How I paid off $22K in debt in less than 2 years


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For the past five years, I’ve been reporting on research that shows how bad the average American’s financial habits are and offer solutions to their problems. The job even requires I pass a certification test every two years proving I know what I’m writing about.


But on the day I got my certificate, I felt like a failure.


That’s because I was living a lie. My finances were just as bad as the people surveyed in my reporting.


I knew enough about personal finance to pass a multiple-choice exam on consumer protection laws, budgeting, and evaluating interest rates – but I owed $22,000 in debt myself.


How could I advise others on their finances when I couldn’t manage my own?


That’s when I decided to make a change. I was going to apply everything I had learned as a personal finance writer to get out of debt in my own life, and was able to in a year and a half.

Here are some techniques that will help anyone, no matter what situation their finances are in…


My problem: I never believed I needed a budget. And I thought I could just track my debit and credit charges after they were made through online banking. But that’s not a budget – there was no spending plan.


The way I was thinking is common. More than 1 in 10 Americans don’t use a budget, according to research. It wasn’t until I put it all on paper that I realized how important a budget is.


My solution: I wrote out what I earned and regularly spent with a pad of paper and pen, which I later typed on a Google spreadsheet. I categorized everything from my automatic monthly payments to average restaurant and bar tabs.


It was important to be brutally honest with myself. Some months I spent $700 going out. I didn’t know how bad it was because I wasn’t paying attention. So I set a $100 weekly allowance for myself. That way I could stick to a debt repayment plan and still have a life.


Your solution: You can do the same – Google sheets are free. You can also use other budgeting products like Mint or Tiller, which link up to your financial accounts and automatically track your spending. Both are free to sign up for but offer upgraded, fee-based versions.

Credit cards

My problem: I owed $5,700 on three credit cards. Two were retail cards: one from Best Buy, the other from a jewelry store. Both had 12 months of deferred interest – meaning I didn’t owe extra if I paid the balance in full every month. The third card charged me almost 13 percent interest and had the lowest balance at $1,000.


My solution: I made a budget to see what I could afford to spend on credit cards. Then I used the largest chunk of my budget on the card with the highest interest rate while keeping the other two current with minimum payments.


Your solution: You may have more than one card charging high interest. You can contact a nonprofit credit counseling agency to see if you qualify for a Debt Management Plan. It can consolidate your credit cards into one payment at a lower interest rate.

Auto loans

My problem: I owed $8,000 on my 2015 Toyota Corolla. I had been making the minimum $317 payment set up by the bank that financed my loan. It was charging me 2.9 percent interest.


My solution: After I paid off my credit card debt, I had an extra $300 in my monthly budget. I took that money and added it to my regular car payment. Some months I was able to pay $900 toward my car, which was almost three times the minimum amount.


Your solution: You can refinance your auto loan or downgrade the vehicle you drive. The average interest rate on a 60-month car loan is currently 5.08 percent. If you have bad credit (614 or lower FICO score) it could be 14 percent or more. Only a portion of your car payment goes to the loan. Higher interest rates just mean a car is more expensive.

Tax debt

My problem: I worked as a freelance writer for a year before getting hired in a full-time position. Therefore, I was responsible for paying my taxes. I’d been advised to set aside 25 percent – 30 percent of my income to pay the IRS every quarter of the year. But I procrastinated and owed $3,000 when tax season rolled around.


My solution: My wife and I got married in February 2019, and our parents covered the ceremony costs. We were gifted $8,000 and didn’t take our honeymoon. So when April came around, I had money on hand to pay the IRS. Other couples go on a vacation of a lifetime. We paid off Uncle Sam.


Your solution: You can contact a tax resolution services company. It can set you up with a free consultation with a tax analysis. With help from a tax expert, you can settle your debt for less than you owe.

Student loans

My problem: I owed $5,500 in student loans, which were direct subsidized loans. That means I wasn’t charged interest until six months after graduation. When I was, my loans charged me 2.9 percent.


My solution: My car and credit cards were paid off. That freed up more than $600 in my monthly budget. By this point, I had a full-time job and started focusing on my student loan bill. I sacrificed eating out during the week and going out on most weekends. Most of my bi-weekly paychecks went to my student loan bill.


Your solution: You can refinance your student loans for a smaller interest rate. But this really depends on the student loans you borrowed. The government won’t allow you to refinance federal student loans. But then again, you may have those forgiven soon.

In the meantime, you could convert your federal loans to private. Then, shop around for lenders. Use a consolidation loan to combine all student loans you have into one payment with the lowest possible interest charge.


Now that I’m debt-free, I feel like a huge weight has been lifted from my chest. It’s easier to sleep at night and not sweat the small stuff.


