- When I told my husband I thought we should sell our house and move to a cheaper apartment to clear the debt, he suggested some alternatives that would allow us to pay down the debt over time and keep our home.
- We took a scalpel to our budget, cutting out any extra spending, refinanced our mortgage , and lived off of my husband's income while putting mine towards our debt.
- In four months, we paid off $26,000 of our $28,000 of debt.
- Read more personal finance coverage .
One of my most frustrating personality traits is a tendency to not deal with things that make me uncomfortable. That's why I've overdrafted my checking account more times than I want to share and why it took me so long to create a will with my husband .
It's also part of the reason my credit card debt snowballed into nearly $30,000 in a few short years.
Of course, there are other factors contributing to how my husband and I ended up with so much credit card debt. When I quit my office job to stay at home with my kids, it was easy to stick with our two-income lifestyle of eating out several nights a week and taking last-minute trips out of town.
On top of unwise spending and lack of budgeting, we also took some unforeseen hits financially. We moved halfway across the country to California and then back to our home state of Minnesota after I experienced some unexpected medical problems. The move and hospital bills ended up costing nearly $10,000. We put almost all of it on a credit card.
Over the course of five years, we've had five credit cards and racked up a total of $28,000 in debt. The number was paralyzing for me, evidence of how much I'd messed up and how little progress we had made in our financial well-being.
How we paid off our debt
In addition to avoiding things that make me feel uncomfortable, I also have a tendency to be pretty black-and-white. When I realized how far behind our financial goals we were, I sat my husband down and told him we should sell our house and move to a small apartment to save money. He quickly reminded me that while it's important to refocus our efforts on mitigating our debt, there probably wouldn't be a quick fix for it.
Instead of focusing on immediate, drastic fixes, we adjusted our lifestyle , strategizing ways to trim down our living expenses while increasing our income.
Line by line, we cut out anything we didn't absolutely need. I canceled our Spotify Premium, Hulu, and YMCA memberships. We drove less to save on gas money. We cooked what we had in our cabinet instead of eating out, and we made coffee instead of going to Starbucks a few times a week. All those sacrifices seem simple, but they added up quickly.
Other factors also helped decrease our monthly spending. Around that time, my son started kindergarten, which saved us around $500 on daycare expenses. We also re-financed our mortgage , saving a few hundred dollars a month on our house payment.
On top of spending less, I also worked really hard to make more money as a freelancer. One of the toughest things about freelance writing is not knowing how much money you're going to make each month. That's why anchor clients, publications I write for regularly, were so important during our debt-slaying season.
Instead of writing for more prestigious publications that paid less, I focused on ongoing relationships with clients that paid me a higher rate. I continually aimed to deliver impressive work so they'd keep assigning me articles, and it worked. When I was working really hard at making extra money, I earned between $10,000 and $13,000 each month.
From August to November 2019, we used my husband's income to pay our bills, and the rest went toward our credit cards.
Realistically, it probably didn't have to take a full four months to pay down the debt. But because I was working more, we paid more for childcare during those months, and we also had some unforeseen car problems we had to pay for. I also used a bit of our extra money for a new couch and dining table.
Other than those things (and, honestly, a few Happy Hours and nice dinners), all the money I earned from writing went toward our credit cards.
This experience changed the way I think about money
It's been four months, and we've managed to pay off $26,000, which leaves us around $2,000 to pay off (spread across two credit cards). Our plan is to finish it off with money we get from relatives on Christmas.
Once our credit card debt is down to zero, we'll each keep a credit card account open and use them for emergencies (or pay them off each month so they don't accumulate interest). Then, we'll sit down with a financial adviser and come up with a game plan for attacking our student loan debt and building up our savings .
How we got here isn't something I'm necessarily proud of, but I am proud of my husband and myself for finally hunkering down on our finances.
It took a bit of sacrifice and grit to make it happen, but I've learned an important lesson, one I intend to pass down to my two sons: It's better to live inside your financial means for a while, even if it's not fun, so you can expand your means later on. If you don't, you'll be paying for it for a while.
- More personal finance coverage
- 4 reasons to open a high-yield savings account while interest rates are down
- It took less than 10 minutes to open a high-yield cash account with Wealthfront and earn more on my savings
- How to buy a house with no money down
- When to save money in high-yield savings
- Best rewards credit cards
- 7 reasons you may need life insurance, even if you think you don't
- 7 things to do with your money that will put you light-years ahead of your friends
- Having a baby forced me to confront my mortality, but spending $6.50 a month on life insurance means I don't lose sleep over it
- We broke down the differences between credit card points and frequent flyer miles here's why you should be collecting both