How I Did It: I Paid Off $25,000 in Credit Card Debt in 2 Years

It’s cool that Zooey Deschanel saves for retirement and some celebs love to discount shop, but we’re less wowed by the feats of the rich and famous. We are, however, very inspired by our own readers, who have accomplished amazing financial goals on much tighter budgets, like Carla, who saved up an emergency fund of $10,000 in less than three years. Today, one reader shares how she paid off credit card debt of $25,000 in just two years.

We’ll share how Dana Burgess racked up $63,000 in credit card debt in the first place, and how she learned to enjoy life on a tighter budget.

I live in Graham, Texas with my husband and three children, who are 17, 14 and 9 years old. I work full-time at a public school as an “intervention” teacher, helping kids who need an extra push academically with reading and math.

When I first started racking up credit card debt, my husband was running two businesses, which we co-owned: a store that sold farm equipment and an auction company. The farm store wasn’t doing so well at the time, so a lot of our money was going toward that business.

I had always been responsible for running the household, so when I didn’t have the money for groceries, or for gas, I would just put it on my credit card. And then, occasionally, I would splurge on something and put that on the card as well. In three years, I racked up close to $63,000 in debt. It seems like a lot, but between paying for all the household utilities, food, phones and car payments—and taking care of three kids—it all adds up fast!

Dana’s Wake-Up Call

My husband found out about one of the credit cards (there were six), and he was very upset about the balance, obviously—he hadn’t known that I had accumulated so much debt. And that was just the tip of our debt iceberg: He didn’t even know how much was on the other cards!

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Creditors had begun calling the house as well, and that’s when I finally realized I needed to gain control over our finances and turn things around. I was so overwhelmed and stressed about it all the time, and I didn’t want to be any longer. I had gotten us into this mess, and I knew I needed to make some big changes, for the good of my family.

So, I decided to get aggressive with our finances, trying to earn more while simultaneously paying off debt and learning to live with a whole lot less.

Taking the First Steps

From my work as a teacher, I bring home about $2,900 per month. I set up automatic payments: $1,500 goes to paying off the cards with the highest interest rates, and the remainder goes to utilities, groceries and gas. My husband takes care of the mortgage payments, car insurance payments and extras for the kids like baseball-related expenses for my son, or summer camps, so I’m not responsible for those expenses.

Once I set my mind to paying down our debt, I tried to streamline every aspect of my life. I got rid of our second phone line and cut my gym membership—I just started walking more for exercise. I used to get manicures frequently, which I cut out altogether, and now I just get my hair cut once a year. We used to eat out as a family, which we no longer do, either.

RELATED: Top Mistakes to Avoid in Getting Credit Cards Paid Off

Plus, I started reading a lot of LearnVest articles, and I watched all the courses, which gave me a lot of good ideas on how to manage my money. I also signed up for email newsletters from a site called 5 Dollar Dinners, which sends coupons each day.

Baking My Way to Earning More

I also started working more outside of my job as a teacher, which allows me to contribute more money to paying off my debts. I sell Mary Kay cosmetics, and I can make between $300 and $400 for a two-hour Mary Kay party. Not bad!

Additionally, I bake cakes for events and weddings. My mother baked cakes so she could earn money while being a stay-at-home mom, and I swore up and down that I would never bake cakes. But when I needed the money, I thought, “I could do that, too!”

I sell little birthday cakes for about $25, and wedding cakes for $3 per slice. One time, I sold a wedding cake for $1,500! All of this extra money I put toward paying off my credit card debts more quickly.

Raising Kids on a Shoestring Budget

When I decided to take charge of my finances, I told my kids that things were tight, and that they would need to start saving up for the little things they wanted. I try not to make them stressed about money, so I won’t go grocery shopping if they’re with me because they’ll want things that aren’t on the list, and that doesn’t fit with the budget I need to follow.

We have them work for us when we run auctions, and we’ll pay them so they can buy new clothes or go out with friends. They also do odd jobs for their grandparents to make some extra money. I think it teaches them a lot about saving, and I hope it means they won’t ever end up in a mess like I did!

RELATED: Checklist to Get Your Credit Cards Paid Off

How I Still Manage to Enjoy Life

By the end of this month, I’ll have a little over $36,000 (of the original $63,000) left to pay off.

I’m obviously really committed to paying off this debt, and working these part-time jobs does take a lot of time. But if something good happens, like I sell an expensive cake and can pay off an extra $200 on a credit card, I’ll treat myself a little. It’s always small, like ordering lunch for $6 or stopping by the Dairy Queen. Now that I’m not used to splurging all the time, even the littlest splurges seem much more special.

