Living Debt-Free: 3 Lessons I’ve Learned Paying Off Debt

We’ve all seen those articles floating around about how people paid off insane amounts of debt in a relatively short time while on a fairly small salary. Usually, there’s some sort of twist like: “I inherited my house” or “my parents paid off my student loans.” This won’t be one of those articles.

A few years ago, my husband (Drew) and I were in a lot of debt (for us, everyone has different thresholds). I had lived off credit cards in grad school, my husband had taken out a loan for his car, and we both had student loans. We also have a mortgage. We were sick of so much of our paychecks going toward debt each month, so we decided to start the journey toward becoming debt-free. It hasn’t been easy, but we’ve learned a lot. Today, I wanted to share just a few of the things we’ve learned over the past couple of years.

1. It’s easier to pay off debt if you have a plan

There are many techniques for paying off debt — the snowball method, paying off the loan with the highest interest rate, debt consolidation, etc. The way you choose depends on what’s right for you, but no matter what — have a plan! Without one, it’s easy to become overwhelmed.

We chose the snowball method. We only had about a year left on Drew’s car loan, so it was pretty low at this point. We put extra cash toward that every month. Then, when that was paid off, we took the car payment amount plus our spare cash and put it toward the credit card with the lowest balance. 

Listen: Saving Money & Creating a Budget with Leah Janik

2. It’s addictive

Seeing a $0 balance on Drew’s car was exciting and encouraged us to keep going and pay everything else off as quickly as possible. Then, we saw a $0 balance on a credit card, and the excitement grew. Watching our debt decrease is fun, even if it means we have to sometimes sacrifice buying something we really want. 

3. Don’t beat yourself up about how much you’re paying

This one is two-fold:

  1. Don’t get upset with how much debt you have. Being discouraged about it isn’t going to help you pay it off. Instead, focus on your financial goals and recognize that you’re now taking steps to decrease that amount.
  2. Don’t panic about how much you’re paying each month. Each month, I set a budget (using EveryDollar) for how much extra will go toward our debt. Some months, it’s not a whole lot extra because we have other expenses that we have to pay, or we’re finally going on vacation. Other months, we’re putting a large amount extra toward debt (which is always a great feeling for me). 

If you’re trying to live debt-free, the biggest thing you can do is be careful that you’re not adding to the debt you already have.

Read also: Saving Money: 9 Tips to Save More This Year

stack of 20 dollar bills under a laptop