illustration of lady cutting off credit card debt by chiara ghigliazza
Chiara Ghigliazza
Chiara Ghigliazza
Work & Money

‘How We Paid Off $74,000 Worth of Debt in Two Years’

Our family went from living paycheck-to-paycheck to becoming debt-free.

Hubby, my two sons and I were heading to the mall for our favorite Saturday pastime — shopping for nothing in particular. I decided to check the mail and saw a letter that stopped me in my tracks.

“Dear Mrs. Linton,” it read. “We’re canceling your American Express card. We know you rely on it every month, but you’ve been pretty irresponsible with it lately. We’ve already reduced your limit, but that didn’t seem to faze you. The late payment you made last month was the last straw. We want our card back — now. Sincerely, AmEx.”

Okay, so maybe those weren’t the exact words, but that was the gist of the letter.

It was true, my husband, David, and I treated our AmEx like a third income, putting whatever expenses didn’t fit in our budget on the card. Now we were losing our safety net.

After reading that letter, I sat down and cried. How were we going to afford groceries and gas? Oh, and I guessed we weren't going shopping that day. American Express had suddenly ruined my life as I knew it.

Thank God. That moment represented a turning point. What led up to it was years of poor money habits.

I grew up in a home where having debt was expected, not unlike many Black families. If you wanted something big, then that meant payments. Need a car? Car payment. Want to go to college? Student loans. Have an emergency? Put it on a credit card! You didn’t save up and pay for things … you made payments.

But while debt was the norm, I didn’t understand how it worked. So at a young age I made poor choices. By the time I got married at 26, I had student loans, multiple credit cards, a car loan gone bad and other debt.

David brought debt into the marriage, too. Together, we went from one car loan to another and from credit card to credit card. When we needed furniture, naturally we got the “zero interest, no payments until you die!” option. Christmases were financed. So were dinners out, entertainment, clothing and more.

For a while we handled our monthly payments, so I ignored the voice that told me we weren’t okay. I mean, if you looked at our statements you wouldn’t see trips to Europe or Gucci bags. You would see everyday stuff.

Eventually, our payments went from being manageable to a little uncomfortable to overwhelming. We were robbing Peter to pay Paul. One by one we maxed our cards out until the last one standing was the AmEx. Devastated doesn’t begin to describe how I felt the day I got that letter. But that day changed my life.

We were forced to face reality. David and I added up our debt. We owed $74,000 plus our mortgage, and we were overspending by $2,000 — every single month.

Those numbers scared us, but they also empowered us. There’s just something about knowing exactly what you’re facing. David, aka Mr. “We’re Fine,” was suddenly awake and ready to start making changes. These are the steps we took:

1. We used the zero-based budgeting method, where you plan your income down to the dollar. This approach forced us to prioritize our expenses and distinguish our wants from our needs.

2. We eliminated unnecessary spending: trips to the mall, eating out and vacations. Turning down afternoon coffee runs with coworkers and drinks with the girls was tough.

3. We reduced our monthly bills or eliminated them. I became the queen of negotiating, getting our cell phone bill and other services down to packages and rates that “didn’t exist.”

4. We attacked our grocery spending. I became a coupon maven and started planning meals, saving us hundreds of dollars each month.

5. We got side hustles. David took on freelance jobs, plus more hours at his day job. I looked for whatever position I could fit around my full-time job, even applying to be a supermarket cashier. Fortunately, I found work as a census taker in the 2010 census.

6. We celebrated along the way. We kept a list of our debts on our fridge and crossed them off as we paid each one. We had small celebrations at each milestone. And we promised the kids they could choose between a vacation or stuff for Christmas once we paid everything off. (They chose stuff!)

We paid off the $74,000 in just two years. We were debt-free except for our mortgage.

Those two years were hard. But we focused on what we stood to gain rather than on what we were giving up. Our journey took us from feeling hopeless and defeated about our finances to hopeful and intentional. My biggest regret is that it didn’t start sooner; it took a wake-up call to force me into action. Now I blog about building wealth at hopeandcents.com to help others take control.

The lesson I pass on to others overwhelmed by debt: Don’t wait for a wake-up call. Identify an action step — even a small one — to get moving. Often, getting started is the hardest part.

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illustration of lady cutting off credit card debt by chiara ghigliazza
Chiara Ghigliazza