Debt-Free for Life: An Interview with David Bach

Early this week, I had the pleasure of interviewing David Bach, founder of and 8-time New York
Bestselling author.

David’s new book is called Debt Free for Life. He regularly appears for series on Oprah, The Today Show, and Larry King Live.

Before we started the interview, David let me know that in his decade-plus experience with media and interviews – this was his very first Skype interview ever.

Viva la new media!


Below you’ll find our interview on good debt vs. bad debt, why America loves debt, stepping on the “debt scale”, the best way to pay down debt, and a new online tool – DebtWise – that helps you by automatically showing which debt to pay.

[If you cannot view the interview, click here to see it in your browser]

Below, I’ve included the full transcript from our interview. This one is really worth watching in full, but for those that can’t the text is below. 🙂

Hi everyone. It’s Baker from Man vs. Debt, and I have a special guest today. It is my honor to interview via Skype David Bach. David, thanks for joining us today.

It’s my pleasure. Great to be with you.

And if you don’t know David Bach, you may have been under a rock for the last 5 to 10 years, but he’s an eight-time—I think I have that right, David—eight-time New York Times bestseller, and he’s got a new book out, which I have in my hands. And that is Debt Free for Life by David Bach.

I’ll put mine in front of you. We’ll touch them.

Exactly. We’ll get it up there. I was sent the book last week. Your team sent me the book; thanks for that. And I did get to read through it and really enjoyed it. One of my most favorite parts of the book is, I think, on the first page of chapter one.

It’s you recount someone asking you your take on good debt vs. bad debt, and how that’s changed for you in the last few years. Can you share with the readers how that has changed, and what your view on good debt vs. bad debt is now?

Absolutely. What happened was, I do a segment every week on The Today Show called “Money 911,” and I’ve been doing it for two years now. We do it on Wednesdays. And two years ago, most of our questions started off, they were financial questions.

And what I started realizing over time was happening was almost all our questions are related to debt. I will tell you, over 75% of our questions are debt-related. Whether that’s credit card debt, mortgage debt, student loan debt—it’s all debt.

And in the green room I got asked this question, “What do you think about good debt? Is mortgage debt good debt? Is student loans good debt?” And I started answering like I’ve answered years in the past: “Yes, good debt is mortgage debt. If you borrow money to go to school, that can be good debt. If you borrow money to build a business, that can be good debt. But bad debt is credit card debt.”

I started answering with really what I would say is the standard answer, which is what we’ve all been led to believe. And I had this moment, kind of this epiphany sitting in the green room, where I looked at this friend of mine and said, “I’ve got to tell you something. This recession has really proven there’s no such thing as good debt or bad debt, there’s just debt.”

If you can’t afford to pay your debt, it’s all bad. And when you look at people who are losing their homes, they’re losing their homes because they have huge mortgages and they can’t afford to pay them. So I looked at her and I said, “I’ve got to tell you something. My advice to you is, pay your debt down as fast as you can. And there’s certain debt that’s worse than others, but really, the faster you’re debt-free, the faster you’re free.”

And that’s how I started the book Debt-Free For Life, was this idea that we have been led to believe—and it’s almost become like a myth—this idea that there’s good debt and bad debt. And that idea of good debt and bad debt has really led millions down the wrong path.

Yep. I can’t agree more, and I love—that’s why I said it was one of my favorite parts. I didn’t expect it to be there, but right when you dig in, I said, “I think I’m going to like this book,” right from the get-go, when you had that conversation.

And that leads us, I guess, why? My question for you is, in your opinion, why as a culture are we so addicted to debt? As a society or as a culture? Why do you think that is?

You have to go—Things have really changed. I go back to my grandmother. My grandma, Rose Bach, I’ve talked about in a lot of my books. And she was a Depression-era child. And if you have a relative that grew up in the Depression, they never wanted to have debt. My grandmother never had any debt. She didn’t—What’s your phrase? What do you say? Throw away the stuff?

Sell Your Crap, yeah.

Sell your crap. My grandmother, she recycled tinfoil before there was a green movement. She always paid cash for everything. And that’s how the Depression-era children grew up to be, and then they passed that on to the next generation.

Somewhere in the last, I’d say, two generations—really in the last 20-30 years, that whole philosophy of pay down your debt, have mortgage-burning parties, live free, is just gone away. And part of the reason it’s gone away is we have incentivized people to borrow more money.

Leverage, leverage, leverage.

I’m a huge proponent of home ownership, and I think it’s great that we get tax deductions. But I have to tell you, this whole tax deduction philosophy around borrowing money has really brainwashed people into thinking, “Great, I borrowed all this money, but I get a tax deduction.” In reality, who cares if you get a tax deduction if you still owe money? If all your income goes to making debt repayment, and you’re only paying interest, you’re really not getting ahead. So I just think we’ve been led down the wrong path, and I think Americans need a wake-up call. And they just got one with the recession.

Exactly. Again, I agree on every single point. Just shaking my head this whole interview, I think it’s going to be.

