What Would A $40,000 Raise Feel Like?

(Guest Post by Travis of Enemy of Debt)

Imagine coming into work Monday morning, and being informed by your boss that your yearly salary is being increased by $40,000. Doing some rough estimating, after Uncle Sam takes 25% you’re left with a cool $30,000, which works out to an additional $2500 per month.

How would you feel? What kind of impact would that make on your life? I think most people’s reaction would be a cautious smile until you exit the workplace at which time you may find yourself doing back flips through the parking lot while screaming at the top of your lungs.

I’m not sure exactly what my response would be, but my wife and I are going to find out on March 28th, 2014. We are three and a half years into a debt management program (DMP) eliminating our credit card debt. Our DMP payment is our single largest monthly bill. It’s bigger than even our monthly mortgage payment, and not just by a little bit.

How in the world we got there

My wife and I began overspending from the very beginning of our marriage. We supplemented our income with credit cards thinking that eventually our pay increases would outpace our spending and we’d see our debt disappear. However, with each pay increase, the extra money wasn’t used to reduce our debt. Instead, it was used to simply keep up with the rising minimum payments on our lines of credit. More income allowed us to charge more, resulting in more credit card debt. It was a vicious cycle we just couldn’t break.

Eventually we hit that crossroads where we were unable to meet our monthly financial obligations. We enrolled in a debt management program in which we make a single payment to our debt relief company each month. Part of the enrollment process was to add up all our debt, which inexplicably, we had never done.  It was the first time either of us saw how much credit card debt we really had, and how much we were paying each month to credit card companies.

It was mind numbing.

We had accumulated $109,000 in credit card debt, and our monthly payment to our DMP was going to be $2,489. In order to successfully make a payment that large each month, we were going to have to make some major changes to our lifestyle.

What we decided to do about it

Over the past few years we have been in a mode of continuously cutting expenses. Every month we scrutinize every bill asking ourselves if that service is worth keeping, or if we could somehow  reduce it. Unfortunately, eliminating unnecessary expenses has been the easy part.

Making payments to our plan and reducing spending will go a long way towards eliminating our current debt, but the hard part has been changing the behavior that led us into debt in the first place. We needed to learn the skills to live within our means, and handle our finances the right way:

  • Communication: Vonnie and I didn’t communicate about our finances at all. Most, if not all, of our financial discussions consisted of her asking if we were OK, and me saying, “We’re good.” Which was a complete lie. We needed to learn how to sit down and have honest discussions about our income, our expenses, what we could afford and what we couldn’t.
  • Budgeting: For the first 13 years of our marriage our budget consisted of a worn out piece of paper folded up and tucked in the back of the checkbook. It listed our monthly bills, our income, and money left over. It was certainly a good start, but when we ran out of money, we’d just use a credit card. That’s not a budget, that’s a recipe for financial disaster. It’s taken several iterations, but we’ve finally found a system that works for us.
  • Be Selfish: I read a post recently that said we should be selfish with our money. That phrase really hit home for me, as I think of it often. When Vonnie and I create our weekly spending plan we evaluate every potential expenditure to determine whether it’s worth parting with our hard earned money.

It has been a difficult process for my wife and I to learn and truly execute these new skills, but we’re definitely traveling down the right path at this point.

We are projected to make our last payment on March 28th, 2014. When that last payment is made, we will be free of our credit card debt, and instantly get a $40,000 a year raise. Our available funds will be increased by $2,489 each and every month.

That’s a lot of money.