Knowing I can save and invest in my future makes me feel confident about what’s ahead in life. My hope is that my story can inspire others to take charge of their finances and get out of debt.


This article originally appeared on and was syndicated by

More from MediaFeed:

7 debt consolidation myths you shouldn’t believe


In the right circumstances, debt consolidation can help get debt under control. But there are entities that offer the promise of debt consolidation yet don’t deliver — and even charge illegal fees in the process. Understand the following debt consolidation myths, and the pros and cons of the process, before pursuing it.




There are many types of debt consolidation. A debt consolidation loan, for instance, is a personal loan that can be used to pay off multiple kinds of high-interest debt, such as credit cards and payday loans.

But it can’t be used to pay off federal student loans. There’s a separate process for that, called federal student loan consolidation. This option won’t reduce your interest rate, but it can give you more time to pay off your loans or qualify you for additional reduced-payment programs.

You can also consolidate credit card debt on its own using a balance transfer credit card, which moves high-interest debt across multiple cards to a single one. You’ll have as long as 21 months, depending on the card for which you qualify, to pay off the debt interest-free.




Like other types of financial products, the higher your credit score, the more favorable terms you’ll get on debt consolidation loans and balance transfer credit cards.

But you can qualify for a debt consolidation loan with good, fair or even poor credit. Visit your local bank or credit union to check the options available there first. You may qualify for a lower interest rate if you have a long-standing relationship with the institution.




If you qualify, you could get a balance transfer credit card with no transfer fees and no interest charges during the introductory period. Paying off your debt during that time means consolidating your debt fee-free.

But some cards do come with a balance transfer fee; consolidation loans may also have origination fees. Take these into account when considering whether to consolidate your debt or choose a different option, such as negotiating with your creditors yourself to lower interest rates.

Use caution if you interact with a company that charges to consolidate debt for you. Some companies charge fees to consolidate student loans, for instance, which is free to do directly through the government at The Federal Trade Commission (FTC) maintains a list of companies that it has banned from offering debt relief services.

It is illegal to charge a fee by phone before issuing a loan, according to the FTC. Familiarize yourself with the signs of an advance-fee loan scam.




On the other hand, there are legitimate types of debt relief that may cost money.

Though not specifically a type of debt consolidation, debt management plans require working with a nonprofit credit counseling agency to simplify payments and potentially pay less on interest. You’ll make one payment to the credit counseling agency each month, which will then pay your creditors on your behalf. You’ll be charged a monthly fee and potentially an enrollment fee.

But you may find these fees are worthwhile to address your debt with the help of a reputable professional. A debt management plan requires making payments regularly and on time for the full length of the plan, which could take up to five years.




Opening new accounts, such as a credit card or loan, may lead to a small drop in your credit score. An inquiry for a new credit card generally takes fewer than five points off a FICO Score, according to FICO. But opening multiple new accounts over a period will more dramatically affect your score.

Research your options in advance so that you apply for a balance transfer card or debt consolidation loan for which you’re likely to qualify. Once you get it, make payments on time, every time. Payment history accounts for the largest share of your credit score — 35%, according to FICO.




You may not have to apply for a new credit card or loan to get out from under your debt. Alternatives to debt consolidation include working directly with your creditors, who may be willing to lower your interest rate, waive late fees or give you a new monthly payment. You could also choose a debt management plan, which doesn’t require you to open a new line of credit.

If you can pay extra toward the debt, you can opt to pay off the smallest loan balance first, then put the equivalent of that monthly payment toward the next-smallest balance. This is the debt snowball method, and can help you gather wins on your way to debt freedom. Or you can pay the highest-interest loan first, called debt avalanche, which will save more money in the long run.




While debt consolidation can help you feel less overwhelmed in the short term, ending a reliance on credit cards — and preventing future debt — is a separate, and necessary, process.

Once you’ve chosen a debt consolidation method, audit your expenses and make a spending plan. Cancel subscriptions you no longer use and identify areas that need a closer look, such as how much you spend on meals out. You don’t need a complete overhaul of your budget, but a few key changes — such as cutting back on food delivery or reducing subscription services — can help you avoid creating more debt.




Debt consolidation is a smart move when you qualify for a balance transfer credit card or loan that will lead to interest savings, as well as when you make payments on time for the duration.

Pause making purchases on the accounts you’re paying down. If you get a balance transfer credit card, make sure you fully pay off the debt during the card’s interest-free period. Divide your total debt by the number of months with the 0% interest rate and commit to sending that amount to the card each month.




While debt consolidation myths abound, researching your options and relying on reputable sources of professional guidance will help you land on a strong strategy. Deciding to pay off debt is half the battle. The next step is to choose a debt consolidation method that will give you the best chance of success.


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This article originally appeared on and was syndicated by




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