How We Got Out of Debt: Our Top 11 Tips

Updated January 4, 2020

In 2006, we got serious about our long-standing debt and decided to tackle it intentionally. We owed approximately $150,000, including our mortgage. At the time, we were a family of 5 with an annual income of $40,000.

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How we got into debt

Other than our mortgage, the bulk of our debt came from school loans, although some came from my own stupidity…

In 2005, I had an idea for a business and somehow persuaded my husband to let me “invest” $5000 on our credit card. That’s a fancy way of saying “debt.” The business never got off the ground but the debt stuck with us.

The first steps

I resisted tackling our debt for a long time. This was me: I know what they’re going to tell us, “Get rid of cable, eat out less, cancel your gym membership, blah, blah, blah.

We’d already done those things.

We were living frugally but we were in a holding pattern. And we weren’t really looking for anything different. We were resigned to a slow crawl.

Somewhere in there I was introduced to Dave Ramsey. We began our journey following his Baby Steps. Then I read his book The Total Money Makeover. The book was so inspirational. By the end, I was in.

I was absolutely shocked when somehow, in the first month, we “found” an extra $1000 for a baby emergency fund (Baby Step 1). We didn’t make any huge adjustments by increasing our income or cutting large expenses. We just paid attention. And it was relatively painless.

I was hooked.

You mean we can speed this process up?

In Baby Step 2 (the debt snowball, or, all debt but the house), we paid off $25,000 in less than 2 years. This was the most intense part of the journey. Not only was our income tight, I was going through a very difficult time personally.

The first $15,000 was paid off a penny at a time on one modest income. It meant a lot of sacrifice and intentionality. My personal struggle eventually led us to sell our home. The amount we made on the sale of that house (about $10,000) got us over the last hump. Baby Step 2 was done.

After selling our home, moving across the country and settling in Texas, we bought another modest home. We didn’t want to get in over our heads again.

Changes over our 10-year journey

For much of our debt-free journey we lived on one income ranging between $40,000 and $50,000.

During this time, we also added another child to the mix and became a family of 6.

In 2010, I turned my hobby blog into a money-making blog. Over time, my online business increased our income substantially, accelerating our debt journey.

Where we are today

We are 100% debt free. We paid off our house on June 16, 2016.

Dave Ramsey’s Baby Steps work.

Now we’ve shifted our focus to the FIRE movement (Financial Independence, Retire Early). We don’t plan to retire, so our goal is just FI (Financial Independence).

Our general money principles & tips

  • Live generously. An attitude of giving instead of getting changes everything. Also, it’s some of the best fun!
  • Planning is key. Without a plan, money tends to come in and go out unnoticed. I honestly thought I had a great handle on things. Then we started writing things down. Turns out I was wrong.
  • Understand the 10/90 Rule. 10% of our financial success is due to our wise choices, 90% is due to grace. Our job is to obey, trust and pray. His job is to make ends meet.

1. Give

Call me cheesy or too religious, but I will talk about the benefits of giving (tithing) until I die.

To me, tithing is about connecting and simple obedience (He said do it so we do). It’s “putting my money where my mouth is” — a physical reminder I’m gettin’ on God’s bus. Not my own bus. Not someone else’s bus. God’s bus. He gets to drive.

Once I got over letting go of driving my own bus, I could enjoy the ride. The actual money part of it became secondary. The best part was being on God’s bus because He knows places no one else does.

We give at least 10% of our gross income every month, even when it doesn’t make sense on paper. Believe me, there were times when it didn’t make sense on paper. I don’t really know how it works, but God fills in the gaps every time. Try it, you’ll see.

2. Check out Dave Ramsey

I don’t agree with everything in it, but The Total Money Makeover by Dave Ramsey was a huge motivator for us. It’s a quick read and the stories of real people are inspiring.

3. Write down all your expenses

Go back through old bank statements or credit card statements and make a list of all the places your money goes. Group them into categories when necessary.

4. Use the envelope system

Your categories become your envelopes. Each month, dole out your money to different budget category envelopes. Once the money in an envelope is gone, you’re done spending in that category.

I’m a computer geek so I must have tried every digital envelope budgeting system available. I found software called Budget and used it for years. As of 2019, we use YNAB (You Need a Budget). Highly recommended.

5. Write and stick to a budget

This is imperative and it doesn’t have to be scary. Behold the beauty of YNAB and it’s budgeting prowess…

Did I mention you can try YNAB for free for a month?

Alternatively, use the budgeting tools here, here or here.

6. Follow financially like-minded people

Their stories will inspire you and keep you motivated. Listen to Dave’s show or watch his YouTube channel. The debt-free screams are especially inspiring. This one is my favorite:

Also, follow hashtags or people on Instagram. For debt-free inspiration, I like #debtfreejourney, #debtfreecommunity and #debtfreedom.

For FIRE (Financial Independence, Retire Early), I like @richjourney and @personalfinanceclub.

7. Splurge on purpose

Build some breathing room into your budget for feasible luxuries and the well-being of your soul. Total deprivation today leads to excess spending later. My luxury? A slightly higher setting on the furnace.

8. Think upside down

Instead of asking the question, “How much can we afford?” ask “How little can we reasonably get by with?”

9. Model well for your children

Instead of saying, “We can’t afford it,” say, “We’re choosing to spend our money on something else.” The former breeds a victim mentality, the latter, responsibility and freedom of choice.

10. Purge and organize your stuff

First, get rid of stuff regularly. It costs time, money & energy to store it, maintain it and move it.

Then, keep it organized so you won’t buy stuff you already own. Clothes and food in the pantry/freezer are big potential pitfalls here. Meal plan!

