My Debt Journey

I want to be able to tell my own story of money handling and how I went from financial idiot to living a life without debt. I want to communicate how important it is for us to take responsibility for our own financial situations and how living life with a debt adverse mindset can help us take control. My goal in this particular post (and this blog) is to give you hope and some key points to start your path to paying off debt so you can live your life.

In the Beginning there was Debt…

Let’s start at the beginning. In high school, my dad helped me setup my Roth IRA, the start of my financial journey. My dad, though knowledgeable about the importance of investing, was unable to give me the building blocks of what makes a good investment (we have both grown in our financial knowledge over the last 15 years). When I went to college, finance was still something of a mystery to me and not something that I need to worry about until much later in life. I did not have a firm grasp on the basics of investing, how to use credit cards, how or why debt could ruin lives, or the importance of budgeting. I was still financially illiterate.

In college, I viewed credit cards and debt as a normal part of life. I could use credit cards to make large purchases that I could not afford at the time and debt was just another way of making luxury purchases. I was in the mindset that only people with rich parents ever got rich. I got a $36,000 loan in college at 0.75% interest as a ‘career starter’ loan, which certainly made me feel rich at the time. I thought that I was smart because I used my loan to purchase a used car, not a new one like many of my friends, for around $8,000. The rest of the cash was divided between a few other purchases: a new gaming computer for $2,500, a nice 5.1 surround sounds system, and funding a Roth IRA for a few years. I thought that because I used a portion of the loan to invest I was making a good decision.

When I got married, my wife brought her student loans and a car loan into the relationship. We were sitting on $71,843.41 worth of debt and my wife was uncomfortable with the amount of debt looming. Many discussions followed regarding whether or not carrying a large amount of debt was a good idea or even possible to pay off in a reasonable amount of time. In the end, I had to make one fundamental change to the way I saw the debt. Previously, I saw it as something that everyone had, a hole that others or the government were responsible for helping me fill. I had to accept the fact that the reason my wife and I had so much debt was because of our decisions. We were responsible for our debt and the amount of debt that we decided to accept. Nobody else decided to take out those loans. I took out a pointless ‘career starter’ loan for myself. My wife took out school loans so she could finish her degree and have a car. We could have gone to different schools or taken different paths but we both made our decisions and had to live with those decisions.

From -$70,000 to $0

In the end, I came around and decided that my wife was correct. I started learning more about finance, over the course of the next couple of months my financial knowledge exploded, and my financial philosophy completely changed. I realized that we could be debt free. Not only that, someday we could be wealthy. Wealth for many, if not most, Americans is a choice and I wanted to take the steps to achieve that goal. Some of the resources I used were JLCollins stock series, the Dave Ramsey podcast, Mr. Money Mustache, “The Millionaire Next Door“, “The Little Book of Common Sense to Investing“, and countless articles about finance.

Once my wife and I decided that we were going to pay off the debt, we went a little crazy. We stopped going out to eat, budgeted every expense, and tried to maximize the amount of money at the end of the month for debt repayment. We were willing to take on extra jobs, sell anything of value, or do anything else to help us get out of debt as fast as possible. It was not fun but once we did the math, we realized that we could pay off all of the debt in one year. We decided to cut our monthly expenses to nothing for one year so that we could live the rest of our lives free from debt. Anyone can do anything for a short period. You can see the different debts below as well as how we ordered our debts.

Loan Amount Interest Min Pay Interest/Mnth
$5,741.92 6.80% $97.01 $32.54
$4,223.68 6.80% $51.08 $23.93
$4,148.96 6.80% $50.18 $23.51
$2,787.38 6.80% $33.71 $15.80
$5,265.14 6.00% $61.55 $26.33
$23,801.00 2.65% $444.34 $52.56
$4,337.10 2.32% $43.14 $8.39
$2,487.82 2.32% $24.74 $4.81
$19,050.22 0.75% $620.24 $11.91

