Living With Debt

How We Lowered Our Living Costs To Pay Off $20,000 Of Debt In 1 Year

By | Thursday, April 18, 2019

My husband and I have known each other since we were kids (he was actually at my parents’ wedding before I was even born), so we took the leap faster than most. We dated for only about six months before getting engaged, and we got married only three months after that. Of course I don’t regret a single thing, but there are a few things I would do differently.

I lived in Utah and he lived in Oregon (in our hometown) when we started dating. Within two months, he moved to Utah, and we got our first apartment together. It took about a year for him to find a solid job at a great company and, while he worked a few odd jobs along the way, it was hard for us to live solely on my income — particularly while trying to plan our wedding. We got married in September 2017, and by March 2018, we had racked up $10,000 in credit card debt.

Before we moved in together, I had been working on paying down my student loan debt (which was down to about $11,000). And while the saying “but it’s the good kind of debt” gets thrown around a lot, the reality was that we were newly married and $20,000 in debt. Now, my husband is the kind of person who doesn’t really get stressed about anything. He lives a very carefree life knowing that things will all work out in the end. And I love that about him. He balances out my anxious and stressed-out nature well, but I knew that this wasn’t going to work itself out without some hard work and planning.

The first thing I did was make a budget. I figured out our basic monthly living expenses (rent, utilities, other bills, food, gas) and figured out where we could cut those expenses the most: rent and food. We found a new apartment about a mile away from my husband’s work that was not only cheaper, but it was also bigger. We went from paying $1,100 a month in rent to $850 a month. Next, we tackled the food situation. We spent a horrifying amount of money going out to eat in 2017, but sadly it was probably still below average. We decided to try and go cold turkey on eating out, except when traveling. We cut our grocery budget to $500 a month, and also decided to give up $5 Starbucks coffees.

I reviewed the budget monthly, and the goal was to only spend what we needed to cover our basic living expenses and hold off on buying anything else unless it was absolutely necessary. For each paycheck, we took out the money we needed for basic expenses and put the rest of the money toward a debt payment, leaving a small amount of money in the checking account (usually $200) as a buffer. We get paid four times a month, so this worked for us. At the time, our combined income was less than $5,000 a month, so we were definitely not rolling in the dough. We lived as frugally as we could while still enjoying our lives. We could have been more frugal and paid off the debt a few months earlier, but the goal was to pay it off in one year, and we accomplished that.

Our debt-payoff journey

If I could summarize our journey into five key pieces of advice, this is what I would say to anyone who wants to buckle down and pay off their debt:

1. Make a budget.

You cannot pay off your debt if you have no idea how much you spend per month, how much is left, and where that extra money is going. If you hate budgeting, there are plenty of resources out there to help you. A favorite of mine is YNAB (You Need A Budget).

2. Freeze your credit card.

Not literally (well, you can if you want — people do that). Stop using your credit card for any purchases. Only use real money or your debit card. This will curb overspending and make it easier for you to see your progress as you pay down your credit card.

3 Consolidate.

We had multiple bank accounts and two credit cards at the beginning of our debt-payoff journey. Now we have one bank account and one credit card. It’s much easier for us to manage, and there’s really no need for us to have multiple credit cards. [Editor’s note: Many finance experts recommend never canceling your credit cards, as it has the potential to hurt your score. Read more here.]

4. Cut out the things you can live without.

For us, finding a cheaper apartment and cutting out fast food/dining out made the most sense. Maybe you love your $5 Starbucks but could do without your monthly gym membership for a year. Don’t restrict yourself from what makes you happy. Cut out the things that make sense for you.

5. Track and celebrate milestones.

I used to track my debt payoff, and each time we hit a milestone, we did something to celebrate. Whether it was getting a $5 pizza instead of my husband cooking dinner, going to see a movie, or posting on social media to let our friends know, we celebrated each step toward a debt-free life. It felt so good each time we got a little bit closer.


Above all, the best advice I have for paying off debt is to stay motivated. Figure out what motivates you and keep that in your line of sight at all times. For me, it was hitting those milestones. I made a chart and taped it to our fridge and would color it in each time we made a payment. We set a payoff date for each credit card and student loan. When we paid something off completely, it felt like this huge weight had fallen off our shoulders. I loved that feeling, and it propelled me forward to the next goal, and the next, and the next.

We were not perfect by any means. During this time, we were also trying to eat healthier, and we spent money on healthy food instead of the cheapest possible options. My husband cracked a few times and bought a Pumpkin Spice Latte or two. We still went on a few vacations. We went on our annual deer hunting trip with my dad, we took my parents to Moab, and we came home to Oregon for the holidays. We even rented a beach house with my family for Thanksgiving! And of course, I felt I had to buy everyone Christmas presents, even though I said I wasn’t buying anyone anything. It brings me joy to buy gifts for my family members — especially my mom — and it was worth it.

Other lifestyle changes that helped us pay off debt faster

For anyone looking for extra ways to pay off debt, we did a few other things that helped us meet our goal: We sold my husband’s truck for $900 and have been sharing a car since then. I know this is not feasible for everyone, but it is much easier than you think if you can make it work with your work schedules. We returned a couch that we had bought with our tax return — it was way too big for our living room and also much more than we should have spent to begin with — and got a $1,500 refund. In September, I got a new job and the increase in salary gave us the boost we needed to make some larger payments over the holidays, while still having enough money left over to relax and enjoy ourselves.

We started this journey in March 2018, paid off our credit cards by October 2018, and made the very last student loan payment on March 5th, 2019. The credit cards were more difficult for me, mentally, because there were two large balances (about $5,000 on each card). The student loans were easier; there were four of them with varying balances ($4,000, $3,000, $2,500, $1,300). We chose the lowest-balance-first method, but we paid off the credit cards before the student loans because the interest rates were so much higher. There are so many different debt-payoff methods, but the best method is the one that motivates you the most.

Making this goal to be debt-free in a year — and accomplishing it — was such a great experience for us to go through as newlyweds. We learned about each other’s spending habits, our history with money, and ultimately how to manage our money in a way that works with us. Experiencing the stress that comes with debt has made me realize that I never want to be in that position again. Our way of life promotes being in debt as the standard. Everyone is in debt. You have to go into debt to by a house, a car, even a phone! But since making that last debt payment, we have put $3,000 in our savings and plan to continue with an aggressive savings plan for the rest of the year. I know that being $20,000 in debt isn’t even that bad, but I think that once you’ve hit five figures, it’s all the same: you’re in trouble. I really believe that, no matter what the situation is or how much debt you’re in, you can get out of it. It takes time, hard work, sacrificing (for a little while), and motivation, but it is doable.

One thing we didn’t do that I wish we would have done is put $1,000 in savings for emergencies. We did this in January, and even for just that last two months, it brought me so much peace of mind to know that we had some money saved and wouldn’t have to resort to our credit card if something happened.

I encourage you, wherever you are in your financial journey, to start taking your debt seriously. I think we should all decide to go against the norm and live a debt-free life. Life should be more than a paycheck-to-paycheck cycle. Relationships shouldn’t be weighed down by arguments about money. Treat yo’self moments shouldn’t be followed by guilt and stress. Let’s make financial freedom the new standard of living.

Sami Hertel is an Oregon native currently living in Utah with her husband, Kevin. Her blog, Life After Oregon, narrates her adventures since leaving her hometown. She loves road trips, family vacations, reading a good book in one sitting, and watching her husband cook dinner. You can follow her on Instagram @lifeafteroregon.

Image via Unsplash

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