Steps We Took To Pay Off $95k of Debt in Three Years

$95k in debt gone in three years.

To be honest, one of the reasons why my husband and I moved to Albuquerque over 10 years ago was because it was rated the #4 place to live to get ahead financially in the US.

We moved down here with $95k in debt from our two cars and student loans. And we decided to tackle this before we had kids because I wanted to stay home.

We paid it down in three years. And no, we didn’t do Dave Ramsey, but looking back we did use some of his principles.

Here are the steps we took to get out of debt:

1. Make a spreadsheet of all your debts and bills. Do not include your home. List what you pay monthly for that specific bill and the total remaining balance you owe. We did NOT put down any interest rates. Then categorize your bills by the remaining balance, smallest to largest.
2. Put down other expenses. Budget money for groceries, spending money, and eating out.
3. List all of your income that is stable. My husband and I were both working 9-5 jobs at the time so we put both of ours down. Now that I am a photographer and my income varies, I would average what I bring home monthly (and low-ball this).
4. Add up all of your monthly expenses. Add up all of your income.
5. Take 60% of what is leftover and round it to the nearest $100.
6. That amount above (the 60% leftover) should be going to your SMALLEST bill amount. It doesn’t matter the interest rate.
7. Paying off your smallest first will free up that payment. Then you will roll that payment into your next largest bill. Do that until all of your debt is paid off.

We paid off our last bill the week before my daughter was born, and I cannot explain the financial freedom that gave us. I want others to feel the same. The only bills we had were the ones that we needed to be up and running every day.

Since then we have upgraded cars, but now we see it as a tackle-fast item because we have done it before. It has set us up to think of debt differently.

I would love to answer any questions that you have about paying off debt.

Originally published August 2020.

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