How I Paid Off $25,000 of Debt in 14 Months

First of all, if you are in college right now, please do everything in your power to keep your student loans to a minimum! I really wish that I didn’t have to experience the story below.  Never having that debt would have been much more delightful, for me anyway.

My wife and I had recently gotten married and moved into an amazing rental complex in South Florida.  There was a work-out facility, some tennis courts, and a gorgeous pool.  It was heavenly, that is, until the bills started coming in the mail.

Somehow it had slipped our minds that once we graduated from college, we had to start paying back our student loans.  Between my wife and I, we had $18,000 in student loans plus a vehicle that we owed $7,000 on.  Yep, that was a total of $25,000 in debts!

As newlyweds and recent college grads, we didn’t have two nickels to rub together and had no idea how we were going to afford even the minimum payments on these loans (and it was only $75!).  Our finances were heading backward and we felt the pressure. We knew something had to change.

1) Have a Reason

Our reason was simple, we wanted to survive!  I never saw myself as the next bankruptcy victim, but if we kept sliding backwards into more and more debt, we would have certainly experienced it!

  • Begin to hate debt;
  • It’s OK to be afraid.  It can actually be your fuel to release yourself from financial bondage;
  • Begin thinking of a get-out-of-debt reward.  For us, it was moving back to our hometown – we really missed our friends and family.

2) Set Up a Budget

This sounds so simple, but I bet 95% of us do not know where every penny of our income is going every month.  I know I didn’t.  When I set up our initial budget, I thought that we should have had an extra $500 a month, but in fact, we were in the negative.  This will take you a few months to figure out.

3) Plan for Emergencies

You can never predict when an emergency is going to happen, but you can guarantee that at some point, one WILL happen.  Set aside at least $1,000 in your emergency fund to cover those unexpected expenses.  Here are some that we experienced along our debt-free journey:

  • Broken radiator (twice!)
  • Broken A/C fan (we lived in South Florida, this is a necessity if you don’t want a moldy car)
  • Speeding ticket (my fault, twice)
  • Flat tire (rode over a nail somewhere…)

If you own a house, perhaps you want to up your emergency fund to $2,000.  A water heater alone could wipe out that fund.

4) Make Sure Someone is Holding You Accountable

Since I was married, my wife and I were constantly holding one another accountable.  I wouldn’t let her get those $100 pair of jeans, and she wouldn’t let me buy that brand new LED TV that I’d been drooling over.  We were a good team.

If you’re single, try to find someone that you can trust and meet up with them once a week.  Chances are, if you are thinking about buying some new gadget that’s not in the budget, but you know that you have to fess up to your friend the next day, you are going to pass on that very tempting item.

5) Plan Small Rewards Along the Way

We started out paying off my wife’s student loans first (higher interest rate), and planned an out to eat dinner at Carrabba’s when we succeeded.  Boy, when that debt was down to $1,000, we were starting to salivate!  It was a great reward for a partial success.

You Can Do it Too!

Let me tell you, it feels great to be debt free, especially in these uncertain times.  If you are considering paying down those debts, I would strongly encourage it!

Are you currently making an effort to pay down your debts? Have you hit any roadblocks along the way? What has been your experience?

This article is written by Derek from  He started his journey as a broke college graduate, but has since been able to pay off $25,000 of debt in only a short time.  Derek has graciously outlined the steps he took to become debt-free.  Perhaps it could help you too.

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Published or updated December 8, 2012.


  1. Wow! Congrats on the quick debt repayment!!! And you are very right, a married couple does best when each member of the couple can hold the other accountable and be supportive at the same time. Woot for couplehood teamwork, lol!

    • Thanks for the congrats Crystal! We really didn’t make that much headway (and had a few arguments) when we weren’t heading in a common direction. The moment that we decided on a budget together, we stuck to it perfectly! 🙂

  2. Great job- You’re correct, 95% of us don’t really know where our money is going. That’s why it’s important to keep a spending journal. I know, it might sound dumb, but after you look at the numbers every week it’s surprising on how much money is going towards a starbucks coffee 🙂

    • Yep. I think if my wife and I did not watch out spending, we’d overspend in food (going out to eat all the time has quite a large price tag attached to it at the end of the month) and clothes (the clothes are more her than me). At this time of the year, I have to be careful not to spend too much on golf either. Man, I love that game!