11. Don’t assume

Buying in bulk is not always more economical. Generic brands are not always cheaper than name brands. Eating out is not always more expensive than eating in. Figure out costs per unit or per person to make the better choice.


There are far more spectacular becoming-debt-free stories for sure. But it’s all relative I suppose.

When we started, we were barely scraping by and financial freedom felt like a dream. We discovered it’s not just a dream. With a little sacrifice and creative thinking, it can be a reality.

Here’s my point: just start, then press on.

29 thoughts on “How We Got Out of Debt: Our Top 11 Tips”

  1. This has come at a moment where most of my debates about tithing are on the rise.

    I stopped tithing a while back but I use that 10% giving to a charity. I do my offering and a fraction of tithing to the church. I am still getting over the personal battle of 10% of my tithe going to the church.

    Though I currently practice the envelop method and also use AndroMoney to track my spending.

  2. Thanks, you just mentioned tithing. I need to put this in my dairy as I always forget then regret after. It’s something I gonna work hard for.

  3. This was an awesome read! Ive never heard the 10/90 rule, and Ive been in church all my life. So much fresh insight in this. I especially love number 8. Thanks for sharing!

  4. I really love your luxury item. It’s the small things that really make a difference. And feeling comfortable is important to ones sanity.

    Congrats on getting yourself back on track and out of debt. 🙂

    And in point 10 you make a really valid point. Don’t assume something is cheeaper than something else. Marketing has a way of making us feel a particular way and then we just accept it for granted.
    A 50% off branded product is almost always cheaper than a never discounted generic product. Well played.

  5. Congrats to you both Amy! What a fantastic job of commitment to accomplish! Thanks for sharing with us! I am sharing on my social media for others to take the step!

  6. Hi Amy,

    Congrats on getting out of debt. You are an inspiration and I really appreciate how transparent you are about your personal experience with debt.
    As an entrepreneur myself, I have really learned how to manage my personal finances better. It always hasn’t been easy. There’s been alot of painful learning lessons along the way.

    I’m almost debt free, and I’ve learned alot more on how to manage my finances through this post. Thanks again you’re amazing!

  7. Thank you for having taken your time to provide us with your valuable information relating to your stay with us.we are sincerely concerned.., Most importantly, you Keepit the major.

  8. Hi Amy! Congratulations on the work that you and your family have done to be entirely debt free. It took my husband and I many years to get to the same place, but isn’t it worth it ALL? Debt is the worst poverty. Sometimes it takes a while to realize that the many benefits that come to you when you aren’t constantly hustling for money. Lots of people think of it as having to sacrifice but when you are on the other side of it you KNOW without a doubt that it is the best thing you’ve ever done. That’s why my husband and I came up with the name “rightsizing” to explain our process and I write about it a lot on my own blog. I think the more of us that can share this information the better! ~Kathy

  9. Congratulations, Amy and Family!

    I am really happy for you and your family for getting out of debt 100%. I understand how that feeling must be. And I really fell in love with your line when you said the 10/90 rule: 10% are our wise finance choices and 90% is God’s grace.

    You nailed it.

    Thanks! More fulfilling days ahead!


  10. This is an inspiring story. We must sort out our priorities. It is really important to write and stick to a budget too. 🙂 Thanks for sharing 🙂

  11. Hi Amy,

    As I read through I seen a lot of myself in your writing. Especially the first part where you mentioned Tithe. It works like a charm. I find the energy of giving always has a few doors of receiving as long as we give freely from our hearts.

    I’ve been debt free for years. I learned my lesson well because I did overspend. Now I’m pretty careful. I love to shop and am pretty market savvy so I don’t buy retail ever…unless absolutely necessary. I go to the manufacturer and have to wait a little longer…but no more instant gratification for me.

    Money is a funny thing it needs to be respected but never feared.


  12. Amy, have you tried I’ve just come across it (on a list of Black Friday / Cyber Monday deals) and it sounds like it matches your envelope system. If you’ve tried it I’d be interested in any comments you have on it. Thanks.

  13. We don’t do Dave Ramsey, but everything else on your list I completely agree with and is what we are doing as well! We started out with $20,000 in Student Loan debt, and a $36,000 income. Along the way, we moved and for the past year and a half we have been paying rent in our new place, along with over $500/month on a mortgage on the other side of the state, for the house we haven’t been able to sell.

    But, even with all of that, we are on track to pay off the last of that student loan debt in Feb 2013! The end is in sight 🙂 (Now if we could just sell that house!!!)

    Love your list!

  14. I absolutely love that you included #1 (and made it your #1)! It is so true! I love the fact that I keep track of literally every penny that goes into and out of my bank account, but at the end of the month there is ALWAYS more money than I can account for. The Lord is good!!

  15. Such good stuff! I especially love #8 as well. I MUST be more cognizant of how we present our financial focus to our children. Thank you!

  16. Yes, yes and yes! I love following financially like-minded people to keep me motivated and learn new ways to save or make extra money. I completely agree with splurge on purpose too! Since you aren’t constantly making purchases, when you do make a purchase for something you really want, it makes it more special; a treat! 🙂

  17. I love #8. We’ve always had a smaller income but we’ve tried hard not to let our children feel “poor” and this is one way. Life is about making choices. Also, growing up my mom was very fond of saying we couldn’t afford something, but we always had money for cigarrettes. That was really hard for me to understand as a child.

    Congrats on getting (and staying) out of debt. It’s a great feeling.

    1. Great example of the confusion it can cause, Angi. I even have to remind myself since sometimes, even as an adult, I think “We can’t afford that!” instead of thinking, “Is this what I want to spend money on?”

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