‘I Paid Off $40K of Debt In 2 Years. Here’s How’


aerial view of man working on laptop with a cup of coffeeWhen my wife and I were married in 2009, I couldn’t resist spoiling my bride.

We were in our early 20s, and I wanted to make sure she had the fairytale wedding she had dreamed of … and once we were married, that fairytale life.

Onto my cards went our engagement party, our wedding and our subsequent international trips to places like Canada and Japan. Being so young, it was a point of pride that we wouldn’t take handouts from our parents, and it never occurred to us to talk about money beyond handing over the credit cards (well, my credit card). Having a balance just started to feel normal. After all, paying off the minimum $50 per month was much more attractive than looking at our ever-growing mountain of debt.

About a year after our wedding, we realized that we were starting to reach the limits on my cards. We didn’t have much left in savings, and we got the feeling that we may have been in over our heads. Our money had always been kept separate, but when we came face-to-face with the $40,000 of debt we had racked up together, things started getting tense. My wife would get anxious and wish I hadn’t treated her to trips abroad and expensive dinners, and I would get defensive about my choices.

Our tipping point came in 2011, when we decided we wanted to start a family. We realized that as parents, it would be irresponsible for us to bring our child into the world unless we could get ourselves together—so we decided to eradicate that debt once and for all.

RELATED: Which Debts to Pay Off First?

A little over two years later, we’re expectant parents without a cent of credit card debt and a positive net worth. Here, I’m sharing five of the strategies that made all the difference.

1. Set Your Finish Line Before You Start

Your eyes may glaze over, but setting clear goals was truly one of the key reasons we made it through in tackling our debt. Our goals included:

  • 50% reduction of our credit debt within one year, 100% reduction within two
  • Increase our income (which was about $80,000 at the time—twice the amount of our debt) to support the above
  • Have our child born with no credit debt

When we started tackling our debt, we felt like we weren’t making any progress—we would make payments, but the interest would keep pushing our bills higher. We had to get serious if we were going to battle the interest and pay the principle. So I listed out all of our liabilities, savings and recurring spending on a simple spreadsheet. Just having this list opened my eyes and showed me where we needed to make some major changes in our spending—like cutting back on extravagant date nights when that money could be better used elsewhere.

While reducing our spending, we also focused on our careers. I started devoting my free time to reading articles, listening to audiobooks and watching videos that would teach me the skills I needed for the senior sales management role I set my eye on, and after a few years of diligence I was able to move from sales support into account management and then into a senior management position. My wife, too, was continually promoted within her company, from general administration into finance and accounting. Together, we eventually increased our income by 150%—and then resisted the temptation to spend more.

RELATED: 3 Ways to Make More Money Using Your Existing Skills

In the beginning, it was slow going. But as we started having more money to put towards our debt and changing our daily habits, we saw the balance on our bills level out … and then slowly start to decline. We used that momentum to pay off entire cards, which was a huge encouragement to keep going.

2. Get Disciplined Across the Board

Around the time we decided to start tackling our debt, I realized that my wife was very disciplined and diligent in all aspects of her life—everything from her working hard at her job to meticulously wrapping presents.

I … wasn’t. I was generally happy using high-level figures instead of breaking down costs to the dollar, doing things ‘just enough to get done’ instead of doing them thoroughly and, suffice it to say, you don’t want to receive a present wrapped by me. Inspired by my wife’s discipline, I started thinking that I too should start being “all or nothing,” letting the discipline I instituted in my life carry over to my money.

RELATED: Sunday Habits That Jump-Start Job Success All Week Long

I started getting up earlier than usual in the morning (sometimes at 5:30 a.m.!) and scheduling my weeknights on the Sunday before: when I’d have dinner, when I’d watch TV, when I would have personal time and when I would go to bed. In my experience, if you can keep a simple sleep schedule, you’re probably one step closer to sticking to other schedules and budgets.

