Debt Reduction, Debt Story

Get Out Of Debt – One-Page Summary Of Our Process

It’s been a minutes since I last wrote about debt reduction – so I thought I would write out a simple, one-page summary of the steps that my wife and I have taken to eliminate our debt.

1. We established a small emergency fund. We started with $1000 in cash – and our fund fluctuated between $800 and $2000 during our debt reduction process.

2. We created a (and followed) a zero-based budget. We “spent” our paychecks, on paper, at the beginning of each month, so that we would know where our money was going to go.

3. We listed our creditors and associated debts, by amount, smallest to largest. (Another option, used by many, is to list debts by interest rates, largest to smallest. Whatever works, works. We liked the idea of paying off smaller debts first, to see some progress, and this worked for us.)

4. We paid minimum payments to all of our creditors – and any extra money went towards paying off the debt at the top of our list. Once a debt was eliminated (paid off), that creditor was removed – and replaced at the top by our next debt.

5. We continued this process – the classic debt snowball – until we paid off all of our creditors and eliminated all of our debt.


Throughout the process –

1. We learned to make payments as soon as possible – thus reducing the time for interest to accrue.

2. We used a single balance transfer to reduce the interest rate on one of our credit cards. This was back when credit card companies routinely offered no-fee balance transfers.

3. We took several opportunities to earn extra income – by selling things we didn’t need and taking on odd jobs. I also started this blog, which did (and does) earn a small amount of income.

4. We looked for – and capitalized on – ways to save money – including eating at home, reducing miscellaneous spending, and requesting discounts. To be honest – we could have done a much better job at these things, but did choose, from time to time, convenience over cost.

5. We remained dedicated to our process and worked really, really hard. We were successful – and able to pay off our non-mortgage debt.

Our current goal is to eliminate our 15-year mortgage. We are currently in year 6 – and we have already reduced our expected payoff date by more than a year.

It has been several months since I last wrote, but I am happy to be back to my regular schedule with regular posts. Blessings. Please use the buttons below to share.

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