They Paid Off $218K of Debt—Without Windfalls or Six-Figure Salaries
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Delaine“I paid off $45,000 of debt in less than five years.”

Delaine Moore, 28, public relations professional in Tustin, Calif.

“After my 2010 graduation, I was on the hook for $20,000 in student loans and a $15,000 car loan. Then I racked up $10,000 in credit card debt over the following two years—expensive travel splurges, not budgeting and eating out all the time added up fast. Getting laid off as a social media specialist in June 2011 didn’t help, either.

I landed a gig as a communications specialist three months later, giving me a $30,000 salary to work with. This left no room in my budget for traveling (something I absolutely love), which was my a-ha moment to get out of debt.

I created my first-ever budget in December 2011 and saw that something as simple as my daily coffee run was costing me $100 per month! I swiftly changed my behavior, limiting my clothes shopping and opting for get-togethers at home instead of going to restaurants and bars. In 2012, I refinanced my car (which saved thousands) and talked my roommates into cutting cable. Over the next three years, I often paid $1,000 a month toward my debt.

Even as my salary grew—hitting $50,000 in 2015—I maintained my frugal ways. When my car was totaled, I used the insurance payout to wipe out the balance, and even had some leftover. I then carpooled for six months instead of buying a new one right away. I also funneled all cash from tax returns and bonuses toward my debt—tackling the highest-interest balances first and using balance transfer cards.

By April 2015, I was officially debt-free! I’d even saved up enough for a European vacation. And since I never stopped kicking into my 401(k), I currently have a hefty amount saved for retirement. I also recently topped off my emergency fund to six months’ of living expenses.”

Cassie and Alex“We used the ‘2 percent rule’ to knock out over $108,000 of debt.”

Cassie, 35, and Alex Michael, 43, a stay-at-home mom and software engineer in Salt Lake City, Utah

“Debt was part of our story for years—we even took out a loan to pay for our honeymoon. Within a few years of marriage, we’d accumulated over $108,000 of consumer debt by living way beyond our means. Everything from vacations to eating out went on credit.

Having our first child in 2004 nudged us to start paying it off. Alex was earning $65,000 as a software engineer; I was a stay-at-home mom. But we persisted, introducing severe lifestyle changes (like literally living off rice and beans).

After three and a half years, we’d eliminated $15,000—but had serious debt fatigue. So in 2007, we created our own method called the 2-percent rule: Every month, we aimed to decrease our spending by 2 percent—a manageable amount that doesn’t require drastic measures—while increasing our income by 2 percent. All that freed-up money went to debt.

I spearheaded the income piece by selling things like popular toys, name-brand clothing and collector’s items on eBay, teaching couponing classes and flipping furniture. At first, these side hustles brought in a few hundred, but gradually scaled up to about $1,500 a month.

We focused on little ways to decrease our spending to add up to 2 percent, like cutting our grocery bills, cable and cell phone bills. (This worked for several months before we had to just focus on the income piece.)

Once we had momentum, we starting throwing about $1,000 per month at our debt—then built up to almost $4,500 per month toward the end, thanks to my side gigs and the snowball method. We also applied Alex’s bonuses and tax returns directly to debt.

We made our final payment three years later, in April 2010—all the while, our income never surpassed $100,000.”

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