I also practiced staying up and focusing on work or study at night, simply to stretch my mind and test my discipline. I found it was most effective to choose one place to associate with focusing (mine was our study), and do it in short bursts—only an hour and a half at a time.

Due to my strict schedule and focusing time, I opened up an extra two to three hours a day that I used to work on my budgets, do extra reading, listen to audiobooks, plan my sales activity for the workweek and even pursue entrepreneurial projects like writing business plans and starting a personal site based on my passion for sales.

  • Dina

    This article really doesn’t say much, and certainly doesn’t go into detail about how you actually paid this off — so you got a promotion. Nice for you, but tells the rest of us nothing.

    • Someone

      I agree with you Let’s get some actual specifics on WHAT was done in order to combat the debt. Certainly getting promotions would automatically help.

      • Taz

        He said he did balance transfers and called his phone company to lower his bill, stop buying coffee everyday, etc….

      • Mr Nuff Said

        The author summed it up by saying they increased their income by 150% while NOT changing their lowered spending habits. Everyone’s habits differ but the principle is the same.

        • http://www.Leigh-Fletcher.com/ Leigh Fletcher

          Perfect summary – and yes the promotion part was purely to show you can still thrive in life / work and not be emotionally crippled by debt. It certainly was only toward the very end of us already making our way out of debt.

      • http://www.Leigh-Fletcher.com/ Leigh Fletcher

        Thanks for the comment – let me know if the above helps. Important to note – is that we were already almost out of debt before we got our promotions.

        Actually, I only left the promotions part in to show that debt doesn’t have to emotionally cripple you – you can still be strong and keep moving on – this was hard at first!

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      Hi Dina – thanks for taking the time to comment.
      Admittedly there was a fair bit of content, but the main ‘nuggets’ around how we did this were:

      1. knowing where we stood, and what money we had left to redirect to cards regularly, 2. knowing where our expenses were, so we could get rid of them or reduce them (like insurance discounts etc), 3. Being more disciplined about spending while out, and directing to the cards, 4. Doing balance transfers to minimize interest – and then paying more off 5. Closing cards as we paid them, and snowballing to others.

      Hopefully this helps me be more concise although let me know if you’d like more information!

  • Jman

    I notice the person in this example is making 80k/year also well over what normal middle class individuals make and are trying to get out of debt.

    • Taz

      80 k for 2 people-not just him. If you need a single perspective, read a single perspective. There are many other stories about single people.

    • Mr Nuff Said

      Depends. What if they’re in the NY/Metro region or San Francisco? When you factor that in, it may be very relative to a family making 50k somewhere else.

      • http://www.Leigh-Fletcher.com/ Leigh Fletcher

        Thanks @mrnuffsaid:disqus – good point. We were living in Sydney – so I am thinking it probably rates fairly high in terms of cost of living – but at least this helps people’s context when reading.

        • Bianca Lowe

          Damn 80k in Sydney, you did very well to pay off that debt!
          Also I found there were lots of helpful examples here that I plan on copying, so thank you :)

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      Thanks Jman – as a few people picked up below, the $80k was combined between my wife and I. We were Sydney based so this is probably up there in terms of ‘cost to live’ around the world if that helps.

  • Bernice Chu

    I think what it does show is how your perseverance paid off. It takes a lot of discipline to stay on top of the best rates and offers that are not readily offered – especially when you are an existing client. Especially at your young age, you should be congratulated for your efforts!

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      Thanks Bernice for taking time to pass on the kind words – it helps show its achievable at all ages!

  • Ann

    He indicates that the household income was 80k/year, which for a dual-income household is certainly normal middle class. I’m curious about the 150% increase though. So did you manage to go from 80k to 200k annual household income in just a couple of years? Maybe you meant a 50% increase?

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      Hi Ann – that’s a great pick up and question.

      Actually, the only reason why I mention the pay rise, was to show that even while in debt – we shouldn’t go back into our shell.

      We can still manage to thrive emotionally, and push harder to move forward in life.

