How I Paid Off More Than $4,000 of Debt in One Month

When I began this blog, I posted about my beginning debt totals. So start there if you are curious. For the month of February (2020), my husband and I were able to pay off more than $4,000 of our debt! To be exact, the total was $4,223.06. Below I’m going to explain how we did that and share some tips on how to pay off your own debt!

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Payments Made:

Minimum Payments to Debt:

First off, we paid the minimum balances on our mortgage, car loans, and student loans. That’s where you always start no matter what! For our mortgage, we paid our minimum payment of just under $1,400. For student loans, the minimum was a little over $300. Plus our car loans, which together comes to just over $500.

When calculating the debt payoff total, I do not include our mortgage, as it is mostly paying off interest – I only take the amount that is coming off of the principal. However, the car loans and student loan payments count towards our debt payoff. So total debt payoff currently: a little over ~$850.

Extra Payments to Debt:

When looking at our overwhelming debt amount, my husband and I loosely follow Dave Ramsey’s 7 Baby Steps, we just make a few tweaks of our own to match our lifestyle. If you’re interested in learning more, I recommend reading Dave Ramsey’s The Total Money Makeover to get more information about the baby steps and how to get that done.

Extra on Our Mortgage:

For the first step, we pay over our minimum mortgage payment. Our minimum is just under $1,400, but we pay a flat $1,600. That extra amount that we pay, we designate to going to the principal amount. Not only does that just pay down our debt, but over time, it reduces the interest that accumulates and we pay the mortgage off faster! With every payment, the principle decreases by a little over $500 – woo! Total debt payoff now: ~$1,350.

Living on A Budget:

As teachers, we get paid every month, on the last weekday. So today is payday – yes! When we first combined finances, we sat down and looked at all of our bills, added a small amount as spending money, and figured out the minimum we needed every month to make our payments. That total came to $7,500 for a month. Our combined pay is more than that, sometimes more, sometimes less depending on the month. So at the start of the month, we subtract what we have from what we need, and put that amount to our debt. This month was a larger amount than normal because we refinanced our house the month before, so no mortgage for January, so we had more money in our checking account at the start of the month that we could put towards our debt. That amount came to just over $1,500 – woo! Total debt payoff for the month: ~$2,850.

I go more into how I set up our budget in my post about budgeting!

Tax Return Season:

I’m one that like to finish things as soon as possible. I don’t like to procrastinate, especially when it comes to money and finances. Tax return season is upon us, and I made sure to complete our taxes ASAP! With our tax return, we received over $1,200. We sat down and figured that we should take those funds and throw it towards our debt, even though we’re saving for home improvements and our trip in the summer. With that payment, we are up to a total payment of ~$4,050.

Extra Cash:

Now that my coaching season is done, I had a lot of free time after school. With that free time, I decided to start cleaning out the house and putting items up for sale on Facebook. With that alone – just taking pictures, posting them, and meeting up with people, I was able to make over an extra $200, which we put right towards our debt. Alicia from Let’s Talk FAM (Finances and Medicine) has a great introduction post about Buy, Sell, Trade groups and getting started – check it out if you’re looking into how to make more money during the month! Thus bringing us to just over $4,200 paid to debt in the month of February.

How you can start paying off huge amounts of debt:

1. Pay your minimums. Always pay your minimum payments first on all debts that are due. Even if it seems like it’s not helping much, it’s better than wreaking havoc on your credit and having more interest build!
2. Know your budget! Sit down and figure out where your money goes. What are the payments for subscriptions, do you need those subscriptions, where can you cut, etc. Once you come to that final number, make sure you make over that amount! If you need more information on making a budget, I have a link to 7 steps to a budget. If you make over your minimum amount needed, take the extra and throw it towards debt! Don’t? Go to tip #3.
3. Make extra cash. However you can! Get a side job or sell things you don’t need any longer (like what I did this month!) – those are the easiest ways to start. Finding little ways to make extra money is amazing, and then, throw it at your debt!
4. Dedication. Being dedicated to paying off debt is super important. It can seem like you aren’t making progress, especially when you start with a HUGE number. But being dedicated and consistent with your goal is part of being successful when paying off debt.

How are you tackling your debt? What successes have you had? What lessons have you learned?