Debt Paydown: 9 Ways We Paid Off $60,000 in Debt

Are you in need of a major debt paydown?

I’ve been in thousands of dollars of debt a few times in my life.

The first was when I graduated college in 2006.  I left school with $20,000 in student loan debt.  Four years later, I was debt free.

That was until I bought my wife her engagement ring for $10,000.  Fortunately, it appraised for double and I paid the ten grand off in a year.

In 2016, we paid off $30,000 in credit card debt.  We accumulated this debt beginning in 2015.  My wife and I were working in real estate together.  She worked the business full-time and I helped manage things on a part-time basis in addition to my full-time job as an auditor.

Everything changed for us in the middle of March 2015.  It was when my wife saw the 8-week sonogram of my our son, Davey Joe (David Joseph).  My wife fell in love immediately.  It was indeed love at first sight.

After the appointment, we got in the car.  She turned to me and said, “I’m done.”  I asked her what she meant.  She proceeded to tell me that she wanted to close up shop with our real estate business and focus exclusively on nesting and motherhood.

We purchased our $455,000 at that time in a rather expensive zip code in 2011.  We bought that on an auditor’s and teacher’s salary.  My wife left teaching to become a real estate agent.  With our real estate business, we had $250,000 coming in annually.  Now, we were going to drastically drop that down to $75,000 — my salary alone.

From $250,000 to $75,000.  Yeah, awesome.  All so my wife could nest and knit, knit, and knit some more.

Don’t think I’m a jackass.  My wife is a fantastic person and I love her.  She is a wonderful mother to our 17 month old and loves him very much.  She was an excellent mother from the very beginning.  She’s a stay-at-home mother now and loves every minute of it.  I’m very proud of her and so blessed to have her.

But, come on.  I was in the shock of my life at the time.  It was a monumental challenge for us and a huge blow to our life plans.

With her not being committed to it full-time, we closed the real estate business.  We hung on to the deals we could to recoup some money, but we were done trying to get new business.  My 100% focus was now going to be my auditing job.

As you can see, folks, life happens.  One day you have a secure job or a thriving business.  The next day you’re putting up a “For Sale” sign in the yard trying to move to a place with a better cost of living.

Needless to say, the huge decrease in income killed our financial plan.  With business expenses still rolling in and increases in personal expenses (especially from having a new baby), we amassed credit card debt rather quickly.  Yes, as I said, $30,000 of it!

Look, we all get into debt.  It happens.  But, we also must get it together and climb out of the hole.

So, how did we do it?  What steps did we take for our debt paydown?  How did we manage to get out of $10,000, $20,000, and $30,000 worth of debt at different points in our lives?  Check out the methods we used below.  Granted, we didn’t use every method each time, but they’re all applicable to getting out of debt.

1. Stop getting into more debt as you begin your debt paydown.

The first thing you want to do is to stop accruing more debt.  This is especially true with credit cards.  Stop putting more things on the credit cards.  Switch to cash immediately.  Then, follow the next step.

2. Put a budget together to plan your debt paydown.

Stop what you’re doing and put a budget together right now.  List out everything you must pay and cut out everything you don’t need.  Trim the fat.  It’s hard.  Believe me, I know.  But, it’s essential if you want to move forward and dig your way out.  I have another post that goes into more detail for crafting your budget and removing unnecessary expenses.

3. Have an emergency fund.

I know it may seem counter-intuitive to start putting some money aside right now.  However, there is a method to my madness.  By setting some money aside for unexpected problems, you lessen the need for credit cards.  We have a tendency to use credit cards (my wife and I are very guilty of this) as a catch-all for life’s surprises.  But, doing so almost always leads to debt issues.  Stop it right now.  Read more about creating your Emergency Fund Preparedness Strategy.

4. Use the extra money for your debt paydown.

As we paid off the $30,000 in consumer debt, my wife and I still had some checks coming in for real estate.  We used every extra dollar to pay off that debt.  I mean every last cent.  We stopped spending and were totally motivated to dig out of the hole.  We considered it a substantial blessing from God to be fortunate enough to climb out.  Amazing.  Do not waste any windfall money on crap you don’t need.

5. Find additional work.

Pick up a part-time job or start a side hustle.  I don’t care if you have to use your kid’s bike to deliver papers.  Get your butt out there and make some extra dough.  My wife was a trooper with this concept.  I don’t get overtime at my job.  So, there was one point in 2010 or so that my wife taught Saturday school when she was a teacher.  That brought in some extra money.  In 2016, she also picked up consulting work with a local builder.  All of that extra money went to debt repayment.

6. Sell stuff.

Let me tell you something.  There is nothing more humbling than being in debt and having to sell your season tickets to your favorite baseball team on the corner.  Nothing more humbling at all.  But, we did it.  At different points, we had yard sales and sold stuff online.  Especially when we were moving, we sold things through Facebook yard sale groups or Craig’s List.  Whatever you have to do to dig your way out.

7. Pay more than the minimum to expedite the debt paydown.

If you’re only paying minimum payments on your debt, then you haven’t been paying attention to a thing here.  You must — I repeat must — pay more than the minimum payment.  Don’t say you can’t afford it.  Get out there.  Get a part-time job.  Sell some stuff you don’t need.  You have to make drastic changes.  You didn’t get in debt overnight and you won’t get out of it overnight either.  But, now is not the time for games.  Now is the time for sacrifice.  You will thank yourself later.  Sorry for the tough love, but come on now.

8. Use the debt snowball for your debt paydown.

We all need some motivation.  There is nothing that kills morale more than seeing a lack of progress toward your goal.  That is where the debt snowball comes into play.  The trick is to start with your smallest debt and get that paid off.  So, you get that paid while making the minimum payments on the others.  Then, once that debt is gone, go to the next smallest debt.  Keep on going until all the debt is bye-bye.  Your motivation will skyrocket as you see your debts falling by the wayside one by one.

9. Negotiate lower interest rates.

My wife does a funny thing every year.  She calls up the cable company and asks them if she has the lowest bill she can get for the services she absolutely wants.  Sometimes they will offer her a special or something to lower the bill.  Other times, she will just cut things out that we don’t really care about.  Channels or services we don’t really use.  It’s like a game to her.

You should use the same logic with your debt repayment plan.  For instance, call up your credit card company and negotiate a lower rate.  To get started, you should first make sure to check out your credit score with a place like Cafe Credit.  That way, you know exactly where you stand and what you’re working with.

Then, armed with the necessary information, call up your credit card company.  What’s the worst that can happen?  In fact, it’s actually something a lot of people are successful at.

It can’t hurt to ask.  The worst they can do is tell you no.

Conclusion: You can do this.  You can complete your debt paydown!

I’ll admit.  Having to do a massive debt paydown can be stressful.  It’s such a headache to figure out a proper repayment plan and then sticking to that plan.  However, I can attest that living with the tightness in your chest that comes from being in debt is even worse.  Oftentimes, my wife and I would not even want to discuss money matters.  When one person brought it up, it would inevitably lead to a fight.  And that’s not the basis of a healthy marriage or a healthy life.

You need to get your debt under control.  In order to do that, everyone must be on board.  Further, you can’t get down on yourself.  You need to realize that these things happen to many people.  But, not everyone has the courage to do something about it.  You’re different.  You have the courage to dig your way out.  You can do this.

Are you in debt?  Did you recently implement your own debt paydown strategy?  Are you using the debt snowball or a different method?  Tell us your story and share your tips below.