How I paid off over $12k in debt in 10 months

Have you ever just woken up one day and realized that something needed to change?

I know I have mentioned before in previous posts about my struggles with debt in the past, but I never really dove into how I actually did it, other than to mention Dave Ramsey.

Shortly after I started dating my husband, I knew we were going to get married, and that got me thinking about my financial situation. I was in debt, and I did NOT want to bring that to our marriage or saddle my husband with debt that was all my fault.

See, my husband has NEVER had any debt, other than a car payment for a few months. (He had the entire loan balance ready to go in the bank, but wanted to built his credit.) He has always been incredibly good with money, and especially saving it.

And I was not. At all.

So, one day I decided I was going to change, bought Dave Ramsey’s book, got myself on track, and didn’t look back. I paid off $12,000 of credit card and auto debt in 10 months, making less than $32,000 a year in San Diego, one of the highest cost of living areas.

Here’s how I did it:

how to pay off debt

Be Ready to Change

This is the first step in preparing to pay off debt, because it is a doosey when you really sit and think about what paying off debt will mean. No more random meals out. No more using your credit card. No more spending money freely and without checking your budget. Everything has to change if you want this to happen. You will not be able to keep doing what you’ve done and get the same results. It will be very, VERY hard, but you can do it! Honestly, once you get going, the progress you make is addicting and it really does beat spending money. You just end up not wanting to hurt your “debt snowball” money.

Read The Total Money Makeover

This is the next most important step. You MUST read The Total Money Makeover by Dave Ramsey. If possible, also sign up on www.mytotalmoneymakeover.com (MTMM). I know, it sounds really weird to tell you to spend some money right when I’m telling you to pay off debt, but these tools are very cheap and for me, they were instrumental and invaluable to my success. Dave’s book lays out the foundation for your plan to debt freedom, step by step. He gives concrete, tangible advice.

Create Your First Budget. Now.

It doesn’t matter what tool you use, but you absolutely MUST create a budget immediately, if you want to make any progress at all. I used Dave’s budgeting tool on MTMM, but many Dave lovers use You Need a Budget or Mint as well. My husband uses a Google Sheet he created. Whatever way you do it, just do it! Give every dollar a name that is, figure out your monthly income, what you spend your money on, and allocate that many dollars to a category.

For example, I had categories for things like rent, groceries, toiletries, cell phone bill, utilities, and my minimum debt payments. I also gave myself a small amount of what Dave calls “blow” money, which is basically money you can spend unquestioned. The rationale is that things will come up each month you can’t foresee, plus everyone needs a little fun, even in debt payment mode. Its unrealistic to think otherwise. For that category, I gave myself $25 per month. I was single at the time, so that was plenty. Married folks and people with kids may need to adjust.

Once I had my categories with monies allocated, I took stock of what was leftover from my paycheck, and the ENTIRE AMOUNT went to debt repayment. That was the fun part!

Get Familiar With The Debt Snowball

Dave has a term called the debt snowball. The idea is that you pay off your smallest balance debt first, not your highest APR. Although that may be the financially correct method, the debt snowball relies on momentum and quick wins.

You can read more in Dave’s own words HERE.

I know the math says to pay off the debt with the highest APR, but I have to tell you-the mental boost I got when I paid off that first small debt was INCREDIBLE. I was so motivated to pay every single bit of money to my debt. Plus, once I paid off the smallest, I then freed up that monthly payment to go towards the next largest debt. The snowball method works!

Do Whatever It Takes

Another fun part of the snowball method, especially if you hang around the TMMO forums, is the monthly challenges to “find” extra money to throw at your debt repayment. This is another part of why the forums were so good for me to be a part of during this time. You will be challenged to find all kinds of money to pay off your debt, and it really ads up!

Have a yard sale, sell things on Craigslist or Ebay, or even hold a bake sale or work a second job for a short time. You can also tighten up your budget by cutting cable (this is a habit that has lasted for me….I haven’t had cable in years! Netflix does the trick!) and especially try lowering your cell phone and internet bills. Call your utilities and ask about specials for lowering your plans. I called and simply asked for a lower price for my internet, and they gave me $10 off a month just for asking. It doesn’t sound like a lot, but when you make these kinds of small changes  over many different categories, its easy to send an extra few hundred dollars to you debt each month!

Stop Using Your Credit Cards!

One of the very hardest things for me to do while paying off my debts was to use cash for everything. Not even a debit card. Dave suggests that it is mentally much harder to part with physical cash when paying for something than it is to just swipe your card-and he’s absolutely right. When I really got serious about paying off my debt, I switched everything over to cash payments (except online utility payments) and it worked so much better for me. When the cash was gone, it was gone, and there was nothing I could do about it but wait until next month.

Its a fantastic lesson even for those with no or minimum debt. Try going to cash only for a month and see what a difference it makes in your spending!

Now that I am married, I have gone back to using credit and debit cards, but have none of my own. I am just secondary on my husband’s accounts, because he manages our budget now.

Get In Touch With Your Inner Budgeting Nerd

As I mentioned above, my husband does out budgeting now. Dave says that there are usually two kinds of people in a relationship, money wise-the free spirits and the nerds. I am most certainly a free spirit when it comes to money. I don’t feel the need to check my spending, make a budget, or anything like that. Its not that I don’t think they are great and necessary things, its just not my nature to be so detailed about it. This is what got me into trouble in the first place.

When you are paying off debt, you need to get in touch with your budget nerd side. And when you’re in the thick of it, you really will! I checked my budget multiple times a day, made spreadsheets projecting when I’d pay off each debt, and was constantly on the search for extra money to throw at my debt. It was really fun at the time, and I embraced it.

Then, after I got married, my husband and I combined our budgets, and I let him take it from there, because he is the budgeting nerd. He loves digging deep into our finances and has all kinds of projections for where we need to be to meet our financial goals. He likes checking in and doing the budget, and I am happy to have him do it, because its just not in my nature to do so.

We have “budget meetings” twice a month, where we go over our spending to make sure we are staying on track, and keeping up with our savings goals and plan out the next month. It works very well, because it allows both of us to be in our natural states.


I know you can do this!

You can do it; you can change your whole life with a little hard work. Dave calls it “living like no one else so you can live like no one else.”

Take that first step and don’t look back!