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

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Are you in need of a major debt paydown?

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

debt paydownThe 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.

About the Author David Domzalski

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11 comments
2017 America Saves Week Resources – Run The Money says February 20, 2017

[…] Pay Off Your Debt […]

Reply
Cody @ Dollar Habits says February 25, 2017

Great tips! I enjoyed reading your debt story. Congratulations on paying off that much debt. $250k a year from your real estate business is really impressive. We were in a similar boat to you guys in that Mrs. DH did not go back to work after having our first baby. However, the financial impact was nowhere near as significant as what you experienced. She worked as a self-employed hair stylist, but going from two incomes to one is still nothing to be taken lightly. We talked about it and planned for it for a long time leading up to it. We knew becoming a one-income family would require sacrifices, but we decided they were worth it. Fast forward to now, Mrs. DH is living her dream and has really come into her own as a stay-at-home-mommy to two amazing little humans. She works harder than I do any day of the week, but she loves it and wouldn’t change it for anything. Now, if I could just reach FIRE so I could join them.

Reply
    David Domzalski says February 27, 2017

    Cody, that’s awesome that your family has it working out well for you on one income. It’s not easy being the sole income provider, especially today. The economy is based on dual income households, so we all really need to be proactive in how we handle things. Obviously, that means blogs like ours become even more important. Not just about educating people, but about letting people know that “hey, you’re not alone.” Look at Cody. Look at Dave. We’re in this thing together. And, yes, ultimately I hope we all get to FIRE!!! That’s my prayer for all of us 🙂
    David Domzalski recently posted…Take the #ImSavingFor Pledge for America Saves Week 2017My Profile

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Setting Your World on FIRE: Achieving Financial Freedom - Run The Money says March 15, 2017

[…] Finally, for this section, you need to consider your debt situation.  Do you have credit card debt?  Do you have student loans?  Do you have any other types of debt?  You need to know how much you owe and figure out how you can pay it off.  Nothing puts the breaks on financial independence faster than being dependent on someone else who you owe lots of money to.  You need to get that figured out and I can help you if you check out this post. […]

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3 Mobile Apps To Help You Save and Make Extra Money - Run The Money says March 19, 2017

[…] We only get one life. So, why not make it one where we’re smart about our money?  Take advantage of any opportunity you can to save yourself some money.  There’s no point in going through life with a scarcity mindset.  Take the time to go through these apps, figure them out, and keep budgeting, saving, and getting rid of your debt. […]

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How I Paid Off $20,000 in Student Loans Using the Debt Snowball - RUN THE MONEY says March 25, 2017

[…] 9 Ways We Paid Off $60,000 in Debt […]

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How I Paid Off $20,000 in Student Loan Debt - RUN THE MONEY says April 17, 2017

[…] 9 Ways We Paid Off $60,000 in Debt […]

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I'm a Fraud but You Should Still Listen to Me - RUN THE MONEY says May 31, 2017

[…] My $60,000 Debt Repayment […]

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Paying Off Debt: How Danielle Paid off Over $48,000 in Debt - RUN THE MONEY says June 16, 2017

[…] never seems to get old.  We’ve covered it a few times on Run The Money — both with my story and the stories of others like reader […]

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Lifestyle Changes To Pay Off Debt: 3 Tips to Get Started says August 14, 2017

[…] finding yourself “in the red” can cause tremendous stress and anxiety.  Yet it is possible to work your way out of debt — with smart planning and changes to your lifestyle and finances to slowly by surely dig your way […]

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