Moving on, I always like this question, to get it on different issues. For you, if I’m new and I come to you and I say, “David, I need help,” what is the very first step? For someone that’s deep in debt but they want to change, what’s the first step you would advise for them?

I’m going to go back to my own situation here for a second. It’s going to be completely on a tangent, but it’ll make sense. I’m on a juice fast right now. I’m making an effort to lose weight going in the new year, like a lot of people do. There’s two things in the new year you want to fix: your weight and your finances.

So every year, the first week of January, I do a juice fast. It starts my year off energized. I’m seven days into my juice fast; I started it early. So I feel amazing right now. But what’s the first thing I did? I stepped on my scale. My scale, I was at 150 pounds, which is not—155 pounds. And what I should be, Baker, is at 140. That’s my ideal weight.

So I know—Here, I step on the scale, I look down, I get depressed. I know I’m fat, for how I should be. And my goal is to get down to 140. Now I’m going to relate this to losing your debt. What’s the first thing you need to do? You need to step on the debt scale.

When people say to me, “David, I’m in debt. What should I pay off first?” How much do you owe, and who do you owe it to, and what does it cost? Every single time I’m out, I’m brought in to do TV shows and makeover shows—whether it’s Oprah, The Today Show, all these different TV shows—when I’m brought into people’s homes to do a financial makeover and they tell me what they owe, they’re always wrong.

In other words, I sit down and I go through with them—In many cases, I’ve gone into homes where—I did an Oprah show, the person, I was told going into their house they had $43,000 in debt. And when I totaled it up, they had over $90,000 in debt.

So the first step is, you step on the debt scale, and you look at “How much do I really owe? Who do I owe it to?” You list all your debt down. You look at the interest rate. And you have to do that first. That’s where you start, knowing exactly what you owe and how much it’s costing you. And then you start figuring out what order to pay it off in.

Exactly. That’s a great transition because I wanted to ask you—This is another interesting part. And I recognized this method, because I’m familiar with some of your past work as well. In the order to pay down debt.

Courtney and I, when we paid down our debt, we started with just the most emotional debt first. We didn’t use a given system. It just made sense to us and we went with that. And you have peers and colleagues that suggest anything from highest interest to lowest balance payment.

But you have a unique—I think it’s the method that you call the DOLP method, if I’m pronouncing that right. What is the DOLP method, and why is it beneficial for people to use that when starting to pay down their debt?

Super-simple. DOLP, first of all, it stands for done on last payment. I used to call it dead on last payment. Then my readers came back to me and said, “Yeah, but now that I’m debt-free, I don’t want to be dead.” So changed it to done. I listen to my readers. Just like you listen to readers on your blog, and so I changed it. So we call it done on last payment now.

And what done on last payment does is, it’s really simple. You list all your debt. I’ve got a little form you figure out. You take your debt, whatever it is, and you divide it by your minimum payments. And what that does is tells you how many payments it will take you to pay off that particular debt.

As an example, if someone’s got $500 on a Visa credit card, their minimum payment’s $50, they divide $50 by $500 and they find out it’s going to take 10 payments to pay it off. All DOLP does is it shows you which debt you have. It’s usually credit cards, but which debt you have, which will be the fastest you can pay off quickest.

What it does is it gives you the list and prioritizes it, so you know, this is my first, second, third, fourth, fifth debt. And the reason that’s so important is, what I teach is this. You make minimum payments on every debt, and you add all the extra money you can, then, to the number one DOLP category, which is the card or debt you can pay off the fastest.

Once that’s paid off, then you go to the next one, and you apply that money to the next one. Now, some people call this the snowball approach. Dave Ramsey calls it the snowball approach. Somebody was talking about that yesterday. It’s similar. It’s just a mathematical formula.

And the reason I teach it this way is that I don’t believe you should focus on highest interest rates first. I think the debt really is very much an emotional issue, and you need to see yourself make progress. So if someone’s got 10 credit cards, as an example, using this system, they quickly reduce the number of cards they have. So they see themselves making progress, they’ll have less chances for late fees or over the limit fees on those small cards.

But it’s that progress factor. “Wow, I can’t believe it! I actually got rid of one or two or three cards.” And that keeps them motivated to keep going.

And of course, they can more easily grasp their financial situation. Those people that think they have $43,000 and have $90,000 can see it when they have less accounts, they can see and feel and grasp it, which is an awesome way to pay down your debt there.

And we’re going to move on – I haven’t got a chance to fully use the tool, but you’re a big fan of Debt Wise, which is a new online tool. What I wanted to know—and you could even sell me on this, ‘cause I still need to go give it a spin, ‘cause it looks cool. What features of Debt Wise do you enjoy? Or I guess, what features excite you the most?