The ordering of the debts is fairly arbitrary. We decided to pay off the loans by highest interest rate first then sort the ones with 6.8% interest largest to smallest. We did this to save some on interest but it really does not matter much because we were planning to pay off the debts as fast as possible. If you truly want to pay off the debts in the most efficient way possible, you would sort by the highest interest per month (far right column) and pay off the loan with the highest monthly interest. Once the highest interest/month loan is the same as the next one then you pay off those two in the proper ratio, then you add the third, fourth, etc. until you are paying all of the loans off at the same time, still in the proper ratios. You would end up paying off all of the loans in the same month doing it that way…even if it is overly complicated. If you are familiar with Dave Ramsey, he has your order your loans off smallest to largest for the psychological win. Honestly, the order in which you pay off your loans does not matter much if you are paying them off as fast as possible. Paying them off this way cost us a couple hundred dollars.

What it Takes

We cut our expenses to nothing to meet our goal. After the first couple of months, we decided that we were going to go crazy if we did not include a fun budget item. We ended up deciding to give ourselves around $100 a month for date night. The key is to budget. We knew that we could pay off debt faster if we did not include a date night column in our budget but we made the calculated decisions for our sanity. If you are unsure how to budget or where to start I recommend using YNAB or Mint to start your budget. Both link to bank and credit card accounts to make budgeting easier. One key budget item that we cut was our food budget. We cut our eating out budget to nothing and kept our grocery bill extremely low. We cooked nearly every meal for an entire year and were able to keep our meal cost to around $2 per meal per person.

We continued to contribute a small percentage of our income to our retirement and 401k accounts. Enough to get the 401k company match. We cut our retirement savings for a short time to expedite our debt journey. I would not recommend reducing your retirement savings for more than a couple of years.

We started with a small emergency fund. Not the 3-6 month fund like we do now because we were trying to maximize those monthly payments. It also set a fire underneath us to get the debt paid off as fast as possible. The key is to maintain a small (key word being ‘small’) emergency fund for the unexpected. Our emergency fund had a few thousand dollars in a separate savings account. We actually had to use the fund a couple times for small emergency car repairs.

Over the next year, we went to town on our debt. We almost never ate out, made luxury purchases, or gave into the typical spending urges. We ended up doing a lot of hiking and game nights with friends to save money. The key was to organize more friend events so we could encourage low-cost/free events with everyone. It is much easier to stay away from high cost events if you are the one organizing the event.

We started to notice a few things around the house that we did not really use. I decided that I did not use my super nice, high-end gaming computer that I put together in college. I ended up selling it piece by piece. My wife and I went a bit crazy and sold anything and everything to speed up the process including the computer, a saxophone, a couch, and a few other items. My wife would do clothes-swaps with her friends to update her wardrobe for free and get rid of some of the clothes she no longer wore.

One thing we did that was counter intuitive was continue to tithe to our local church. This defiantly did not help us pay of debt faster but it is an important act that we were not willing to sacrifice, even for our debt journey. All of the rest of our money was used to survive or pay off debt.

When we got our tax return, paid off debt. When I got an insurance payout when hail totaled my car, paid off debt. When we got bonuses from work, paid off debt. When we got raises at work, paid off more debt. Every extra penny went to debt.


Paying off debt takes dedication and a plan. You did not accidentally fall into debt and you are not going to accidentally fall out. You are the only one who can help you. If you want to get out of debt, you must first take control of you spending, create a plan, and start budgeting the crap out of your life. You and your kids do not need fancy phones and toys. You do not need a new computer or fancy new clothes. 2-year-old phones and used clothes will suffice…for now. My wife and I decided to take control of our lives and attack our debt with a vengeance so that today we can have whatever we want without going further into debt. Since paying off the debt we have continued to live on a loose budget and have more than doubled our net worth. But you can read about that in this post if you are interested.

Below is a graph of all of our debts as they slowly disappeared.


In the end, we paid off all the debt in one year, having paid $837.63 in interest throughout the process. Had we paid the minimum payments on all of the loans it would have taken us until 2025 and we would have paid an additional $9,354.49 in interest. That is why it is important to pay off debt quickly.


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