What this new “raise” will mean

We both agree that we need to have a clear plan as to what we’re going to do with that extra cash flow once it arrives. We’ve talked about it several times and have come up with a couple of major categories:

  • Retirement: Fortunately, even as we funded our lifestyle with credit cards, we put a fair amount of money into a 401K early in our marriage while the internet boom was still in full swing. Even though the 401K had to be neglected while we work our way out of debt, my employer still contributes some amount each pay period. That being said, once we have these extra funds available we’ll start throwing more dollars at retirement.
  • Education funds for the kids: We had intended to start education funds for the kids immediately when they were born. Our out of control spending lifestyle prevented us from doing that, though. We may not be able to help them as much as we had wanted, but we’ve still got some years left to save for them.
  • Emergency Fund:  Bigger is better, right?
  • Increase Monthly Budget: I’m just going to go full frontal and admit it. We’re going to spend a little more on ourselves each month. With the spending cuts we’ve made over the last three and a half years, as well as the income increases we’ve gained due to taking on extra work, we’re in a pretty good place financially. We’ve even started to build an emergency fund. I feel life is meant to enjoy and given such a substantial raise I don’t think it’s out of line to enjoy it just a little bit more.

So what will I feel l when I get that $40,000 raise? I think I can sum it up in one word: Secure.

What are you doing to get your raise?

Travis blogs at Enemy of Debt where he candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he’s learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family.

[EDITOR’S NOTE: That debt management program (DMP) Travis mentioned and is enrolled in? It’s through a company called CareOne Debt Relief Services – a place Travis also blogs at and shares his debt killing stories on :) For those who were wondering…]

(Photo by: Vectorportal)

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  1. Lance @ Money Life and More November 15, 2012 at 7:40 AM

    My girlfriend graduated from college with near $80,000 in student loan debt so I’m aggressively saving (to pay when we get married) and she’s aggressively attacking them to get that out of the way! You actually are getting an even bigger raise because you won’t have to pay social security or medicare taxes on your raise either, that is if you live in the US.

  2. Joe Cassandra November 15, 2012 at 9:15 AM

    Great mindset on taking out your debt. My wife and I started this track as well, think about how much flexibility we will have when we pay down our debt! It’s a great motivation tool, forget looking at it all depressed. See it as the bridge to greener pastures.

    Thanks Travis!

  3. catherine November 15, 2012 at 9:23 AM

    You guys are rockstars. Our DMP payments isn’t near that high but when we do pay about 1100/month in debt payments (DMP, student loans and LOC) not including car or mortgage. When we’re ‘debt free (ie paid off everything minus car/house) a big chunk will be going towards retirement for us, we have no company retirement funds so it’s 100% on us. We will up our budget a little but not much, probably only like 50/week, save for vacations again and up the e-fund….I can’t wait for this day!!!

  4. Holly@ClubThrifty November 15, 2012 at 9:57 AM

    This is great!

    The same thing kind’ve happened to us, just to a lesser extent. We paid off two cars, student loans, and all consumer debt earlier this year. The combined payments were nearly $1000 per month so we felt like we got a huge ass raise! Now, once our house is paid off, we will be getting a $3500 raise per month (that is what we are paying to pay it off early). I CANNOT WAIT….

  5. John @ Debt Advice Resource November 15, 2012 at 10:10 AM

    Travis, brilliant article! That’s exactly how it look at debt in my opinion – consider what you will do with all the extra money! Before, you probably didn’t see it or really get the benefit of $2,500 but now i’m sure you’ll appreciate it all the more since you’ve been saving and repaying so hard!

    Well done on reducing the $109K!!!

  6. Paul November 15, 2012 at 10:13 AM

    This year we are averaging a little over $2000 per month going to credit card debt. We have around $25,500 left and expect to finish that off by the end of next year. At that point as followers of Dave Ramsey, we will fully fund a 3-6 month emergency fund (minimum $15,000). Then we will begin investing a little over $1200 of the $2000 per month. $500 per month will go towards paying off our mortgage early, and the remaining $300 is for fun.

  7. Kevin Vesga November 15, 2012 at 11:21 AM

    How much money do you make? I think your “raise” is equal to my dad’s paycheck.

  8. L Bee and the Money Tree November 15, 2012 at 11:38 AM

    Amazing! That is so much money-congrats on having it all back :) Yours is an amazing story.

  9. Michelle November 15, 2012 at 11:42 AM

    This is great! The extra money would definitely be nice to have :)

  10. Financial Samurai November 15, 2012 at 11:46 AM

    Hey Travis! Congrats on paying off all your consumer debt. You’ll love the extra cash flow for sure.

