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How I Paid Off $54,000 in Debt

I spent all of my 20s living in debt.

At the time, it was what I perceived to be a normal life for a 20-something: credit card debt, a monthly car payment, and student loans.

As a college student, I had signed up for my first credit card and the interest rate was ridiculously high because I had no credit history. I didn’t even blink twice at student loan payments because I believed that was what everyone did in order to attend college.

Then between my shopping addiction, social outings, and annual vacations, I easily built up tens of thousands of dollars’ worth of debt on my credit card. I continued to sign up for store credit cards because I wanted the 10% off they offered on my purchase.

The bigger financial picture never entered my mind: the interest that I would be accumulating every month by just paying the minimum payment.

Once I moved out of my mother’s house at age 24, I was on my own and had to deal with rent and utilities. My money got a bit tighter and reality set in—but so did denial.

I became fearful of logging into my checking account to see my available balance or worse if my account was overdrawn. Instead of getting a hold of my finances, I used my credit card to make up for the money I didn’t have in my bank account. I did not want to see the truth and as a result, I kept digging myself into a bigger hole financially.

After reading Dave Ramsey’s The Total Money Makeover in September 2013, I decided to face my fears and write down my total debt I had managed to accumulate. It was nearly $54,000.

My two credit cards totaled $11,745, my undergrad student loan balance was $18,751 and my grad school student loan balance was $23,769. I entered my balances into a debt-repayment calculator; if I kept on making the minimum payments it would’ve taken me well over 20 years to pay it all off.

“I did not want to be in my 40s paying for material things that I had charged on my credit card decades ago.”

I knew right then and there that I did not want to be held captive to my debt any longer. I did not want to be in my 40s paying for material things that I had charged on my credit card decades ago. I did not want to pay thousands of dollars worth of interest if I knew that I could pay off the debt quicker.

I knew that short-term sacrifices and adjustments had to be made throughout my journey to get debt free, but I was prepared to do anything to get rid of the debt.

Three years after I started my journey, I  successfully paid off approximately $54,000 of debt. Below are the strategies that helped me achieve debt freedom in December 2016.

Create a Plan of Attack

I knew that I wanted to get rid of this debt as quickly as I could. I decided to try the debt snowball method. I listed my debts from the smallest balance to the largest balance. I attacked the smallest balance first which was my $5,871 Chase credit card. I paid on average $200 a month, which was more than the minimum payment until the balance was completely gone. Then I snowballed that $200 payment and applied it towards the next largest debt, which was my $5,874 Bank of America credit card.

After two-and-a-half years, and with all my credit cards paid off in March 2015, I tackled my undergrad student loans. The minimum payment at the time was $165 a month, but I was able to increase the payments until I paid it off in December 2015. The final debt was my grad school student loan payment and I aggressively paid this off until the balance was paid in full at the end of 2016.

Read more: How to Pay Off Debt

Get on a Budget

Before each new month began, I got into the habit of writing down a monthly budget in Excel. I listed my income and then subtracted all of my expenses including rent, utilities, and monthly debt payments.

I allocated a certain amount of money towards groceries, gas, transportation and other small personal expenses.

After reviewing my budget, it was eye-opening to see that a huge portion of my money was going towards paying off debt every month. My minimum monthly debt payments accounted for about 33% of my take-home pay.

Read more: Make a Budget in 5 Steps

Is it a Need or a Want?

Once I had my budget in place, I was able to track my daily spending habits in Excel so that I could see where my money was going. I noticed that I was doing a lot of frivolous spending on items that were “wants.”

I decided to cut down on my daily coffee habit, nail appointments, and book purchases, for example. Instead of depriving myself, I bought a coffee maker and made coffee at home. I invested in good quality nail products and had spa nights at home. I’m still a bookworm, but now I visit the library and check out any book for free. By making these small changes, I was able to save about $150 a month.

Fewer Vacations, More Staycations

In the past, it was so easy to travel and go on vacations because they were always charged to my credit card and I didn’t have to worry about the payment right away. While on my debt-free journey, I decided to put the vacations on hold temporarily. Instead, I went on road trips or enjoyed free activities right in my very own city. I visited local beaches, went on hikes, and attended local museums with discounted library passes.

Get on a Meal Plan

Americans spend $3,008 on dining out each year. Besides it being a convenience factor, it is also a huge blow to the budget. In order to cut down on the food expense, I created a meal plan for the week based off what was on sale in the supermarket flyer. You do have to dedicate time towards cooking meals at home, but by bringing your own lunch and snacks into work you can potentially save about $10 a day.

Read more: Your Food Budget: What’s Eating Your Money?

Review Your Bills

The first thing to go was my expensive $120/month cable package. We live in a world now where there are cheaper options such as Netflix ($7.99/month) and Hulu ($11.99/month). So I downgraded my package down to basic cable and cut my monthly bill in half. If it’s hard to get rid of your cable package completely, you can always call your service provider and ask if there are any current promotions available to help you save money.

Call your credit card company and ask for a lower interest rate. You can also consolidate your debt and transfer your credit card balances to another card with a lower interest rate or try a credit card consolidation personal loan. If you are dealing with a high student loan interest rate like I once did, you have the option to refinance your student loans and reduce your monthly payments.

Read more: When It Makes Sense to Refinance Your Credit Card Debt

Use Coupons and Apps for Extra Savings

Clipping coupons have helped me to cut my grocery and household items budget in half. There are coupon databases available online that will help you to see if there is a coupon available for a certain product. Saving you both time and money. I’m no longer a shopping addict, but when I do go shopping I typically go straight to the sales rack to get the best deals. Before I hit the checkout line, I always check Retailmenot to see if there are any available coupons to help me save even more money on my purchase.

If I can do this, so can you. You may get discouraged when you face that mountain of debt initially and fall off the wagon a few times along the way, but do not give up.

This journey won’t be easy, but believe me when I say it will be worth when you become debt free. Put in the work, make small changes and watch the path of your financial future change for the better.

Stephanie F. is a freelance writer and writes the blog Nerdy Bargainsista.

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.