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How I Paid Off $20,000 of Debt and Quit My Job In 7 Months

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Today’s post is from writer and commenter here on BFS, Kate (Mrs. COD).  She is passionate about helping people make smarter decisions with money in order to be able to spend money on what really matters to them. Thanks to slaying her debt demons, she’s now able to stay at home raising her two rambunctious little boys. Kate blogs about lifelong habit changes and “finangelism” at Changing Our Default, which she started early in 2016.

Debt Payoff Story | Quit My Job | Financial Makeover

Part One:  Getting Into Debt

If you’ve ever tuned in to a Dave Ramsey radio show, you know how often he disparages a normal life. “Normal” to him means putting spontaneous purchases on a credit card, taking out enormous student loans, buying cars you can’t afford, and rationalizing every single stupid financial decision you make day after day.

Let’s put the cards out on the table: I used to be that kind of normal.

I went to the fancy private college and took out fancy private student loans. I didn’t rush to pay them back once my degree was finished either. My expected term of repayment was 20 years!  I cringe just thinking about it!

My brother actually gave me his old car (no strings attached!) when I graduated from college, but I only drove it for a few years. Instead of enjoying that as long as possible, I gave it up to take on a silly car payment.

Then, in the grand finale of financial stupidity, I fell prey to what I call the Timeshare Trap. You’re all familiar with it, of course. The timeshare is a tricky means of getting people to buy vacations they’ll never use, with a sneaky added “maintenance” fee every single year, which is subject to increase. Yikes!

I honestly can’t believe my husband and I fell for it. We were adamantly opposed to buying a timeshare when we walked into the sales presentation, yet somehow, two hours later, we were on the hook for thousands of dollars. Ugh.

Besides the college, car, and timeshare blunders, I simply wasn’t mindful of my spending and saving. I could have been considered frugal compared to many, but I also splurged on a lot of random clothing, books, and other stuff I didn’t need. No specific savings goals were driving my decisions, so I made some foolish ones.

Part Two:  My Debt Payoff Story and Timeline

When my husband and I got married in 2010, we were saddled with loads of debt, but it didn’t register as much of a blip in our minds. We both still carried student loan debts, and I was gathering even more student loans for a master’s degree. A couple of years later, we stepped into the Timeshare Trap. By 2015, I still owed $6K in student loans and our timeshare balance was over $14K.

Finally, that summer, our perspectives did a 180. My husband started researching better ways to save and invest. He’d just completed his doctorate and didn’t want to waste his automatic pay increase. In his searching, he stumbled across personal finance bloggers like Mr. Money Mustache. That led to us discovering a whole network of FIRE (Financial Independence, Retire Early) bloggers, and we wanted in.

Something resonated with us all of a sudden. We crunched the numbers, made some default changes, and realized that we could do things we’d never dreamed possible. Choose different careers, pay off our house early, even retire long before we’d originally planned!

After that summer, we put our debt freedom journey into overdrive. But instead of taking on side hustles to make money (another great way to do this), our first step was to find the money we already had in our possession and throw it at the debt. We wanted our debts (and the pesky monthly payments) GONE for good.

  • Since I’ve always kept more than a sufficient cushion sitting in my checking account, I withdrew several thousand dollars from there and used it towards my student loans.
  • We also inspected our savings accounts and took them down to lower balances, still leaving a decent emergency fund in place. That went towards our timeshare.
  • We cashed out both of our whole-life insurance policies (but not before ensuring we had new, cheaper, term life insurance in place). My husband’s policy had around $3,000 in it, while mine was worth nearly $10,000. Those were some awesome checks to receive and put directly towards the balances, finishing off my student loans as well as the timeshare principal.
  • We committed to living and spending more mindfully, since the last thing we wanted was to rack up more debt! We ate out less, slashed our grocery budget, and cut back on a lot of our everyday expenses.
  • If we had needed more, we could have taken on a side hustle or two.

All told, we paid off about $20,000 in a seven-month period!

Part Three:  Quitting My Job

Here’s where all this debt payoff led for me and my family: I’m now a stay-at-home mom to our two kiddos. A teacher for fourteen years, I’d never imagined being able to afford life on my husband’s income alone.

It was amazing to realize that once we’d paid off our big debts, that freed up nearly $1200 every single month!  This was after both cars were paid for too. My student loans had totaled $300/month, the timeshare was nearly $400 a month (plus we’d paid double for a year to pay it off quickly), and the whole-life policies had cost us $70 more monthly than our new term policies.

Doing the math revealed to us that we really could handle going down to one income, thanks to the decrease in mandatory monthly payments and no longer needing to pay for childcare. But even if we hadn’t chosen my leaving the workforce, we’d still be continuing to live as frugally as we can and save like crazy for the future.

Once you’ve started managing your money better, it becomes easier to hold onto it. Being saddled with debt may be “normal” in our society, but it is no way to live. There’s a freedom to be found in staying out of debt.

Part Four:  Getting YOU Out of Debt (Because Your Debt is an Emergency)

If you’re struggling with debt, don’t despair. It may not be easy, but these tips can help.

  • Look for money you might already have. Do you have excessive amounts in checking or savings? Pinpoint a more reasonable emergency fund amount and put the rest towards your debt.
  • Fix mistakes. For us, that meant getting rid of bad products (the time share and whole-life insurance) and using the money we received back to decrease our debt.  
  • Cut back on your spending. Some expenses are fixed, but get creative and see what you could do without. We did a bunch of budget-trimming before we even started this process. Could you find a cheaper cell phone plan, quit eating fast food, have a cheaper wedding, stop buying gifts for everyone in your family, go on cheaper or free dates, and/or buy groceries at a discount store? What “wants” can you cut out or decrease spending to pay off your “needs”?
  • Sell items you don’t use. Garage sales can earn some cash to throw at debt. Driving a new car you can’t afford? Sell it, buy a beater, and use the difference to pay off debt.
  • Take on side hustles to make extra money. What skills do you have? Use them to earn money. Tutoring, babysitting, blogging, pet-sitting, freelance writing or proofreading, and housecleaning are just a handful of options available these days.

Debt doesn’t have to be a lifestyle. You can get focused, use your resources, build a side hustle, and get serious about paying off your debts. Who knows what could be possible once you’ve experienced debt freedom?



FYI:  I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year.  I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home.  If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!).  Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!
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4 thoughts on “How I Paid Off $20,000 of Debt and Quit My Job In 7 Months

  1. “Once you’ve started managing your money better, it becomes easier to hold onto it”, such a great statement! We have really put a stop on spending and I don’t miss 90 percent of what we have cut back on. Great article!




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  2. I didn’t know where else to post this, but your site may have been hacked. I had about 10 new spammy, music related posts from your feed. They were all posted by Live4ever.




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  3. @Amber, thank you for the heads up. My tech guy did some tech magic and everything seems to be back to normal. Please email me any time at budgetingfunstuff *at* gmail.com if you ever have any issues again! Thank you again!




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