A little over a decade ago, I married my dream girl. She was funny, beautiful, and chock-full of 90's TV trivia. Our first couple of dates consisted of a lot of Saved by the Bell and Seinfeld jokes.

Outside of knowing the Soup Nazi episode verbatim, Nicole and I both came into the marriage knowing the general basics of personal finance. You know, advice like:

• “Don't carry a credit card balance”
• “Always have some savings for a rainy day”
• “Good debt is okay to have”

In the years before our marriage, we did rack up a hefty amount of “good” debt. Car payments and student loans were a few of the good debt offenders we carried into our marriage. Hey, you NEED a car to get around, right?! And how else are you going to pay for college?! 

After some research and personal soul-searching, there really was no good debt or bad debt in our eyes. It was just debt to us. This was all just money we owed someone. It wouldn’t go away until we decided to clean it up.

We decided that being in debt was not something we wanted for our new family. We vowed to become debt-free (outside of our mortgage) before our first child was born.

In September of 2010, we owed $20,908 on my wife’s car and $27,124 on my student loans for a total of $48,032 in debt. During the next 12 months, we took that $48,032 of debt and clobbered it!

By September 2011, we owed $0. Zilch. Nada. Bye-bye debt.

Here are the 5 steps we took to become debt-free for life:

1. Develop a Monthly Budget

We developed a monthly written budget that defined our way forward. We knew we had to reduce our expenses and increase our debt payments. The written budget guided us to ensure we would stay the course.

For budgeting, we used a simple spreadsheet. It wasn't too fancy. We just listed out our income and our expenses and made sure we allocated each of our dollars to an assignment. 

As the years passed, we decided to upgrade to Monarch Money. This online budgeting tool gave us more flexibility and made the monthly budgeting process a lot quicker through its ability to link up to your bank and credit card accounts. 

A good old-fashioned pencil and paper will even do! Just make sure you have a budget and stick to it.

2. Choose Your Debt Elimination Strategy

There are multiple debt elimination strategies to consider. Choose the one that works best for you and your situation.

Debt Snowball

How does it work?

• Take your debts and line them up from the smallest amount owed to the largest amount owed
• Pay the smallest off first by making extra payments each month
• Given that you’ll now have less interest to pay with one of your eliminated debts, take that extra amount of money and start paying down the principal on the next debt
• The process continues with your payments growing larger like a snowball down a hill

Debt Snowball Example:

• You have $2,000 in credit card debt, $500 in medical debt, $25,000 in a HELOC
• Pay off the medical debt first, then the credit card, then the HELOC

Why the Debt Snowball works:

• By getting some quick wins in paying off your smallest debt first, you’ll feel motivated to keep going!
• If you started with the $25,000 HELOC, you could be at it for quite a while and become uninspired to continue paying off your debt

Debt Avalanche

How does it work?

• Take your debts and line them up from largest interest rate to smallest interest rate
• Pay off the debt with the largest interest rate first by making extra payments each month
• The process continues similar to the debt snowball

Debt Avalanche Example:

• Credit card debt (20% interest), medical debt (4% interest), HELOC (6%)
• Pay off credit card debt first, then HELOC, then medical debt

Why the Debt Avalanche works:

• Mathematically, this helps you pay off the most financially draining debts that you have and will (in theory) help you save the most money.

There are benefits to both the Debt Avalanche and the Debt Snowball. To dive deeper, check out our Debt Snowball vs. Avalanche breakdown.

Other Debt Elimination Options

Hybrid Model

You can also look at using a Hybrid Model of the debt snowball and avalanche approaches where you pay off the debt with the largest interest percentage first, and then get some quick wins on the debt with the smallest balance.

Debt lasso

This method was made famous by John and David Auten-Schneider after they paid off $51,000 in credit card debt. The main goal here is to tackle your high-interest-rate credit cards by lumping your debt into one low-interest loan. This can be done through a 0% interest credit card.

You'll need to be careful with this one. Make sure you're committing to paying all of your debt off before the 0% interest term expires. Otherwise, you are going to be back where you started and probably worse off!

Debt Hatred

Or simply just choose the debt that you HATE the most and smash that one first!

We chose the Debt Avalanche method because our student loan and car debt amounts were nearly similar. The student loan had an interest rate of 6.8% so we decided to blow that one up as soon as possible and then tackle the car loan.

3. Increase Your Income

Outside of spending less money, another great way to eliminate your debt fast is to make more money!

Before we decided to go crazy on our debt, I received a promotion to a sales position that allowed me to make a commission when I brought in new business. At that time I was making around $70,000 per year without commissions. When Nicole and I decided to rid ourselves of our debt, let’s just say, I became highly motivated to sell … a lot.

I expanded our portfolio with a major client and doubled our business in 2011. Our business grew, my team grew and so did my commission checks. I ended 2011 with just over $100,000 in total income!

With that additional income, we did not adjust our lifestyle and buy new clothes, fancy dinners, and jewelry. We took the extra money we received each month and slowly but surely paid down our debt using the Debt Avalanche.

Now you may not be in a sales job like I was, but increasing your income is completely in your hands. It just takes extra effort.

10 Ideas to Increase Your Income

Here are 10 ideas for increasing your income immediately. I’ve done 5 of these personally:

1. Detail the value you bring to your company and ask for a salary increase
2. Sell household items you don’t use anymore on Facebook Marketplace
3. Become an Uber or Lyft driver in your downtime
4. Airbnb a room at your house
5. Get a roommate and charge a monthly rent
6. Use your skills to create something and sell it online (Etsy, etc).
7. Help people with everyday tasks through services like TaskRabbit
8. Become a freelance writer or start a blog
9. Sell unused gift cards
10. Start a weekend dog-sitting service through Rover

Related Article: 35 Side Hustles for Stay-at-Home Moms and Dads

4. Stick To The Plan

It is incredibly easy to stray away from your budget and your debt-elimination strategy. There are always shiny objects that will distract you and take you off course.

Although I consider myself a frugal and disciplined guy, I had a tough time not spending the extra commission dollars I was receiving at my job. I’m human, right?

To help me stay on track, my wife and I would remind ourselves that being debt-free before our first child came into the world would set our family on a course for financial success that would last our entire lives.

That reason for pushing hard (my “Why”) gave me the motivation to stick to the plan. I kept thinking about how satisfying it would feel to rid ourselves completely of this debt.

5. Celebrate The Wins

We’re not robots. Live a little! When you pay off one of your debts, celebrate!! Go out to dinner. Pop some champagne. Share the news with family and friends. This is a big deal.

This encouragement will motivate you to keep charging down the path toward complete family wealth and happiness.

Nicole and I celebrated each debt-crushing milestone together and it made our new marriage that much stronger. We were partnering together on something so important for our future and we were winning.

That year of debt destruction allowed us to have Nicole leave her job and stay home to raise our kids. You can't put a price tag on the bond she developed with Zoey and Calvin during the first years of their lives.

Fast forward to today, we've kept up our debt elimination plans and paid off the mortgage on our $500,000 home in less than 5 years. Additionally, we saved and invested over $500,000 by age 40 and hit Coast FIRE!

With no debt, no mortgage and no need to invest for our retirement anymore, this allowed my wife and I to choose the work we want to do instead of the work we have to do. 

We’re creating a financial future for our two children that we would never have imagined possible. And to think, it all started with taking that first step in making the conscious decision to eliminate our debt once and for all. Now we have the freedom to live the lives we’ve always wanted.

What does a debt free life look like for you? Are you working on paying down your debt?

Please let us know in the comments below.