How We Paid off About $25000 in One Year

I cant tell you how many people have asked us how we have paid off so much debt recently. So, I decided to lay it out there and tell you how we have come this far. If you think it has been a walk in the park, or its simply black and white- do this and don’t do this, you are mistaken. We have make many mistakes, and had some set backs along the way. We don’t always get it right and we haven’t had any training in finance. This is just how we are doing it, it might not work for everyone so take what you want from it.20161004_163803

The very first step is to get $1000 in your savings account for emergencies. Try to do that as fast as you possibly can. If that means selling something for working an extra side job, do it! Get it done in 1 month if possible. If you already have that, awesome job!

Then we wrote down all of our debts smallest to largest. We started with our windows and we owed around $4000. This was our smallest debt so we started putting all our extra money after the bills were paid towards this debt.

The next step we took was writing down all the bills we had for the month. I include EVERYTHING! Gas, groceries, lunch money, fundraisers you know are coming, sports… ect. I have a notebook I keep everything written down in. The hubs gets paid every 2 weeks and he has an annually salary so I know exactly what he will be getting. Some of you might not be able to do this exactly if your salary changes weekly. Although you probably know around what you will get, so just err on the side of caution and plug in the lowest amount you think you will bring home. Then I write down the dates he will get paid and figure out all the bills that will need to be paid during that pay period. After I put EVERYTHING down, add it up and see what is leftover. Example: if you bring in $1800 every 2 weeks, and after you add up all the bill and expenses you have until next payday you have say, $400. We would pay $300 toward the debt we are working on paying off. I like to leave a small amount not going towards anything just in case something does come up that I wasn’t aware of. That is NOT to be used if its not absolutely needed though. Then when next payday comes you should be able to transfer that $100 to go towards the next weeks debt. When we first started out we would only have a very small amount extra to go towards our debt. But even an extra $100 will get you farther then if you were just paying minimums. Now we are able to put almost $2000 a month towards debt. Every time you get a debt paid off your amount to go towards your next debt increases. Lets say you are working on paying off a $300 car payment and you have been putting an extra $200 towards it a month. When you get it paid off you will then have an extra $500 to go on your next debt. It starts adding up fast once you get going.

One thing that helped us is we started using cash for everything. Its a bit of an adjustment at first if you are not used to doing this. We have a small plastic organizer that we keep our money separated in.  There is a pocket for eating out money, one for groceries, one for lunches, one for extra things that come up. you could have one for car maintenance another for kids sports and activities.  One thing you have to be disciplined about is once you spend your set amount of money in each area, you are done. No using your debit or credit card. So you need to plan ahead and be a wise spender.


Sometimes we have to say no to the kids when they want to do something. We have to remind them that this is only temporary and we will be so much better off if we make this sacrifice right now. For the most part they don’t even realize how much we are living under our means at the moment. For so long we were spending every dollar we made and more. We thought we needed to have the latest gadgets and a lot of people only get the name brand clothes. Ive always been a cheap shopper, only hitting the clearance racks so that’s never been an issue for me but I know it is for many others.  Ive always thought that it was just a way of life always having a car payment and never having much extra. Everyone has always told me, that’s just the way it is. Everyone has car debt and a mortgage, credit cards and student loans (Although we are lucky enough not to have student loans since the Air Force pays for school.) So I didn’t really think we were doing anything wrong. If anything I figured we were doing it right. That’s what everyone else I know does. But NO! That’s not right! Its very VERY wrong. If you don’t have money to pay for it then you need to wait! Don’t borrow money that’s going to take you years and years to pay off. Why do we humans do that? We need to stop wanting everything and thinking we are allowed to get it without working for it. We are all so entitled, thinking just because we work hard we deserve to have it NOW. No, I’m done thinking like that. That way of thinking would have kept us in debt our entire lives had we not come to our senses. Now once we pay back everyone we have borrowed money from and start saving for cars to pay cash with, vacations and funding our retirement, then we absolutely deserve those things. Only because we saved the money and paid cash for the things we want. I think about all the extra money we will have when we don’t have to pay all these bills. WOW its kind of a lot! How much extra money would you have if you didn’t have to pay for your debt? Add it up and then think about all the things you could do and invest with that extra money. If that doesn’t motivate you then I have no idea what would.

We also stopped funding everything extra. The kids savings accounts, retirement, vacations etc.. The faster we get this debt out of the way we will be able to put so much more into those accounts. We also got on the phone and tried lowing bills. Such as phones, cable and car insurance. By switching our car insurance we are now saving about $80 per month! Shop around and it can increase your income! We are also going to be switching our health care to save money. We will be saving over $300 per month once it takes effect. Do your research and find out if a cheaper plan could work for you as well.

The bottom line is we just needed some self control. Well maybe a lot of self control. We had to write out a budget and stick to it. If it wasn’t written down then we were not going to be able to do it. Its hard wanting things you are used to buying and splurging on. Eating out was our downfall… We had to put a stop to that. Spending hundreds of extra a month on fast food and restaurants. Now we budget for $60 every 2 weeks. Some nights I don’t feel like cooking at all but if we spent our eat out money then I just don’t have a choice. I HAVE to cook dinner. Every other Tuesday night, the night before pay day, we sit down when the kids go to bed and go over the budget for the next two weeks. Its actually fun now. We get excited when we see how much money we will be able to put towards the debt. It wasn’t always like that though. We spent many years only being able to pay the minimum on everything. If you are where we were, you have to make a change. It will be so worth it.