Here’s what happened. I’ve been teaching DOLP, this system, for over a decade. And as you know—I just saw your whole Unautomate Your Way to Wealth—As you know, I’ve written a book called The Automatic Millionaire. And what I’ve always taught people is, the more you can automate your finances, for most people, it’s easier because you don’t need discipline. And the problem with my DOLP system, the challenge, is that it’s manual. People have to write it all out, and then every month they need to go back and follow up. And they need to update their DOLP form.

And it’s amazing, because people have actually sent me, Baker—someone, we just did an interview for an AOL podcast. This woman, Genevieve, sent me all of her DOLP statistics going back to June of 2005. She’s got a DOLP team at work, and she had five years of data on her DOLP form.

Well, about a year and a half ago, I saw a banner ad for this product called Debt Wise. And I clicked on this banner ad and I said, “Oh my goodness. Who are these people? They’ve copied my DOLP system and they made it automatic.”

You call your lawyer?

I started going, “What is this tool?” Because how can they make paying your debt down automatic? As I clicked into the tool and went to see who the parent company was, the parent company was Equifax. And as I started playing with the tool, what I realized was, only a company like Equifax could do this, ‘cause they’re one of only three credit bureaus.

What Equifax does is, now with Debt—Sorry, let me just shut that off for a sec. Take that in another room. We’re at my home right now in New York, as the phone’s ringing. What Debt Wise does is, when you go in to and you put your information in, because Equifax is a credit bureau, they have all of your debt. They know what you owe.

So in seconds, Debt Wise pulls your debt, like a DOLP form and sticks it online, on a dashboard, and shows you: here’s all your debt, here’s what you owe, it’s your debt scale. It’s all automated, and it shows you—instead of you doing the math, it does the math for you and says, “Here’s your first priority debt. This is the one you should pay off first. This is the one you should pay off second, third, fourth, etc.”

And then every time you make a payment, because it’s being pulled off your credit file, they’re able to update it. So it’s the first time I’ve ever seen a tool that’s completely automated. For instance, is a tool I’ve talked about in the past I like. It’s free, but you have to pull all of your data into Whereas with Debt Wise, there’s no data to pull. It’s pulled off your credit file. Then you can also add debts if Equifax doesn’t know about it.

I saw this tool, reached out to Equifax, said, “I can make this tool better. You need me on the tool. You need videos. You need more teaching tools. And let’s partner together.” And that’s basically what we did. I integrated it into the book, and in Debt Free for Life, what happens is first I talk about DOLP.

And I say, “But if you want an automated system, here’s Debt Wise,” and then we give you a free month trial of Debt Wise. It’s a paid service. It’s $14.95 a month. I think it’s just seriously the best deal I’ve ever seen on a debt reduction tool. It’s cheaper than going anywhere. It’s cheaper than going to debt consolidation. It’s even cheaper than going to a nonprofit credit counselor.

So for those who want to do it themselves, I think it’s the ultimate tool to get out of debt.

Absolutely. And your team, I’m assuming the team at Equifax has sent over another free month link as well. I’ll put that in the comments, so anyone that’s interested in trying that out, they can get a free month with your book and I think they’ll have a free month here below this video, so people can try that out.

That sort of wraps up the question I had. But I try to end every interview with asking if the interviewee has any questions for the readers of this site. And obviously you know how the websites work.

We can ask the question. A lot of times, we get really great feedback from the community here at Man vs. Debt. So I guess in closing, do you have a question for the Man vs. Debt readers that you would like to pose to the readers?

Yeah, I do. And you know what? Let me ask this question, and I think it would be a great question to ask people who are following you and having a lot of success. And the question is, for those who are following you, who are on the journey to getting out of debt, what was the catalyst that led them to make a decision?

There you go. That’s a good one. Yep.

Because what happens for me—And I’d suggest this to you when people come up to you, by the way, and start thanking you for the work you do—Everywhere I go, people will thank me. They’ll tell me the success that they’ve made and the progress that they’ve made, especially around debt.

I always ask, what made you decide? Because one thing I’ll say—I told everybody the first step was to get on a debt scale and figure out how much debt you have—but the truth is, the first real decision, if you want to get out of debt, is to decide.

There’s a moment in which you make a decision, and my experience with people who truly get out of debt, they don’t make an “I’ll try it decision.” They make a “I’m done. I want my life to go in this direction. I’m making a permanent change until I’ve reached my result.”

Which is exactly what it sounds like you did. And I don’t know—Out of curiosity, what was the catalyst?

The birth of our daughter. Our daughter Milligan, when she was born, the day we came home from the hospital, that was sort of the smack across the face. And we sat down and we just said, “Our life isn’t in line with our values. We make fun of the people who live like we’re living right now.”

And then that was the impetus when we decided that we’re going to sell everything and travel the world, pay off our debt. And over the next year, we did. And that was the start of the site. So I had a very tangible moment, and I’ve very interested to hear other people’s as well.

Awesome. Well listen, congratulations to you. I think you’re a fresh voice in personal finance, which—

Thank you.

Which we need.

Thank you very much. And I look up to what you’ve able to do and all the people you’ve been able to help. And I appreciate you taking a slice out of your day to join me today.