      I actually did mean a 150% increase – but:

      1. This strictly only happened near the end when we had already almost paid everything off (this is important as I know that pay rise isn’t widespread)

      2. After seeing your comment, I’ve put thought to another small article on how this happened – will let you know if it gets approved :)

  • Melanie

    As a member of a family of three living on less than $40k a year with over $50K of student loan debt, I certainly feel like this article has little to offer me. Or, at least, I’m not surprised in the least that this couple could pay off their debt in two years making what they do without any children (though I do find it surprising they would have to increase their income to do it). I also find the notion that washing dishes will help motivate me to pay off my debt a bit absurd, and a little demeaning. Perhaps it is a feat for this gentleman to get the dishes done, but as a parent with no dishwasher, spending actual hours of my day washing the dishes is simply a fact of life. It’s also a rather discouraging metaphor for getting out of debt, as dishes never, ever end.

    • Taz

      He mentioned the dishwashing as something he didn’t want to do so he scheduled it just like you need to schedule financial checkups. Are you offended that he scheduled brushing his teeth too?

    • Mr Nuff Said

      Where are you from? I imagine somewhere in the midwest and not somewhere on the coats – where a family of 3 on 40k would be next to impossible unless you live with relatives.

    • Arana

      Dave Ramsey.. Is what yu need to read, hate his Republican comments but his plan is pretty straight forward.

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      Hi Melanie – thanks for taking time to comment.

      First and foremost – I certainly have the utmost respect for you, I am learning that life becomes different with our first child!

      The intention of my dish washing comment – was to find something you normally put off, and get yourself to do it. I found this ‘trained my brain’, so I had more control to make myself NOT do things (like buy something ad hoc) and save money.

      It sounds like washing dishes is a bad example for you – and in fact, if that whole part of the article doesn’t work for you – then I am happy to get the feedback and for you to ignore it.

      If you could find even one single thing in the article that helps, that’s great. If not – I hope others can help and the very best of luck!

  • krysh

    Great article – not a whiny b*tch session like some others have been, but provides tips that are helpful no matter your income. I do think LearnVest should invite a few $20,000s and $30,000s income-earning individuals to share their stories. On that note, how do you find these people to interview? Do you consider publishing articles from your readers? Yes, I like reading about “real” people, but I’d be more inspired to see people from all over the country overcoming “real” hardships on lower incomes.

    • Someone

      I can certainly agree with that (taking lower income individuals and how they made it out of debt). $80K is nice but for some it’s a pipedream at this time.

    • Mr Nuff Said

      I think Learnvest should simply tell the people that submit information to include their general location. Nothing specific, but 30k in Texas is different than 30k in NYC.

      • tokenadult

        But I don’t think Learnvest thinks of people making 30K as their “audience” as we are unlikely to buy their plans:-)
        (Spoken by a single person making 30k in a large urban area and still saving 20 percent.)
        I would love to hear about this demographic as well, and I DO NOT want to hear how they did it by moving back with their parents.

        • papilon

          When people say $80K, $100K, or $120K isn’t much for a big city, I always wonder about the cashiers, retail salespeople, waiters, etc. who live there. They certainly can’t be making that kind of income, so how do they survive?

          The fact that you are manage to save 20% even while in an area with a HCOL is impressive and I bet if you wrote an article it would be quite inspirational.

          • April

            They either live farther out and commute or live in affordable housing that a lot of larger cities offer. A family of 3 could make $77,000 and still qualify for affordable housing in a county outside of Washington, DC. Granted it’s hard to get affordable housing due to high demand but it does exist and there is a lot of it.

        • Mr Nuff Said

          I suggest submitting an article with ALL of your details. Where you live, how much, assistance provided (if any from like parents, friends, etc)

      • http://www.Leigh-Fletcher.com/ Leigh Fletcher

        Hi @mrnuffsaid:disqus – that sounds like a good idea to provide clarity.

        FYI for me, we were living in Sydney which has a fairly high cost of living, no help from parents or friends. Living in an apartment with a mortgage etc.

