I Broke All the Rules to Pay Down My Debts

I never even made a budget — but it worked anyway.

Photo by Avery Evans on Unsplash

Several years ago, I was swimming in debt. Between student loans from my graduate degree, credit cards, and housing costs, I was stuck in a pattern that had started in college, where I was spending most of my salary paying off debt, leaving me no money for emergencies. Or anything fun.

When something unexpected came up, I felt forced to charge against my credit cards again, ramping the balances back up and renewing the cycle. Pretty soon, it was all I could do to pay the minimum on my cards.

I read a lot of books and articles about how to get out of debt. They all offered similar advice:

  • First, pay off your highest interest cards; put every extra dollar into paying off the highest interest card.
  • Cancel your cable and your gym membership
  • Get another job or a second job.
  • Sell some of your belongings.
  • Don’t eat out or do anything fun that costs money.
  • Put 20% of your salary into a “rainy day” fund.

This all seemed completely unrealistic to me. I didn’t want to live a life completely free of fun for the sake of paying off debts, so I created my own plan to become debt-free.

It took five years, but eventually, I got to a place where my only debt was my mortgage, and I built a nest egg for emergencies. If I can do it, you can too. Here’s what I did to get ahead:

  1. I Wrote It All Down

I gathered up all my miscellaneous bills and took stock of what I was dealing with. I got a notebook just for my bills (I’m old school; you could also do this in Excel or in whatever system works best for you), and I wrote down the bill, the day of the month it was typically due, what the minimum payment was, and what the total balance was.

Then I separated it into two sections: one section was the bills that were the same every month (like the mortgage and cable), and the second section was bills that fluctuated.

It was hard and depressing, realizing how many bills I was paying, but seeing it all on paper helped me get a clear picture of how bad it was, which actually helped me to manage the feeling of being overwhelmed. Information is power.

2. I Assigned Each Bill to a Paycheck

I never made a budget, but I did some scheduling instead. Once I had my list, I slotted each bill into a paycheck. At the time, I was paid on the 15th and the last day of the month. If a bill was due on the 10th, I would “assign” it to the paycheck I received on the last day of the month. If the bill was due on the 29th, I assigned it to the paycheck on the 15th.

Then I looked to see how much would be leftover from my paycheck. I moved a couple of payments to be made earlier than their due date to ensure there would be some paycheck left at the end of the month.

For example, I had a bill due on the 5th. Under my system, it would be paid out of my paycheck on the last day of the month, but that check took a big hit from my mortgage, so instead, I jumped it ahead and paid it out of the check on the 15th of the previous month.

3. I Renegotiated Expenses

I looked at areas where I was paying a higher price for being a long-time customer, like cable, phone, and insurance. I called each company and said I wanted to end my service with them because I could get a lower price elsewhere. In each case, they reduced my bill to match what they would offer a new customer. I also successfully petitioned to remove mortgage insurance from my monthly housing payment, decreasing that payment by about $200.

4. I Made Some Small Sacrifices

Unlike conventional advice, I didn’t eliminate everything fun in my life. I did switch my morning mocha to a black coffee, saving $3 a day. I switched to a gym with a $20 lower monthly cost. I set a goal for how often I would go out to eat, and when I did, I skipped extras that increased the bill, like cheese on my burger, appetizers, and a second beer. All those small changes added up to lower expenses without making me feel deprived.

5. I Paid Off My Lowest Balances First

I paid off my lowest balance debts first, regardless of the interest rate. I paid more than the minimum due, and any “extra” money went right towards paying off that lowest balance bill.

I know this is completely opposite of what financial advisors would say because it means you may be paying off a lower-interest card before the higher-interest cards and paying more money in interest over the long run. But for me, the psychological benefits of my strategy were enormous. Every time I knocked off a bill, I felt a sense of accomplishment, which encouraged me to focus on the next bill and keep going on the path to freedom.

6. I Made It Harder to Impulse Buy

I removed my stored credit card information from stores like Amazon, so I would have to get up and find a card every time I wanted to make a purchase. I cut up all of my credit cards except for two that I could use for things like renting a car or a true emergency. I kept my “to be paid off” list near my desk where I would see it every time I was tempted to spend money.

7. I Tricked Myself into Saving

I set up a savings account and connected it to my checking account, but I did not add it to my debit card. This meant the only way I could access the money was by going to the bank. Then I set up a $50 transfer from my checking to my savings to happen on the same day as my paydays. The money would leave my checking account before I even noticed it was gone. Gradually that $100 a month grew into an emergency fund.

I also made a deal with myself that if I got an unexpected windfall like a bonus or a tax refund, I would put half into the savings account the day I received it, and then I could use the rest for whatever I wanted.

8. I Cut Myself a Break

For a long time, I felt like an idiot because I had accumulated so much debt. I felt like I should have known better. One day I resolved to use it as a learning experience. Instead of beating myself up, I reminded myself of what I learned from the experience. I did a lot of research to learn more about deceptive practices that had encouraged me to fall into the debt trap.

I told myself every day that it didn’t matter what happened in the past. Now I was going to be debt-free. I even visualized what it would be like to go to the mailbox and only see junk mail instead of a bunch of bills. And one day, my vision came true.

Hopefully, some of these strategies will work for you too. Good luck.

This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.

  One thought on “I Broke All the Rules to Pay Down My Debts

  1. Brenda Jose
    November 12, 2020 at 8:29 pm

    Congratulations, Rose! Your advice from personal experience was excellent, I hope you inspired many people. I was blessed with parents who gave me an incredible financial education. When I was about 8 years old, they decided to give me a generous allowance from which I as to buy everything, including clothes, shoes, entertainment, candy, etc. They stuck to their guns and I learned many important lessons – some the hard way. That education has served me well and I still thank my 97 year old mother to this day.


    • November 22, 2020 at 9:34 pm

      Thanks, I hope you’re doing well.


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