My pleasure. God bless. You have a great day, and good luck with everything. Have a fun trip.

We will. Thanks, David. We appreciate it.

Take care. Bye-bye.

Thanks again to David Bach and his team!


I enjoyed the interview with David. You can find more information on David’s book and products on his website, Also, here’s the link for a free one-month trial of DebtWise (which David recommends in his book).

Let me know below what inspired you to get out of debt!

82 thoughts on “Debt-Free for Life: An Interview with David Bach”

    1. Click the link in the yellow box above (today only) and then click the picture at the top of the walletpop article. It goes straight to the PDF – there is no link! 🙂

  1. L. Marie Joseph

    Bravo, Thanks. WalletPop to the rescue. Earlier I went to his site

    Thanks again Baker

    You can delete my comments. Nice interview!

  2. For me, I guess I came to the realization that paying most of my paycheck to credit card companies was ridiculous and I didn’t have much to show for it.

  3. Great interview! I have read one or 2 of David’s books and they have really impacted me. I made the decision to get debt-free because I don’t want to have to be employed by someone else anymore. More importantly, I don’t want my husband to have to be employed by someone else anymore. Life is too short to be at a job you hate!

  4. Another great interview! I am almost debt free at this point. Realizing that I wanted freedom was what drove me to get rid of it. I don’t want to continually pay on several bills that never really dissapear because as they go down we add more to them. People can become trapped and that is scary. My one remaining debt is now shrinking each month, and my savings is growing each week little by little. Soon I will have freedom, and enough in savings to keep me out of debt. I can change locations, jobs, travel. Life will be so much better, I can’t wait!

  5. Great interview and an exciting new book. Like Baker, the catalyst for me was the birth of our first daughter. We started it two weeks before her birth and became officially debt free two weeks after the birth of our second daughter! We too bought into the “good debt” myth and really could have had our debt paid off months earlier. What kicked my wife in gear was listening to Dave Ramsey spell out the baby steps on his show. When he said people on the TMM pay off their mortgage in 7 years, she was sold. The motivation is all emotion.

    Have a great trip Baker

  6. Good interview though David only touched on why we are taking on debt.

    It’s because:
    – government offers tax deductions
    – more importantly our Federal Reserve and the method we create money (we print it from nothing)

    Ironically in the long haul (the next 10+ years) it might be best to have have debt if we experience inflation. So like sheep we all got debt during the housing bubble. Now we are paying all of debt down when it might be to our advantage.

  7. I became very dissatisfied with trudging in to a job that I hated every day. After doing some research and reading a lot of blogs, I realized that I don’t have to do this for the rest of my life. It’s very freeing!

  8. This is great! Thanks for the generous offer on the download. That is really nice and I’m excited to read it.

    I know exactly what the first real catalyst was: reading The Millionaire Next Door. I had no expectations of that book just that it was a great read. Well, it wasn’t great, it was life-changing. I just knew the millionaires next door were my type of people– not the flashy broke fakes we’re encouraged to emulate. I remember the author mentioning the TV show Lifestyles of the Rich & Famous and how boring it’d be if they profiles these people. That’s what got the gears turning, the brain going, and the “That’s it, I’m fed up with this garbage” mentality into place. It’s not been a perfectly smooth to freedom but I’ve been chipping away at it and I’m going to get there. Looking forward to this book for some assistance in that department!

  9. For me it was coming out of school with student loans and not wanting to spend my life stuck in that kind of debt ever again.

  10. Baker this is one hell of an awesome interview my friend!! This is the very next book I will be reading and I can barely wait to get to it!

    Your first question was my FAVORITE!! His answer was even better. I think it’s refreshing to hear others talk about how even though there are better debts than others to have, all debt is bad if you cannot pay it back.

    Love it!

  11. The catalyst for me is being tired of not having choices. I thankfully have a well-paying job, but with our debt I do not have the flexibility to change jobs if that means a pay cut.

  12. Wow! Great interview! David Bach!

    The catalyst for us was just plain being tired of seeing our money gone before we even got it! We were tired of not having any choice in where our money went.

    Debt is debt. Period. It’s a heavy, thick chain around your neck. Yeah, I like cash.

  13. Awesome interview! Thanks, Baker! My catalyst was actually just the realization that I could not continue to live in debt back in 2009. From then on, I have been cutting out the useless “crap” that I used to get and just try and live debt free. Thanks for sharing!

  14. My husband died unexpectedly from an aneurysm and I knew then I would be responsible solely for my financial welfare.

  15. I’d never heard the term “good” vs “bad” debt. To me all debt is evil because it keeps you from living your true life, being your true self. Personally, I’m tired of being a slave, slave to worry and anxiety and feeling like I’m not accomplishing my full potential because I’ve got the debt monkey riding my back. Four years ago I was completely debt free, I loved that feeling and I want to feel that way again. My catalyst for change? I want to be the person my family and myself can be proud of for overcoming, for prevailing. Debt is like a drug, a bad trip…and I’m done, I don’t want to ride anymore.