And I know that when I finally pay off all of my debt, and can settle my children in at college and help them financially, I’ll just feel incredibly relieved. Just thinking about that motivates me to keep going.

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  • Brynn Wilson

    wow what a great story!! way to go dana!!!

  • twharton

    Wow…..that’s amazing!!! Keep it up Dana! :)

  • http://www.makingsenseofcents.com/ Michelle

    Wow good job!

  • jessica

    This is a great story!  So inspiring.  However, in many states it’s illegal to sell baked goods from your home (it needs to be certified by a state health inspector). Just a note of caution to those readers who are thinking baking might bring in some cash.  Make sure you check with local/state legal guidelines before selling anything you bake in your kitchen! :)

    • Laurie

      If no one says anything, then don’t worry about it.  I also run a cake operation in my house and sell only to family and friends with the strict hush hush rule.  Cash only and I don’t let anyone know outside of our close knit circle.  I feel that if I can get away with little things like not having to pay taxes on the extra $15,000 I make a year from that, it kind of makes up for all the weasles (illegals) who are stealing from me and getting away with it constantly.  I don’t have to be honest with our government anymore.  They aren’t honest with us and as long as I’m honest with my friends and family, that’s all that counts.  And yes, I can sleep VERY well at night!

      • Azraph

         >makes up for all the weasles (illegals) who are stealing from me nd getting away with it constantly

        Are you trying to say that illegal immigrants are constantly stealing from you?

      • Rei

         Not only do you recommend bypassing food safety laws, but also cheating on taxes? And to top it off, you justify it by blaming your problems on immigrants? Disgusting.

        • Laura

          …and three people liked it!  Good lord…

      • ChiSoxGal

        and if anyone at the IRS ever reads this and subpoenas the records from this website, you’re going to jail for tax fraud.  not to mention what you may be lying about on your “regular” taxes.  

  • Kate Rees

    I’m really impressed that you’re working so hard and successfully paying off those credit card bills. That’s awesome!

    What gets me about this story are the statements, “my husband found out about one of the credit cards (there were six), and he was very upset about the balance, obviously” & “my husband takes care of the mortgage payments, car insurance payments
    and extras for the kids like baseball-related expenses for my son, or
    summer camps, so I’m not responsible for those expenses.”

    I’m a big proponent of discussing the shared expenses that it takes to raise a family and keep a home. A second set eyes on the budget may have avoided the debt in the first place. Are you working together on looking at ways to bring down shared expenses? And maybe this doesn’t apply to your situation, but it’s a good thought for baby families that are just starting to share expenses.

  • anne

    i also did it!  i paid off $28K and saved $11k in three years. I’m single so i gave away 75% of my things and moved into a house where i rented 2 room; i cut my expenses by $900/month.  i know it sounds crazy but it was the most creative thing i had ever done… and now i’m back in my own apartment and still saving.

    • Kmacdoula

       Congrats Anne…It’s amazing what you can do when you have a plan and stick to it…You Go Girl!

      • anne

         back ‘atcha!  ……now on to retirement saving :)

        • Anonymous

          Hi Anne,

          We’d love to talk to you about how you accomplished these goals! We’re sure others would be inspired by how you did it. Please email confess@learnvest.com if you’d be interested in talking to us about your story! Hope to hear from you soon!

  • Jrichmond

    We are in the same process,  We own 30 acres and see articles all the time about people making a living and raising a family on smaller amounts of property.  Learning to use the talents and resources you have can make a big difference in your life.  I was very open with the older children about what would be happening and my younger son which is to young to know what is happening just accepts the changes as part of life.  The experience has taught the older children about money management and has made us more cooperative as a family.

  • talia

    Great story! So inspiring. Well done, Dana! 

  • Kmacdoula

    We paid off over $30,000 in about 18 months…It takes A LOT of discipline and diligence, but it can be done. We paid off one Credit Card, and once that one was done we applied the money from that one to the next one and so on… 

  • Jillheinz

    Dana, what an AWESOME accomplishment!!!!  My husband and I don’t have the debt but often talk about how little we actually save in comparison to what we make.  There’s no excuse for us not to cut back and save more.  Your story inspired me!  If you can do it so can I!!

  • Azraph

    Okay, now tell me how to pay off my $43,000 of student loans on a $33,000 salary without relying on a husband, pyramid schemes (Mary Kay), or illegally selling cakes out of my un-certified kitchen.

    • Jason

      1) Have you done a written 2 month spending history?  
      2) Do you have a written spending plan?  
      3) Have you written down a list of your values?
      4) Have you written down a list of your goals?