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      Hi Krysh, great comments. Appreciate it. Actually, I am simply a reader who was inspired to write. They have a section to submit articles through a pitch. I definitely appreciate my story getting here to you.

  • JJ

    Actually I found this article worthwhile although not sure the realism of increasing your income by 150%. My husband and I make a combined $88K and we don’t really have “bad” debt but we basically live paycheck to paycheck and it’s very demoralizing. Our only debt is student loans, mortgage and a cheap car payment (no fancy car here!) yet I know we’re hoping to have kids soon and I’m worried about how we’re going to afford daycare costs, etc.

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      Thanks @disqus_lKgk7bZyYa:disqus! Great to hear you are a few steps better than we were – but we share your sentiments.

      Hopefully there’s just a few things in here that help.

      Importantly – the 150% reference was purely to show that debt doesn’t have to cripple you – and you can still find ways emotionally to strive forward at work.

      We were already at the tail end of debt at this stage, and it wasn’t a key part. The key was the other steps we took :)

      The best of luck!

  • Alex

    I enjoyed the article, I think people want quick fixes or want to hear what feels good when paying off debt is a steady race that requires sacrifice/discipline. The best way to really implement change is with fundamental transformations like the author noted; having an end goal, and discipline. I’ve personally experienced how being disciplined in one area spills over into the next. If our daily life is well managed, usually money follows suit. Also, the only two ways really to pay off debt are either spend less or increase your income so I see no reason to question the author or think he didn’t offer anything valuable. His starting income is irrelevant also, it’s about principle. You can bring home 80k or 100k and spend more than that which basically means you’re poor or you’re living poorly. I’ve personally seen people with well paying jobs complain about being broke.

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      You hit it on the head! Great summary and insights. Thanks for the comment.

      I definitely have known people in my life earning $300k+ who were still spending everything and not happy!

  • Mr Nuff Said

    For future reference, adding in a general location would be very helpful. People don’t realize how far 80k goes for a family in the NY/Metro region vs somewhere in the midwest.

  • stephanie

    I appreciate this story. While $80K for my husband and I is not realistic at this moment (and we do live in the SF Bay Area), it is not an outrageous combined income. I’d love to see stories of people (single or couples/families) living on less. However, the author provides a few basic tips that helped HIM and can be applied to a lot of situations regardless of the actual figures. I think most of us know what steps we need to take to get out of doubt/start saving etc. (and if we don’t, there are more concrete how-to’s available on this site), but it is nice to see a variety of approaches and success stories to motivate us to keep going, which is what “money mic” is supposed to be.

  • Aisha

    I think these are really good strategies to put into practice while most of the articles on this subject keep it general and say the same things over and over. Thank you very much for sharing!

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      My pleasure Aisha!

  • Katheryn

    I think that while this article wasn’t quite specific on how the debt was being payed down, I liked that having debt encouraged them to improve themselves in all aspects of their lives. I feel like the author grew up fast from that experience and he will never let debt get him again!

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      You have got that right Katheryn! :)

      Particularly keeping disciplined once some of the pressure is off – as it can always come back.

  • Nate

    I found this article very helpful and inciteful. I practice the art of finding encouragement in the small victories, but hadn’t really thought about applying this to doing the dishes; I can see how this might create motivation in pursuing larger goals.

    For those who don’t think it is possible in their situation my wife and I started with a little over 90k in debt, and let’s just face it, all debt is bad debt. We had a combined income of about 45k until our first child was born and our income dropped to about 32k and we managed to pay the remaining 50k of debt off in a little over two years. This was partially done through scaling back our lifestyle, driving towards the small victories (meaning we started with the lowest balances first), and working with our creditors.

    It is absolutely possible for anyone in any situation to get out of debt, it all just depends on your willingness to make the necessary sacrifices.

    • papillon

      You paid off $50K in 2 years out of annual income of $32K? That leaves less than $600/month to pay for housing, food, transportation and everything else.