    Great interview Adam!

  16. I love the debt scale analogy. I’m currently on a weight loss journey, and I can confirm–the scale never lies.

    You can cheat your way all you want, but at the end of the day, you have to step on and consistently lose to make progress. 🙂

  17. Hi Baker

    We realized that we needed to go debt free, when we involontary had to terminate our ‘dream come true life’ in San Diego and head back to Denmark, due to a heavy debt burden.

    Have a great trip.


  18. Great one – thanks Adam. And big kudos to David!

    To answer your question – it happened long ago. Our catalyst was getting married. In fact, the only debt we’ve had is my own, since before meeting my wife. My wife, even since before becoming engaged, helped turn my financial values around. Together, we have lived below our means for close to a decade now.
    That’s especially a saving grace, since over the years, we’ve also made life choices which have drastically cut our income, too.
    It’s all good news when it’s by choice. And would be very bad news if not.

    Thanks again,

  19. I went through a divorce and about a month before it was final I got my Social Security benefit statement.You know, the one that shows your income for the years you’ve been working and what your projected benefit would be when you become eligible for SS. I looked at that and realized I had made over $125k in the 5 or so years since I graduated college but had nothing to show for it except a tiny 401(k) balance, a tinier amount of home equity and not quite $10k in credit card debt. All that time spent at work – probably close to 10,000 hours and I was no better off financially than when I started. Needless to say it was a pretty shitty feeling and at that point I changed.

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  21. When I finished college I had $20,000 of student loans, and I doubled it by *spending* my 20’s (literally!). As 30 approached, I woke up one day and thought, “I will be in debt for the rest of my life if I don’t change.” That was the beginning; I am still working at it, and I’ve had some setbacks (ok, I *caused* my setbacks!), but I am moving in the right direction. I’ve read and enjoyed several of Bach’s books, and I have recommended “Smart Women Finish Rich” to many, many women!

  22. Getting married was my catalyst – I don’t want money issues to be a division between us, so we did Financial Peace University within the first 3 months of marriage. We have massive student loan debt and will be chipping away at it as best as we can. I am eager to read that book!

    Great interview.

  23. I guess my catalyst was when I decided that the only person I could count on in life was me. Of all the things in life I wanted to do, I want to buy a house, to have that security, but I couldn’t do that with credit card debt. So I started paying off the credit cards, and saving for my house down payment, and in May of 2010 I was able to purchase my own house with an FHA Loan!

  24. Pingback: Monroe on a Budget » Book report: David Bach’s Debt-free for life

  25. I inherited my husbands debt when we got married 3 yrs ago. My instant goal was to get rid if it, which we did in a year. 12/31/10 paid off my car early! Mortgage is all that’s left and I consider it bad! Since first married I’ve been looking for frugality tips. I enjoy it!

  26. My catalyst was meeting the man I wanted to marry, and knowing that being debt-free would help us to more easily reach any future goals. I realized how much easier it would be to save for a house, or a move, or a trip abroad, or whatever, when we don’t have debt weighing us down!

  27. I forgot to add, for Mac users, that there is a piece of software called “Debt Quencher” by No Thirst Software LLC that helps you keep track of debt and prioritize according to different pay plans (lowest balance first, highest interest first) and makes a schedule of what amount to pay for what card. You can buy the software for a one-time payment of $14.95, which is exactly what EquiFax charges for just one month of use of its program. So if you can just get your current credit/mortgage/car payment statements and enter the balance, minimum payment, and payment due date into Debt Quencher for each of your debts, then you can use the $14.95 each month that you would have paid to Equifax and apply it to your snowball. You can give your money to Equifax if you like, but I’ll be using that extra $179.40 per year to pay down my debt even faster!

    Using Debt Quencher, you can enter your “snowball amount” each month and it will tell you where to apply the snowball; then you click one button at the end of the month to apply the payments in the software program. At any time, you can look at the payment schedule for each debt until the final payment to see when the payoff dates will be, and you can also see the total number of payments required for each payoff plan (lowest balance, highest interest, etc.). You can also play around with varying snowball amounts to see how much interest you will save over the course of the various payoff plans.

    I bought the software at the end of October (I’m not affiliated with the company at all, I just use the software and love it), and it has reduced my debt stress a lot. I can choose a plan and really see the progress that I am making, and I can know for certain the date that I will be debt free, under each of the various payoff plans.

  28. The catalyst forme was I simply could not get a good night’s sleep. I was raised by depression-era parents and for much of my early adult life I was debt-free. That all changed with a move across the country and a huge increase in our family income which we could not handle. We are now paying the price.

    Overspending & debt accumulation is a very slippery slope which only takes a couple of wrong steps to cause a person to go sliding completely out of control

    I am sleeping better now, but am still far away from my goals.

    Once again, Christmas was a killer.

