This editor gave herself 30 months to pay of $55,000 in debt—here’s how she did it even faster

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This Article reprinted with permission of nerdwallet,

holly carey

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Paid: $55,630 in 26 months

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I was not always naughty about money. In fact, when I decided to take control of my finances in January 2015, I didn’t even know how much debt I had.

My mom gave me a personal finance book for Christmas that year. I read it in two days and went from being oblivious about my finances to starting an emergency fund and budgeting. My ultimate goal was to pay off all my debt, and I gave myself 30 months to do it.

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I still remember when I was sitting to crunch numbers. I honestly had no idea how much my car, credit cards, personal loans and student loans would cost. I was shocked when I found out I owed more than $55,000.

This was especially upsetting because I had recently moved to Washington, D.C., and was already nervous about the expensive city I had made my home.

Watch, How to Balance Saving for Retirement and Life in Your 30s

budgeting and cutting expenses

I was lucky that I got a secure job with that government which paid well. At the time, I worked for the Navy as a civilian and served in the Naval Reserve as a public affairs officer. By the time I paid off my loan in March 2017, my total annual salary was about $100,000.

i used one zero based budget, which means that every month my income minus my expenses, loan payments and savings equals zero. This gave me a clear plan for spending and saving each month. For example, when the money I budgeted for my entertainment ran out, I stopped going out for the rest of the month. I used the cash to pay for certain spending categories – like dining out, groceries and on the rare occasion I went shopping – to make sure I didn’t overspend.

Even though I was earning a decent income, I still felt a stretch every month because of my monthly minimum payment and the high cost of living in D.C. My 600-square-foot studio apartment, which cost $1,800 a month.

After learning how to budget and stick to it, I got serious about cutting back on my expenses. I ended up living with a roommate, which reduced my rent by $600 a month. I rarely eat out, and when I did, I ordered Happy Hour specials. I stopped buying clothes and also canceled my Amazon AMZN,
-1.14%
Prime Membership. These changes weren’t easy, especially after moving to a new city and setting out to explore and meet new people, but I knew they weren’t permanent.

pay off debt

There are two popular ways to pay off debt: the debt snowball or the debt avalanche. if you use debt snowball, you pay off your debts in order from smallest to largest. You focus all of your extra debt-paying money on the smallest loan while making minimum payments on the others. When it is paid, you rollover that money to the next one. With debt avalanche, you pay off the loans in order of the highest interest rate, again focusing all the extra money on one loan while making the minimum payments on the others.

as well How much should I invest?start investing

I used the debt snowball method, which got me up to speed in the early days by paying off even the smallest of loans. This freed me up to use more money to deal with larger debts like my student loans.

Since I had repaid all my debt in such a short time, I was not worried about interest. If I had expected this to take a long time, I would have considered the amount I could save by paying off the high-interest loans first.

meet my husband

A year into my debt repayment journey, I met my future husband, Brian.

I remember Brian taking trips to Las Vegas and the Rio 2016 Summer Olympics, and I secretly wondered if he was carrying a pile of debt. I doubted that our relationship would work if we had different philosophies about money. I was trying very hard to get out of debt, and I didn’t want to be tempted to give up on my new lifestyle.

Once we were seriously dating, I told Brian about my debt and my plan to pay it off. I am relieved to know that there is no debt on him. And although he was not as averse to debt as I was, he accompanied me on my journey and celebrated with me when I made my final payments nine months before my wedding. I paid off all my consumer loans in 26 months.

life after debt

Our money talks got us ready for our engagement, paying cash for our wedding, relocating to a new city and buying a house. In June 2019, Brian and I welcomed our daughter into the world. In those early days as new parents, we were filled with adoration, awe, and caffeine while learning to soothe our crying baby, washing her bedtime laundry and endless loads of naps. However, because we were free of debt and remained intentional with our money, we never had to worry about finances with our new baby.

check out: Here’s How to Live Without Rent in a Historic Home

Now almost four years into our marriage, we live debt-free (abandoning our mortgage), continue to set financial goals, create monthly budgets and communicate great about money. Our next goal is to pay off the house quickly.

Once I learned about personal finance, I couldn’t stop myself from sharing it with everyone I knew. I also conducted coaching sessions to teach family and friends how to set budget and financial goals. You can imagine my excitement when I saw a job posting for an editor position at NerdWallet – my dream job!

Read further: This is what Suze Orman and Ramit Sethi both say if you’re worried about inflation

how to pay off your loan

If you’re feeling inspired to tackle your own debt, consider these steps:

more from NerdWallet

Holly Carey writes for NerdWallet. Email: [email protected]

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