  11. Pauline November 15, 2012 at 12:08 PM

    A $40000 raise would feel like $5000 worth of fun and $35000 worth of investment to me, based on previous raises. A big boost to my net worth. I can’t imagine how happy and relieved you guys will be in 2014.

  12. Kris November 15, 2012 at 12:44 PM

    Great for you! I’m scheduled for a big raise in January. Well, actually it’s only 2%. But bigger than the 0% raise we got last year. Now, if I made several millions a year in salary 2% would mean something :)

  13. Travis @debtchronicles November 15, 2012 at 12:52 PM

    @Lance – Congrats on working to take that debt down early! You and your girlfriend are starting your life together off on the right foot!

    @Joe – So TRUE! To tell you the truth, when we first started the program, even though the number was HUGE, and we would be paying on it for 5 years, it was a complete RELIEF to have an end date. Before that, we had no end date, no way to know if we’d ever get out of debt. With each payment that finish line gets closer and closer, and we get more and more excited!

    @Catherine – I know that I’m *extremely* lucky to have an employer that not only has a 401K match program, but just flat out contributes a percentage of income to the fund. If this wasn’t the case, our retirement picture wouldn’t be nearly as good as it is right now. I’m looking forward to fully funding that retirement account – I plan to live a LONG LONG time. LOL. Looking forward to traveling the DMP road together with you….it’s always nice to have someone to walk with. :)

    @Holly – AWESOME job in paying off those debts….getting your house paid off will not only give you that huge ass raise – but how exciting will it be to walk up to your front door and say, “I OWN THIS!” Kick ass cool!

    @savyfinanciallatina – Thank you so much! Vonnie and I are very much looking forward to the day when all our credit card balances are zero and we can essentially “restart” our financial lives.

    @John – Exactly! We’ve never really “seen” that $2500 a month, which is why it will feel exactly like a raise. We’re determined to use our full income wisely, and never end up in this situation again!

    @Paul – that sounds like a GREAT plan – and congrats on working your way out of debt as well! Although we didn’t follow the Dave Ramsey plan, I have nothing but respect for his advice and programs. I’m happy to see there’s an amount in that plan for fun too….at that point you’ll have paid off your debt and deserve to have some fun too!

    @Kevin- My wife and I do have a great household income….you have to in order to be granted $109,000 worth of credit. However, our problem has never been an income problem, it’s always been a spending problem. Things snowballed and got completely out of control – I seriously paused before I put these numbers in the post…..because even for me it’s hard to look at them and say anything but, “WTH?” The bottom line is, no matter the amount of debt, or the amount of income – debt sucks!

    @Lbee, @Michelle, @financialsamurai – Thank you much for your positive comments – although the real story here isn’t the amount of debt we’ve paid off, or even that we’re going to be credit card debt free in March of 2014. The real story here is one of two people, madly in love, who finally learned to open up, communicate and trust each other fully. And lived happily ever after. :)

    @Pauline – I like the way you think. :) The vast bulk of that raise will indeed go into investing and saving….but there will definitely be an amount for increased fun! Maybe J$ will welcome me back to do another post in 2014 to talk about just how it does feel once we make that last payment!

  14. LB @ Finanical Black Sheep November 15, 2012 at 2:29 PM

    I got rid of debt in 2011 and then picked some back up this year. I am scheduled to be rid of it again within the next couple of months. I don’t plan on doing anything different, and I don’t see why I should. Right now I could pay off debt if I skimped on school or took less classes, but I am extending the debt slightly, so I can take more classes. The riddance of debt will only allow me to take more classes for school, but still be on a tight budget. Since our income is around $40,000 to $50,000 anyway, having some debt or no debt doesn’t make a huge impact on anything except for my schooling.

    But… in order to play along here is what I would do with a $40,000 increase:
    First, I would laugh so hard I would start coughing and choking while having an asthma attack. Then I would hit my head as I fell to the floor having spasms from the laughing fit.