  29. Great interview. I love Bach and will check out his automated tool. My change came after my second corporate job out of college. I got disillusioned after my first “dream” job was a flop and I lived without a purpose for a year (part-time jobs, killing time). When I finally got a decent paycheck again, I knew I didn’t want to live with debt or try to live beyond my means. Post college life had humbled (and educated) me, I guess.

  30. My catalyst was seeing the way my Dad kept on running up debt on unnecessary items. I realized I did not want to live like him always chasing payments.

    My first action to getting out of debt quickly, was moving to South Korea to teach English back in 2002. It only took me five months of hard work and saving to pay off my student loan. If I had have stayed in New Zealand or or went to China straight after graduating, I’d have taken years to pay it off.

  31. You were right…totally worth the watch. 🙂

    To answer Dave’s question, my motivation was when I lived in Paraguay. I wanted to leave my life in the US and stay there as a missionary of some sort (teacher, orphanage, etc). Literally the only thing in the entire world that kept me from staying there was my college debt. There’s no way I could have paid it off living down there with the income system I had at the time (a regular job in the US). Now I want to get rid of it as soon as I can, because the life I had for a year in Paraguay was the most fulfilling one I’ve had in my 32 years.


  32. I really enjoyed this interview! Good stuff.

    My catalyst was 2 years ago when I was living in New Orleans and I couldn’t find a job, wasn’t making any money. I would have been ok if I hadn’t had any debts, I could have gotten by with odd jobs for awhile. But because I had all these credit cards and stuff it just wiped me out. So that’s when I decided I HAD to lose this debt and all this liability. And I’m almost a 1/3 od the way now!

  33. Great interview! It was refreshing to hear a media celebrity to finally admit that “whether that’s credit card debt, mortgage debt, student loan debt—it’s all debt.” It was interesting to hear someone like David Bach say “we have been led to believe—and it’s almost become like a myth—this idea that there’s good debt and bad debt. And that idea of good debt and bad debt has really led millions down the wrong path.” I pray more people will hear that message, turn away from the marketers trying to convince them to buy more stuff, and make a commitment to pay for things with cash and not debt.

    Great job, Keep up the good work!


  34. A great interview Baker. Really enjoyed the questions you posed. I too am on a path of selling a lot of extra stuff and reducing debt in preparation for our transition to traveling the world. Ebay is a great place to unload all your crap as I did this week. For me tracking expenses is key to avoiding buying stuff you really don’t need. This year we decided for now on we won’t exchange gifts at xmas since we have too much crap already. Have a good one!

    Ken K

  35. Perfect cholce, Baker. Good questions! I’ve been a David Bach fan. You two are kindred spirits!

    My catalyst was my wife. I had listened to college counselors, loan officers and other students. “Student loans are the way to go. Everyone does it.”

    My wife said, “We don’t have to do this. How much will we owe?”

    Instead, we took one year off. We worked assorted jobs. As a result, we paid cash for the last two years of our education. We didn’t suffer academically or professionally from our unwillingness to mortgage our souls to get a four-year degree in four years. Ever since, we’ve remained debt free!

  36. Hi Baker,
    The real catalyst for me was when our union went on strike. This strike lasted for a couple of months. During this period, my finances were very difficult as my debt on my charge cards was very high. When the strike was finally over, I vowed from this point forward not to not carry unmanageable expenses again. Thanks to your web site and others, I’m now very close to being debt free.
    Also, thanks for your interesting interview with David Bach as I thought you did very well.

  37. I think the catalyst/motivator to start getting rid of our debt was when we came to a point where we were seriously considering the possibility that we might need to declare bankruptcy. Not one to shirk (sp?) responsibility, no matter how bad you think credit card companies are, I started learning and acting on our debt. While we still aren’t out of debt, we are miles from where we were and are making progress. I guess, sometimes, you have to reach the bottom (or frightfully close) before you make those changes.

  38. I had my “I’m done” moment in Sept. 2009 when I realized that I was working pretty much just to pay our debt and that it just kept on growing- my whole paycheck was going toward debt. We have 2 small kids and that wasn’t the example I wanted for them to see as they grow up. When I finally sat down & totalled it up, I was shocked. Happy to say that we’re 1/2 way done paying it off now (not including the house) and looking forward to having choices again in our lives. Thanks for the awesome interview and the free book download!!

  39. Pure and simple. I hated cutting coupons. No, I hated the fact that if I didn’t cut coupons, there wouldnt be enough groceries to make it through the week. Whew! I’m glad those days are in the history books now.

  40. My wake-up call when I was 50 with five kids and no retirement funds. I’m now 61, the kids are all adults, and I’m working like crazy to get my 401(k) funded.

  41. Baker,

    Great post! I appreciated David stating that all debt is bad debt. I worked my way through college to avoid debt. Getting a job out of college is stressful enough without a huge bill over your head! I have read personal finance books like David’s and the Millionare Next Door, but the catalyst for us was our vacation at the beach last summer. We realized that is where we want to live and we can make the changes to live there without debt. We are selling off our crap and coastal bound!