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      Incredibly @disqus_2m7kkD9myu:disqus! Now you’ve re-counter-inspired me!

      Well done, and great reinforcement to others.

  • tina

    Yes if we both we able to continue to stay at our same jobs and get promoted and not spend more. Then we too could pay off 40k in two years time. Learnvest you need more realistic articles, less fluff.

    • http://www.Leigh-Fletcher.com/ Leigh Fletcher

      Hi Tina,

      Appreciate the comment.

      The only important thing I’ll say is that we actually didn’t get promoted until very late after we’d paid most of it off.

      Also, if we hadn’t become disciplined, our debt may have gone from $40k – who knows what.

      At some point we would have been over our head – possibly regardless of how much we ever earned.

      So for me – some of these steps were critical and hopefully just one thing was useful for you.

      If not, I’ll have to find a way to give you back the time wasted :)

      But I do appreciate you taking the time to read it. Any more questions for me, just shoot!

  • michwake

    I’ve been in the same boat but as a single mom (my son is 14 and my ex doesn’t help me). I went from making $60k in 2011 to around $40k. So my $40k debt is equal to my income. However, I have a plan and a tight budget to help get me out in 2.5 years. I’ve been making progress despite a few setbacks. I do have emergency savings from when things were better and I try to not touch that. I inherited a house from my Grandma so I no longer have a mortgage (but still have $3800 in taxes and insurance annually). My boyfriend moved in and gives me $500 towards bills ($6000/year) and helps fix things like my car and the house as needed. So I bring home about $32k (after 401k contribution, medical, taxes, FSA) + $6000 from the boyfriend and save by having him fix things and the inherited house. We have other friends who want out of debt too so dinners at each other’s places are common for us so we are not missing out on the social aspect of eating out.
    So congrats Leigh on getting there in 2 years. I know how tough it is. A lot of my debt is from when I was married and I kept ignoring it too. Seems like $40k is a big wake up call. I loved my old house (location and layout) but it made sense to sell it and move into the paid off one. They were close to the same size and in the same city (Metro Detroit area). My son will be off to college in 4 years so I want to be completely debt free by then. Thanks for the article because it is inspiration that I can do it too.

  • Mark

    Purchase Dave Ramsey’s book The Total Money Makeover it will explain in detail how to become debt free I live by this book daily, I’m debt freeeeee.

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  • Brittany Taylor

    Inspiring article – great to know there are people out there that are facing the same challenges I am and overcoming them!

    I’ve anaylzed all of my bills to the nth degree and while it’s helped some, it hasn’t been as great a relief as I’d hoped for. BUT – I just found out I got the job I’ve been dreaming about so the money I’m saving coupled with my increased income should have a more substantial impact on my debt.

    Here’s to financial freedom! Good luck everyone!

  • Julie Harless

    As a single woman, about 2 1/2 years ago, I found myself with 40k in debt. It was terrifying. I cried myself to sleep at night. My minimums were about $800 a month and the balances were not going down.

    The actions I took-

    1.) I got rid of my car.
    2.) Moved to a cheaper apartment.
    3.) I did the math. Added all balances up to the penny and faced the truth.
    4.) I got a second job.
    5.) I decided to call a variety of credit counseling agencies and law firms to get advice. I decided to go on a credit counseling program. It required that my credit cards be cancelled. The key here was not to pay for anything with credit. They also negotiated my interest rates down to 3-6% in some cases. My highest is 10%. My payment to them has been $800 and they pay my creditors.
    6.) Also, I limit myself to tall drip coffee at Starbucks (saving $1-2 a pop). I now shop sales and use coupons when I need something. Or wait to makes purchases.

    Now, it is more than halfway paid off. I’m already feeling I can breath a little easier. I’m starting to dream about vacations I’ll be able to pay for wish cash.

    I am not going to lie – this has been really hard. It still is. But when I do the numbers every month, it is a little victory for me. I am so happy I decided to takes these steps.

    Julie H.