      This woman found a way to live below her means by both reducing her expenditures and increasing her income.  You might have to come up with some creative solutions on both sides, but you can’t do that until you know what’s important, what you want (in a range of timeframes) , how you’re currently using your resources, and how you can allocate those resources to meet your goals.

    • Jason

      1) Have you done a written 2 month spending history?  
      2) Do you have a written spending plan?  
      3) Have you written down a list of your values?
      4) Have you written down a list of your goals?

      This woman found a way to live below her means by both reducing her expenditures and increasing her income.  You might have to come up with some creative solutions on both sides, but you can’t do that until you know what’s important, what you want (in a range of timeframes) , how you’re currently using your resources, and how you can allocate those resources to meet your goals.

    • http://www.facebook.com/profile.php?id=37400470 Christina Moody Loveless

      you could always sell other things you make. you don’t need to certify knitting needles as far as i kno

    • Firma

      Don’t despair. It can be done, but it requires discipline and focus. I paid off about $55K in about 5-6 years. (That includes 3K to go to NY last year). I only went on the NY trip because I knew I could still be debt free by the end of ’11. I found a book for about 50 cents called How to Get Out of Debt. I read it and set up a plan. Basically you pay off the highest interest rate debt first. When you pay off one, you then take that amount and put it toward the next debt and so on until you’re done. My biggest sacrifice was renting a room for $400/mo. instead of paying about $800 or $900 for an apt. I also didn’t take any vacations outside my immediate area. Only ate out a few times a year. I rented the room for four years. After that, I got married and we rented a one-bed for $800 so my rent stayed the same. Meanwhile, my income kept going up. If I hadn’t gotten married, I would have continued living in smaller quarters until the debt was gone or almost gone.

      • Mara

        Congrats to you!!!  Awesome story.  Glad to hear it can be done!  

    • anthonysmom

      Read “Total Money Makeover” by Dave Ramsey.  He’ll walk you through the Baby Steps, including a Baby Emergency Fund of $1000, then starting your Debt Snowball starting with working on paying off the smallest balance to the largest balance.  We followed his steps starting in Jan, 2007 and w/in 4 years, we’d paid off $122K in debt!!  And you’re very smart to avoid the trap of MK or any other pyramid scheme!  You might consider getting a 2nd job waiting tables, delivering pizza, freelancing (if you have the skills), cleaning houses, walking dogs, working retail, etc.!

      • twharton

        I am very aware of the Dave Ramsey process. And it is a good one I admit. But to say, and I quote you, “And you’re very smart to avoid the trap of MK or any other pyramid scheme!”, you have no idea what you are speaking of. Have you sold MK, have you worked for MK? It is a strong God based company with awesome products. MK isn’t a “get rich scheme”. It is a business to make women Independent. Whether that independence be financially or spiritually. It isn’t all about the $$$$ in the eyes! You my friend don’t need to bash something you have never been a part of or truly have an inside track to.

        • anthonysmom

          Actually, yes I sold MK for over 3 years – 2003 – 2006 and it is very much touted as a “get rich scheme.”  Do they not brag about the number of “MK Millionaires”?  Do they not parade all the NSD’s across the stage and talk, talk, talk about all their success, their homes, their cars? The market is completely saturated with the nearly 1 million consultants nationwide that are churned through at a mind-boggling pace.  Consultants who end up with thousands in product on their shelves b/c they’re taught “you can’t sell from an empty wagon!”  MK helped me get into $25K of debt b/c I was always encouraged to buy more inventory, not to mention, products are constantly being changed!  One cannot be “independent” in MK b/c you are placed under all their advertising restrictions, archaic dress code and prisoner to their ever-changing product line.  Visit http://www.pinktruth.com to read stories from everyone from consultants to almost-NSD’s if you’d like more info.

        • anthonysmom

          “You my friend don’t need to bash something you have never been a part of or truly have an inside track to.”  I’ll also add – don’t assume what someone has or has not done.  I try to only speak to things that I have experience with or full knowledge of – you might try the same.

        • Mara

          Even if those ways to make money don’t appeal to you, the lesson remains the same.  If you’re not making enough money, find a way to earn more!  Even if  it’s not possible to earn more in one’s career, there is always the option of working part time on your own venture.  A person just has to be motivated and perhaps creative in order to find a solution. 

    • Amyjo

      In Texas, you can sell baked goods out of your kitchen, it’s not illegal. Look up pyramid scheme and then look up Mary Kay’s business platform….

  • LP

    What I took away from this: Why didn’t she consult her husband about finances originally?! Why was she wracking up debt and not saying a word about it to her partner? A marriage is supposed to be a team!