  42. The catalyst for me was realizing how being in debt imprisoned me and has taken away so many choices that I could have had. I am not working very hard to get out of debt, which will eventually give me more choices than I have now and hopefully, I can set myself up financially so that I am ok when I retire.

  43. Kimberly Caron-Lohman

    The catalyst for us was when my husband was laid off in November of 2008. We were heavily in debt and struggled for about a year to keep our heads above water. We plowed through our savings, and we were eventually unable to continue making even the minimum monthly payments and still keep our apartment. We had to move in with my family. Very humbling. My husband is now working again but it took him 21 months to find a job. We are down to about $10,000 in debt which we hope to pay off this year and move back out on our own. We’ve vowed to never put ourselves in that position again.

  44. Great interview Baker!

    Our real catalyst was getting married. Our combined debt was about $75,000(student loans and car debt) and it made us both feel like we would be in chains for a long long time. Luckily we had a few years as DINKS where we could put a full salary towards debt and. It was knocked out in under 4 years!

  45. The catalyst for me – the kick in the pants I needed to get serious about getting out of debt – was the realization that I would always, ALWAYS be dependent on some crappy job unless I got myself debt-free.

    That was pretty effin’ powerful, let me tell ya. And I really do not know why it took me so many years to figure it out.

  46. I’ve always been wary of debt. In the early 1970’s I was a happy, carefree teenager in southern California with financially stable, conservative, loving parents. What could go wrong? Well, the aerospace industry fell apart, and my dad lost his engineering job. My ‘super mom’ came down to earth and cancer confined her to bed as I accepted my high school diploma. She died at home the next week. I was 17. My dad and I would go it alone until a policeman knocked on the door at 2 am to tell me he was killed in a car accident. I was 18. Through terrible tragedy, this is what I learned: Love your kids–show them through your actions, and tell them you love them. Over and over. My parents left no doubt that I was loved. Their example has been the foundation of my life. Stay close to your extended family. My older brother stepped into my life, and even though I lived on my own, he was always there for me. Buy life and health insurance, a little disability too if you can swing it. Budget necessities on one salary even if you have two. Plan your second career, train and be ready for it before you need it. Live a rich life below your financial means. Fun does not have a price tag. Be the spouse of someone’s dream, and a trustworthy friend and parent. Raise your kids to be independent. You want them to love you, not need you. Teach them about interest rates and finance charges, responsibility and financial freedom, wants vs needs. Teach them to be resilient, to shake it off, bounce back and keep trying. Lead by example. Collect memories instead of possessions. Keep in touch with your relatives. Be nice. Take a walk. Laugh. Watch a sunset. Say thank you. Hang out with people who make you happy, and pray for the rest. Don’t let a day go by without being grateful. “The rich man is not the one who has the most, but he who needs the least.”

  47. My catalyst moment…

    The day I wrote down on a piece of paper “What are you doing today to be in Australia tomorrow?” I posted this on the doorway out of my bedroom. Multiple times per day I would see this and it kept me focused and motivated. It wasn’t, but 10 months later that I was headed to Australia to start my new debt-free journey.

    I have loved Bach’s work. So much in fact, that when I recently rid myself of my book collection, I found 3 copies of The Automatic Millionaire. Hahaha!

    Hope to win his new book…

    David Damron

  48. One thing I found to be effective in breaking the hold new consumer mentality had on me is to understand how advertisers manipulate us into buying crap we dont need. Once you understand their methodologies (fear, scarcity, social proof, benefit of the benefit, and so on) it no longer has effect on you.

  49. For me, it’s the realisation that I’ve never had a job and I finish University in the Summer. I’m in £20k of debt already and I’ve jsut got a part-time job for the first time. I looked at my finances for perhaps doing a Masters course.. and realised how little I have. I guess mine’s more about not getting into debt. I don’t intend to have a credit card for a few years; and then just want one. I don’t use my overdraft on my bank account.
    And I guess with the discovery of minimalism, I realised that I want to experience, not to own.

    Coming into the world with so much debt already and the possibility of having to get into more debt to cover my Masters – I guess I want a head start on how to deal with all that before I get too far into it. The book sounds like a great tool for helping me keep on top of things.


  50. I noticed my brother, who is married with a young son, spending everything he earnt on gadgets and cars. He’s just bought himself a 3D TV, complete with the glasses that cost hundreds each – and are easily breakable for a 6 year old! He bought a new car ‘project’, an old porsche which needed a serious money injection to get it running, and in order to buy it he ‘dipped’ into his son’s saving account which our mother pays into.

    I just thought – that’s not going to be me. Ever. I’m never going to need to steal from my children to pay for food, let alone new toys.

  51. For me, it was calculating how much in interest we were paying and how much we could save in interest and then free up in cash flow by paying the debts off early. I also realized no debt is really good debt.

  52. I LOVE this interview! My catalyst was that I received David Bach’s Automatic Millionaire for Christmas one year! The first few chapters are about that MacIntyre couple… I wanted to be like them!