    Financially, I would max out our retirement, invest more, fix up our house faster, and then go on two vacations a year. I would also have a business, and have goals on making more. Pretty much what I plan on doing now, but with more money. Nothing different really, except the money itself.

  15. Peter November 15, 2012 at 5:39 PM

    Travis, thanks for sharing your story, it takes a lot of guts to talk about your situation, and I know it will help people reading your story. There is hope to get out of that debt once you turn things around. Great job!

  16. Travis @DebtChronicles November 15, 2012 at 8:15 PM

    @Kris – Hey 2% is more than I got last year too. Well, that’s not quite true….we did increase our income but it’s because Vonnie and I both took on more work. You do what you gotta do, right?

    @LB – I like your plan….especially the two vacations a year – I think I’ll use that one in our plan. :)

    @Peter – I agree, but boy it sure wasn’t easy to turn things around. Even after we got on our plan and we could see our debt dropping, it took us a long time to really get our communication and budgeting skills to where they need to be. I still think we have some work to do, but we are light years from where we were!

  17. J. Money November 16, 2012 at 9:21 AM

    Thanks again my man!! I’ve always been fascinated by your story from the first time we “met” online, so glad we finally were able to share it with our community here! :) As many have already said, you guys are TOTAL rock stars and no doubt inspiring others to kick it into high gear too. Thanks so much for writing this up for us and commenting to everyone! Love that.

    @Holly@ClubThrifty – I’m waiting for that magical no-more-mortgages day too!!! I can’t even fathom it!! :)

  18. The money saver November 16, 2012 at 9:45 AM

    Whoa! There’s just a lot of things inside my head when I read this post! *wishful thinking*(whistles)..:)

  19. Holly@ClubThrifty November 16, 2012 at 10:02 AM

    Hell yes, J. Money!!!! I am counting down to the day!!!

  20. Jessica, The Debt Princess November 16, 2012 at 12:27 PM

    Travis, you and Vonnie are my heroes for so many reasons!! You are doing awesome and will be in such great shape soon. I can’t wait for the time when I’m there.

  21. Athena November 16, 2012 at 7:10 PM

    That’s amazing Travis. You and Vonnie are seriously some of my role models. Keep it up.

  22. Travis @Debtchronicles November 16, 2012 at 8:33 PM

    @J.Money The pleasure was all mine – Thank YOU so much for the opportunity to share my story with your sexy readers!

    @The Money Saver – Oh, I can imagine……there’s so many possibilities! We’ve got the “major categories,” but who knows, our situation may change by the time we’re done too!

    @Jessica Awww, thanks! You’ll get there Jessica, and Vonnie and I will be right there to celebrate with you!

  23. Travis @Debtchronicles November 17, 2012 at 4:11 PM

    @Athena Thanks, Athena…it’s hard to think of ourselves as role models. *blush* :)

  24. KMart November 18, 2012 at 10:59 AM

    Can you give more details on your debt management program?

  25. Travis @DebtChronicles November 18, 2012 at 5:02 PM

    Absolutely, KMart! I actually wrote a post on another website that talks specifically about my experience with getting started with our DMP. Here’s the link:


    Additionally, I’d like to point you to a resource guide provided by my Debt Relief Provider (CareOne Debt Relief Services) that provides some additional details on their program:


    If you want additional information on how it works, have any questions, or just want to know more about my personal experience, please do not hesitate to email me at travispizel (at) hotmail (dot) com – I’m more than happy to help in any way that I can!

  26. K.K. @ Living Debt Free Rocks! November 18, 2012 at 8:00 PM

    Just wanted to say that’s a great way to look at your soon to be over DMP payment! There is a lot you can do with that money and making sure you have a plan for it ahead of time is very smart! Next month I will become debt free and get to repatriate $2300/month (minimums + snowflakes) back into the budget…I cannot wait!

  27. Travis @DebtChronicles November 19, 2012 at 10:11 PM

    Thanks, K.K.! Wow, one more month, I bet you are super excited! I can’t to be there – I just know it will be here before I know it. congrats to you!