    • suzannw

      obviously because she was embarrassed and ashamed.  

      • twharton

        There are many couples who “split” the expenses. I happen not to be one of them, but I have many friends who do excatly what Dana and her husband do. He takes care of certain bills and she does the same. His credit cards and bills are his and hers are hers. That’s how society is becoming more and more. They are keeping their money separate. I don’t think she was embarassed or ashamed, I think it is just the way they handle their expenses. I wouldn;t come into your house and tell you how to run things!

  • Anonymous

    She was ashamed.  She had to dig herself out of this hole by herself.

  • Dacubsfan

    Great story, very inspiring. However it is problematic that her husband not only didn’t know about the debt, but didn’t take part in any of the financial decisions along the way. His ignorance equally contributed to their debt. It’s also problematic that she describes this debt as “hers”, and her responsibility to pay it down. Frankly, when you are married it’s both partners responsibility. Even though they are splitting up expenses and paying down the debt together in a way, her language denotes she still maybe feels solely responsible. And actually it doesn’t seem that the husband is taking any measures of his own: like honestly assessing if this business is financially successful enough to provide for their family. Perhaps another reason they got into debt in the first place.

    • anthonysmom

      I wholeheartedly agree and was thinking the same things as I read her story. I have a friend who has been in the same boat, she had racked up a bunch of debt, husband didn’t know, then husband found out that THEY had nearly $100K in credit card debt (he didn’t charge the money, but he would be just as responsible for the debt). Instead of working together to find a solution, they took out 401k loans & refi’d their house to “pay it off.”  Guess what happened 5 years later?  Wife racked up over $50K in debt, husband found out, they refi’d their house again and took out new 401k loans to “pay it off.”  They still haven’t changed their habits, but more importantly, they haven’t learn to communicate about money AND to work together!!  Sounds like the couple in the story need to merge their money and start having budget meetings together so both partners know what’s going on!!  And I htink the kids could handle being aware of the family finances to a certain extent, otherwise, they won’t learn how to handle money properly.

    • maesaysdoit

      It’s hard to make decisions when your partner doesn’t tell you what they are doing. It is possible for a wife get many credit cards with out her husband ever knowing. One cannot get help until they ask for it. If I were her husband this happened I would expect her to get herself out of it or else she will just go right back and do it again. She is doing well, and feeling the sting of her own decisions. I bet she never lets it happen again. 

  • http://pulse.yahoo.com/_YC4JDU3EHQERKREP7DHPZGC47M Dana

    She lost me when she said that nearly half her income was available to pay down the debt.

  • maesaysdoit

    maybe he didn’t know about the debt because she wasn’t being completely honest about it — not every marriage shares pay and debt — I know many couples that have completely separate money who decide ahead that each ones expenses are their own

  • Luke Powell

    Would love to speak with anyone else about Debt Consolidation through Prosper.com

    • Firma

      I found it cheaper not to consolidate debt, but rather pay off the highest interest rate debt first and so on down the line. But I had low interest credit cards, and very low interest student loans. Before you consolidate, do the math and figure out if it’s really cheaper. It simply depends on what interest rates you are paying now versus what the consolidation offer is.

    • Meghan

      I’m actually not a fan of prosper but lendingclub has been awesome for me

  • Naturalgirl20022002

    There are some really mean comments on here. Lots of people have debt issues in marriage and that is why alot of marriages end. This woman has taken some serious steps to take care of her debt and should be commended. There are also people who do yardsales and other side jobs out of their homes. Goodluck to the family for continued success.

  • Thegallons

    I can understand how this happened. Just about the same thing happened to me, only I don’t have credit cards, I borrowed money from colleagues and friends and did not tell my husband. One of my “friends” called my husband and told him many of his former colleagues saw me gambling on the casinos and all sorts of other details. She wanted to come by our house and “save my job” by doing an intervention. When I told her it wasn’t necessary, she started raising her voice and told me not to get an attitude with her. My husband knows what I did, and I told her I did not need an intervention. As my husband and I continue to work together on the bills for our home, I am making it a point to keep him informed.

  • MissV in NYC

    While it is commendable that she dug herself out of debt, this story saddens me. It harkens back to when women would go shopping and hide the shopping bags from their husbands. Being open and honest with your partner about money seems like a no-brainer, especially these days when money is a top problem in marriages.

  • Oneputt_is

    Agree with Naturalgirl…congratulations to the family for making these sacrifices and for seeing the light at the end of the tunnel. Having a mound of debt myself that i’m trying to plow through, this is incredibly inspiring.