  3. Saving and budgeting is great, but in the end, increasing income is the way to go. Obviously easier said than done, but it’s the most effective, especially in the short period of time you were able to complete that debt paydown. I was able to take care of about 15k in 6 months, which took a lot, but i had a good work bonus come in that helped as well….though the rest was from budgeting and cutting back.

    • Yep, if it’s possible to increase your income at the same time as cutting back, you could pay down debt incredibly fast! I started increasing my income with my website, but it’s definitely a slow climb to a decent cashflow.

    • Increasing income is awesome but you still need to know where your money is going. If you have the habit of spending too much and putting it on credit cards and building up debt, then increased earnings may just give you more ammo to spend with.

  4. What a great success story! Thanks for sharing! Accountability is key in my eyes.

  5. No problem Jenna! I don’t think there are enough of these stories around!

  6. Congratulations! What are you taking on next? Success leads to more success. Keep it up

    • Well, the next step would be to save a real emergency fund – this should be at least $10,000. Then we are going to save up and buy a house! The plan is to pay it off in 3 years. We can do it, and I’ll outline it on my site one of these days… 😉

  7. Scott Messner says:

    Great story Derek. A solid budget is the starting point to turning things around. You’re absolutely right in suggesting a larger emergency fund if you own a house and cars. $1000 can be wiped out in an instant.

    • Yep. That emergency fund should most likely be above $2,000 if you own a house. Then after your debt is paid off, you should probably beef it up to nearly $20,000! I know it sounds like a lot, but it’s extremely essential when that emergency strikes.

  8. That is impressive Derek! Congrats! Your step by step plan is one that needs to be told to anyone in debt. What’s next!?

    • What’s next? A big emergency fund and a buying a house! Since my web income is increasing and my wife is starting her own business (with minimal start-up costs), I think that we could own that house free and clear in no-time (under 3 years for sure)! 🙂

  9. optionsdude says:

    Congrats on paying off that debt. Having an accountability partner is absolutely key in this area. My wife and I are losing weight and keeping each other accountable. Had to skip cheesecake last night because of it, but it is working well. I am down 13 pounds since mid-February and she is down 11. The same principles that enable weight loss enable debt repayment. Watch income and outgo, track that information down to the penny, focus on a goal and target date, allow for small indulgences at period intervals of progress.

  10. Lisa@PacificCascadeCreditUnion says:

    Great post! and congrats on paying off your debt! I am beginning the process of paying back loans and it can be hard, but there are some good tips in here to keep me motivated to save! thanks!

    • I’m glad I can help Lisa! Paying off debt can get pretty difficult after a while. The excitement just seems to wear off. But, as long as you stick with it, and realize that you ARE making progress, you will get rid of that debt once and for all!!! 🙂

  11. So inspiring! Far too many people have a negative attitude about repaying their debt and making the necessary changes to do so. They’ve failed before they ever begun.

  12. Joshua Fitzgerald says:

    Quite an accomplishment. I talk to so many people a day, being that I work in the financial sector, who have no clue how to manage debt. Everyone knows how to spend, no one knows how they plan on paying it back. Taking control of your finances is the key to long term success. Thanks for your post.

  13. Super Frugalette says:

    Congrats on accomplishing your goal. I have to say after nearly 7 years of marriage. Having a functional budget that we both agree on has made financial conversations easier. Also, even when our budget has been tight, we have cut down on many things but always given ourselves enough money in our own personal accounts so that we do not squabble about personal spending decisions.

  14. I like the concept of budgeting! I’ve learned your income is one of your greatest assets and so many people don’t do it and allow money to disappear right under their nose. Budgeting gives you that outline on where your money is going. Great job on getting that debt paid off!!!

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