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How a teacher and a salesman in Arizona paid off $52,000 in debt in 18 months

"I literally was just trying to figure out as much as I could about personal finance."

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Deacon and Kim Hayes at Disneyland in Hong Kong.
Courtesy Deacon Hayes

In 2008, Deacon Hayes and his wife, Kim, "were newly married" and "living paycheck to paycheck" in Phoenix, Arizona, he says. She was a teacher and he was selling wood floors, and, "between credit card debt, student loans, and car loans, we had about $52,000 in consumer debt," he says.

He and Kim had different experiences of money growing up. Kim had come from an affluent family that "didn't really have budgets," and Deacon came from "a low-income family where we used credit and debt as a way of life," he says. Realizing how much they owed, the couple decided it was time to make some fundamental changes in their spending habits.

Deacon told his wife, "We're going to pay it off in 18 months." As he recalls, "she thought I was crazy." But by tackling each debt a little differently and paying off between $500 and $6,800 per month, the couple achieved their goal.

Here's how Deacon and Kim Hayes, now 38 and 40, respectively, and living in Scottsdale, Arizona, paid off their debt.

They read and figured out 'who's good with money'

To begin with, Deacon decided to get educated and learn everything he could about smart personal finance moves. "We didn't have the tools and the knowledge to tackle it," he says. "So I was a big fan of reading and figuring out who's good with money."

Deacon dove into Dave Ramsey's "The Total Money Makeover" and Howard Dayton's "Your Money Counts." He read investing books by Jim Cramer and John Bogle. "I literally was just trying to figure out as much as I could about personal finance," he says.

It was through doing this reading that he discovered a tactic for paying off debt. "I really love the debt snowball," he says of a term he learned from Ramsey. "That method is just listing your debts from smallest to largest, regardless of interest rate," and paying them off in that order.

This is the method the couple ended up using to tackle their debt.

Selling 'a car that was upside down'

In reorganizing their debts, Deacon made a couple of smart moves early on. They had about $8,000 worth of credit card debt from various cards. Interest rates varied, and he decided the easiest way to tackle them would be to consolidate. After paying some of it off, he asked his grandmother to loan him enough to pay off the $7,000 or so they had left, and she did, letting the couple pay her back that single $7,000 loan at a 5% interest rate.

Deacon realized "that I had a car that was only upside down about $1,000," he says, meaning that the car was worth $16,000 while the auto loan was $17,000. If they sold the car, they'd only have to make up $1,000 to knock out that loan.

The couple sold the car in March 2009, then "sold a bunch of stuff to come up with that $1,000," he says. "My wife actually had some designer purses that she was willing to give up. I had an old Nintendo Wii." That month, they were able to knock $18,600 off their debt.

They used a 'cash envelope system' to cut down on spending

To avoid getting into more credit card debt, the couple decided to forgo using plastic altogether. Instead, they used a cash envelope system for expenses like "groceries, entertainment, clothing," he says. They set a limit for such expenses, like $250 per month for groceries and $100 per month for entertainment, stuck that cash in an envelope, and only used the allotted sums for those activities.

To make sure they stayed within the limits they set for themselves, Deacon and Kim took advantage of deals at local eateries and supermarkets. "Typically, we would do something like Applebee's two for $20, two meals for $20 bucks," he says.

He and Kim called up various providers such as their phone and internet companies to see if there were deals they could be taking advantage of. "All of a sudden, you're saving $200-$300 a month just for making a few phone calls," he says.

Deacon and Kim Hayes' wedding.
Courtesy Deacon Hayes

Delivering pizzas after work for $15/hour

After spending months figuring out how to limit spending and save more, Deacon realized, "there's two parts to this equation. We were doing everything we could to save money, but the other part was I needed extra income."

"I went to every pizza joint within a five-mile radius and I was like, 'Hey, are you hiring?'" he says. Deacon ended up getting a job at Long Wong's, a local Arizona eatery, and working there for six months. He picked up 2 to 3 shifts a week working 5 to 6 hours and making $15 per hour.

That brought in another $1,000 per month or so to keep tackling their debt.

Deacon and Kim Hayes with their kids, Ben and Avery.
Courtesy Deacon Hayes

These days, Deacon and Kim are debt-free. Deacon is an entrepreneur running three different websites and pulling in six figures per year and Kim is getting her master's degree in history. They have two young kids. Deacon recently wrote a rap about his financial experience entitled "Everyday Millionaire," including verses like the following:

I buy most of my groceries at the Walmart
And put generic items into my cart
I use coupons when I can cause that is just smart
Saving money to me is like a work of art.

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