    We’re now debt free, contributing to retirement, and renting while we save up our down payment. What David Bach says here in the beginning about all debt being bad, well that’s why we decided not to buy a home just yet. I’d love to have a huge down payment.

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  55. My catalyst was the desire to stay at home after the birth of my second child. I had returned after my first child and we decided that if we paid off all credit cards and car loans we would be able to make one income work. Since then we have also saved up a 6 month emergency fund, paid off 1 school loan and are hammering away at the second. At this point, I think my catalyst has changed. I now have the desire to get the rest of our debt paud off including our home so that my husband can persue his dreams with potentially a lower income. I hate that our debt has shackled him to a job that he doesn’t love.

  56. I think the catalyst moment for me was when my parents got divorced. I saw how my mom had to financially prepare herself to not only survive on her own but also raise two kids. It inspired me to make sure that I was always financially protected. I didn’t like the idea of being broke and homeless should something happen to my mother. Now, I am in a committed relationship and we both live together. I want to make sure that I am able to take care of me and him should something happen to one of us. There are so many people who suffer financially because their wants override their needs, and they do more spending vs. saving / investing. Since I didn’t know much about finances 10 years ago, I the first financial book I read was, “The Automatic Millionaire.” It had a catchy title and the thought of being a millionaire was exhilarating. It would definitely be great to get a hold of David’s new book, since he’s one of the few financial gurus who inspired me to change my life.

  57. My catalyst came 3 weeks ago at the Dunkin Donuts drive thru window. When I picked up my coffee I saw an elderly woman working at the window. I wondered whether she was working because she wanted to, or because she had to. I immediately thought that I don’t want to HAVE to work when I’m that age. So, I began my debt pay-down plan that afternoon.

  58. Great interview!

    For me the catalyst was going through a recent layoff and realizing that a large portion of my income was going toward debt. Didn’t like that feeling at all especially with 3 children. Bound and determined to get out from underneath the debt rock, grow the emergency fund/savings/retirement and feel the happiness of planned spending and debt-free living!

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  60. Having to pay off my parents bills when they died. While having to pay off a credit card in my name that my parents had used when they were alive to buy groceries, pay phone bills and the like. I told my husband that I was not going to leave bills for my children to inherit. We are almost debt free, mortgage only, we have so much more freedom, I can’t wait until we have all of the freedom.
    When my grandmother died she had all of her bills paid for the year, paid ahead. She owed no one. She was able to leave every grandchild a small inheritance. What a way to live, she lived in one house, paid cash for everything and always told us girls, always have money for yourself, you may want ice cream some day and you shouldn’t have to ask your husband if you there is enough money to buy your own ice cream.

  61. This was a good interview and I have about 2 books from David Bach. Want to get this new one as well.

    Dwight Anthony
    Financially Elite Blog dot Com

  62. 10 paymenis @$50 to pay $500. Wrong! You have to pay interest on the balance and add that to the next payment the to pay down in 10 months.

  63. Thanks for hooking up this interview! I really like this method of calculating which debt to pay off next. Puts it into a better perspective for sure. I have definitely found that you need to have progress and success when your reaching towards goals so that it is easier to keep going!

    Great interview!

  64. Catalyst was seeing my friends getting loans for their cars and houses, and wondering why getting into debt was ‘normal’ in America?

    Wife and I took Crown Financial course (free except for the textbook). Here’s what happened during the course:
    1. One student moved to a cheaper apartment to save money.
    2. A couple put their Mercedes 500 up for sale.
    Since the course, we bought an Odyssey with cash and a Civil with cash.

    The quandry is wanting to pay down the mortgage vs. saving up emergency cash due to uncertain employment status! We don’t want to lose the house!

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  66. Hello,

    I just wanted to let you know that when I read this post at the beginning of April, I had just been told by Sallie Mae that I needed a co-signer in order to get a loan to go back to school – even though I’m 26 and had a solid credit score of 716 and I’ve worked for the same company for 6 and a half years. I watched this interview and checked out the equifax debt wise tool, which I’ve been using ever since. The tool REALLY puts things in perspective and I was able to make some adjustments and pay off ALL of my credit cards leaving just the previous student loan debt and car loan debt. I am happy to say that today’s (may 17 – just one month after beginning to use debt wise) updated score is 764!!!! And thats not even including the $1000 I paid down on my car loan and the balance increase I got on one of my cards tilting the debt to credit ratio even further in my favor! Equifax now rates me as having EXCELLENT credit and only a 4% risk for loan default – greatly improving my chances of getting a loan to go back to school next fall (premed!) Thank you so much for posting this interview, it has made such a difference for me!

  67. Thanks for the ideas you are sharing on this weblog. Another thing I would like to say is the fact getting hold of some copies of your credit history in order to check out accuracy of each and every detail could be the first motion you have to undertake in credit score improvement. You are looking to clear your credit profile from detrimental details faults that screw up your credit score.

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