Debt Reduction

How We Paid Off Our Credit Card Debt

Several years ago, my wife and I paid off our credit card debt.  Here’s how we did it –

We changed our spending habits.

We stopped using our credit cards and started using the envelope system.

We started to have weekly budget meetings and created a zero-based budget.

We reduced or eliminated non-essential monthly expenses.

We created a debt reduction plan.

We chose to follow the debt snowball, illustrated here.

We focused on balances, starting with smallest balance first, for the psychological boost of eliminating entire accounts from our debt reduction plan, quickly.

We made use of a zero-percent balance transfer, which we paid off before the introductory rate expired.

We worked as a team.

We refused to argue about money.  Instead, we created a plan and we stuck to it.  Even when we had setbacks, we remained committed to our goal.

We established and used an emergency fund.  This helped us avoid accumulating new  credit card debt.

We earned extra income.

We sold things we did not need.  I worked to earn a bit of side-income.  We used eBay and yard sales.  Rather than keep clutter, we got rid of it.  Every extra cent went towards debt reduction and eliminating our credit card debt.

Getting out of credit card debt can be done.  For us, the process took a little less than a year.  We kept our focus, dealt with the inevitable setbacks, and worked the plan.