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How I Paid Off $22,000 Worth of Debt in Less Than Two Years



For the past five years, I’ve been reporting on research that shows how bad the average American’s financial habits are and offer solutions to their problems. The job even requires I pass a certification test every two years proving I know what I’m writing about. But on the day I got my certificate, I felt like a failure.

That’s because I was living a lie. My finances were just as bad as the people surveyed in my reporting.

I knew enough about personal finance to pass a multiple-choice exam on consumer protection laws, budgeting, and evaluating interest rates – but I owed $22,000 in debt myself. How could I advise others on their finances when I couldn’t manage my own?

That’s when I decided to make a change. I was going to apply everything I had learned as a personal finance writer to get out of debt in my own life and was able to in a year and a half.

Here are some techniques that will help anyone, no matter what situation their finances are in…


My problem: I never believed I needed a budget. And I thought I could just track my debit and credit charges after they were made through online banking. But that’s not a budget – there was no spending plan.

The way I was thinking is common. More than 1 in 10 Americans don’t use a budget, according to research. It wasn’t until I put it all on paper that I realized how important a budget is.

My solution: I wrote out what I earned and regularly spent with a pad of paper and pen, which I later typed on a Google spreadsheet. I categorized everything from my automatic monthly payments to average restaurant and bar tabs.

It was important to be brutally honest with myself. Some months I spent $700 going out. I didn’t know how bad it was because I wasn’t paying attention.

So I set a $100 weekly allowance for myself. That way I could stick to a debt repayment plan and still have a life.

Your solution: You can do the same – Google sheets are free. You can also use other budgeting products like Mint or Tiller, which link up to your financial accounts and automatically track your spending. Both are free to sign up for but offer upgraded, fee-based versions.

Credit cards

My problem: I owed $5,700 on three credit cards. Two were retail cards: one from Best Buy, the other from a jewelry store. Both had 12 months of deferred interest – meaning I didn’t owe extra if I paid the balance in full every month. The third card charged me almost 13 percent interest and had the lowest balance at $1,000.

My solution: I made a budget to see what I could afford to spend on credit cards. Then I used the largest chunk of my budget on the card with the highest interest rate while keeping the other two current with minimum payments.

Your solution: You may have more than one card charging high interest. You can contact a nonprofit credit counseling agency to see if you qualify for a Debt Management Plan. It can consolidate your credit cards into one payment at a lower interest rate.

Auto loans

My problem: I owed $8,000 on my 2015 Toyota Corolla. I had been making the minimum $317 payment set up by the bank that financed my loan. It was charging me 2.9 percent interest.

My solution: After I paid off my credit card debt, I had an extra $300 in my monthly budget. I took that money and added it to my regular car payment. Some months I was able to pay $900 toward my car, which was almost three times the minimum amount.

Your solution: You can refinance your auto loan or downgrade the vehicle you drive. The average interest rate on a 60-month car loan is currently 5.08 percent. If you have bad credit (614 or lower FICO score) it could be 14 percent or more. Only a portion of your car payment goes to the loan. Higher interest rates just mean a car is more expensive.

Tax debt

My problem: I worked as a freelance writer for a year before getting hired in a full-time position. Therefore, I was responsible for paying my taxes. I’d been advised to set aside 25 percent – 30 percent of my income to pay the IRS every quarter of the year. But I procrastinated and owed $3,000 when tax season rolled around.

My solution: My wife and I got married in February 2019, and our parents covered the ceremony costs. We were gifted $8,000 and didn’t take our honeymoon. So when April came around, I had money on hand to pay the IRS. Other couples go on a vacation of a lifetime. We paid off Uncle Sam.

Your solution: You can contact a tax resolution services company. It can set you up with a free consultation with a tax analysis. With help from a tax expert, you can settle your debt for less than you owe.

Student loans

My problem: I owed $5,500 in student loans, which were direct subsidized loans. That means I wasn’t charged interest until six months after graduation. When I was, my loans charged me 2.9 percent.

My solution: My car and credit cards were paid off. That freed up more than $600 in my monthly budget. By this point, I had a full-time job and started focusing on my student loan bill. I sacrificed eating out during the week and going out on most weekends. Most of my bi-weekly paychecks went to my student loan bill.

Your solution: You can refinance your student loans for a smaller interest rate. But this really depends on the student loans you borrowed. The government won’t allow you to refinance federal student loans. But then again, you may have those forgiven soon.

In the meantime, you could convert your federal loans to private. Then, shop around for lenders. Use a consolidation loan to combine all student loans you have into one payment with the lowest possible interest charge.

Now that I’m debt-free, I feel like a huge weight has been lifted from my chest. It’s easier to sleep at night and not sweat the small stuff.

Knowing I can save and invest in my future makes me feel confident about what’s ahead in life. My hope is that my story can inspire others to take charge of their finances and get out of debt.

Now matter what kind of debt you have, can help you solve it.

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