How I Paid Off $50k of Debt in 3 Years

Here’s a financial confession: I used to be in debt. I was a financial planner and I was in debt – and I lied to everyone about it. If you’ve ever been in debt you know how stressful it can be and how it can take over every other aspect of your life – including your relationship and your health.

I was ashamed that I let my financial situation get so out of control at such a young age (I was only 27) that I lied about it. To everyone. But that’s all in the past. Now I’m 36 years old (as of last Sunday), I paid off my debt and I now live completely debt free.

Being in debt is only a temporary situation – if you let it be. If you’re in debt I have two pieces of advice: 1. Don’t ignore it and 2. Start paying it off today.

Here’s how I paid off my debt, and you can too:

Find a new source of income

This was the single best thing I did to get my debt paid off. I had a good bank job as a financial planner, but the income wasn’t enough to live and make more than the minimum monthly payments on my credit cards, line of credit and car loan. I got a second job working nights and weekends in a retail clothing store. Where? Ssshhh it’s a secret. ß See what I did there.

I took all the extra income from my second job and put it towards paying off my debt. As I saw the balances get paid off I was motivated to do it faster so I got a third job working as a freelance personal finance writer.  This turned out to be the best career move I ever made – and it all came from being in debt.

Pay off the smallest balances first

I know some experts will tell you to pay off the balances with the highest interest rates first, but that’s not how I did it. I paid off the smallest balances first because seeing a $0 balance gave me motivation to keep going. Once I no longer had those payments I allocated the money towards other outstanding balances. That helped the remaining balances get paid off faster with bigger monthly payments.

Negotiate your interest rates

You may be surprised to learn that if you’re in dire straits (and explain your financial woes), lenders may be willing to negotiate the current interest rate on your loans and credit cards. It’s hard to pay off a large credit card balance with a 19% interest rate.

Lenders will negotiate because getting a lower interest rate is better than getting nothing back at all. If you default and the debt is written off the lender gets nothing, so it’s definitely in their best interest to help you set up a payment plan and negotiate the interest rate.

Cut out every unnecessary expense

This was the hardest part of being in debt because it meant admitting defeat. I made some major lifestyle changes that included selling my car and moving to a cheaper apartment in a not-so-great part of town. These changes made my financial mess a reality and that was hard to deal with. However, I did it and thanks to this decision I am now debt free. Trust me when I say I’m never going back.

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2 thoughts on “How I Paid Off $50k of Debt in 3 Years

  • Really interesting post and it is so true, I had a little debt in 2012 and i’ve started to undestood the importance of budget, emercengy fund, savings and in that period I’ve lost my regoular job so I used my side hustles 8working in the cafe during weekends, dog sitting, baby sitting) to save and payoff debt, well now that I’m debt free i noticed I changed a lot about my spending and in this period I’m really really focused on savings for important financial goals, maybe if I am not been in debt now I’d still living check by check without thinking to future

  • Hi Giulia,
    I completely agree. As we get older and our lives get more involved understanding the importance of good financial habits becomes very significant. I don’t regret my debt, but I wouldn’t want to go through it again – that’s for sure.

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