and was honest with myself, that is when true growth occurred.
For Those With Lower Incomes
So, for those that do have a lower income, it will be more difficult to pay off debt or save, no doubt. You simply have less money available.
There are three points that I want to make.
- Despite the lower income, listen to as much advice as you can to make yourself stronger. Don’t get caught up in excuses or try to dismiss the stories because it isn’t convenient for you.
- Where you are today, is not where you have to be in 5 years.
- It does not prevent you from being smart with your money today.
Change is possible. You can have a higher income in the future.
It will take work, but it is possible to raise your income to tackle your goals. In the short term it might seem frustrating, but in time, change can and will occur if you are focused on it.
With that said, every decision you make with money today, affects your future. Today, you can make sound financial decisions that will set you up for success later.
It might not seem fair that you don’t make more, and it truly might not be, but being dismissive of other’s suggestions or stories will only hurt you in the long run.
Should You Believe All Debt Payoff Stories?
I find that our opinions of debt payoff stories really depend on how you look at them. If we approach it negatively and skeptical, we will find something to pick apart and tear them down.
If we think it is all sunshine and puppies then maybe we aren’t analyzing it enough to see how it can help us or read the fine print. It comes down to your mind frame, but we need to be able to process these stories and find something that you can draw from.
Do you have a mind frame where everyone can have abundance and find success? Or is it a mind frame that depends on others failing so that only you can have success.
It might be the same story that two people hear, but if one has an abundance mind set and the other has a scarcity mind set, I guarantee the abundance mind set will get more out of it.
If one seems too good to be true, then skip it. There are plenty others out there by honest people that you can find inspiration and knowledge from. Focus on those and you will start to see true change in your lives.