How I Paid Off $54,000 in Debt - Earnest | Earnest

How I Paid Off $54,000 in Debt: 12 Proven Strategies

By Hannah Olinger | Published on March 6, 2026

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I spent all of my 20s living in debt. At the time, it was what I perceived to be a normal life for a 20-something: credit card debt, a monthly car payment, and student loans.

I didn’t even blink twice at student loan payments because I believed that was what everyone did in order to attend college. Then between shopping, social outings, and annual vacations, I easily built up tens of thousands of dollars’ worth of debt on my credit card. The bigger financial picture never entered my mind: the interest that I would be accumulating every month by just paying the minimum payment.

After reading Dave Ramsey’s The Total Money Makeover, I decided to face my fears and write down the total debt I had managed to accumulate. It was nearly $54,000.

My two credit cards totaled $11,745, my undergrad student loan balance was $18,751 and my grad school student loan balance was $23,769. I entered my balances into a debt-repayment calculator; if I kept on making the minimum payments it would’ve taken me well over 20 years to pay it all off.

I knew that short-term sacrifices and adjustments had to be made throughout my journey to get debt-free, but I was prepared to do anything to get rid of the debt.

Three years after I started my journey, I successfully paid off approximately $54,000 of debt. Below are some strategies that helped me achieve debt freedom, along with some additional debt payoff tips from the Earnest team that may be helpful to you.

Key takeaways

How to pay off debt fast

1. Get organized

The first step to paying off debt is getting organized. Start by making a list of all of your outstanding debts, including student loans, credit cards, and any other loans you may have, such as a car payment. This list should include:

Making a list of your debts will give you a big-picture view of your current situation, how much you pay toward your loans each month, and the amount of interest you pay. From there, you can make a plan to pay off your debts. Although looking at the numbers in front of you may feel challenging at first, don’t get discouraged. It may take some time, but with a solid repayment plan, a healthy amount of discipline, and some patience, you can be debt-free. Consider some of the following options to help you get started.

2. Try the debt snowball method to pay off debt fast

I knew that I wanted to get rid of this debt as quickly as I could. I decided to try the debt snowball method. I listed my debts from the smallest balance to the largest balance. I attacked the smallest balance first, which was my $5,871 Chase credit card. While paying the minimum monthly payments due on my other debts, I paid on average $200 a month (which was more than the minimum payment) to my Chase credit card bill until the balance was completely gone. Then I snowballed that $200 payment and applied it towards the next largest debt, which was my $5,874 Bank of America credit card.

After two-and-a-half years, and with all my credit cards paid off in March 2015, I tackled my undergrad student loans. The minimum payment at the time was $165 a month, but I was able to increase the payments until I paid it off in December 2015. The final debt was my grad school student loan payment and I aggressively paid this off until the balance was paid in full at the end of 2016.

The debt snowball method is great because it can motivate you to continue reducing your overall debt. Psychologically, it helps to see progress as small balances disappear when you fully pay them off. If you instead focus on the biggest debt first, it will take much longer to pay off, and even longer if you lose the motivation to continue paying down a massive balance that only seems to be getting marginally smaller each month.

3. Consider the debt avalanche method to save money in interest over time

The issue with the debt snowball method is that it doesn’t account for interest rates, which means you may not be paying down the debt that’s going to cost you the most in interest over time. The debt avalanche method, on the other hand, does.

The debt avalanche method is similar to the debt snowball method, except instead of paying off smaller balances first, you prioritize debt with the highest interest rate. With this method, you’re attacking the debt that is most likely to cost you money in interest over time, and it can stop a big balance from growing even bigger as interest compounds. For this reason, the debt avalanche method has the potential to save you more money over time than the debt snowball method.

The issue with the debt avalanche method is that it takes discipline to stick to it. Unlike the debt snowball method, you may not see the same progress as you’re paying down your high-interest debt. If the highest-interest debt you have also has a high balance, you’ll be chipping away at that balance for a long time before it fully disappears.

Not only that, but the debt avalanche method requires committing a consistent amount of discretionary income to a debt until it’s paid off. If you miss payments, or find yourself with less room in your budget to contribute to your debt, high interest rates could see that debt grow back quickly, and your progress virtually eliminated.

4. Create a budget

Before each new month began, I got into the habit of writing down a monthly budget in Excel. I listed my income and then subtracted all of my expenses including rent, utilities, and monthly debt payments.

I allocated a certain amount of money towards groceries, gas, transportation and other small personal expenses.

After reviewing my budget, it was eye-opening to see that a huge portion of my money was going towards paying off debt every month. My minimum monthly debt payments accounted for about 33% of my take-home pay.

If your budget has zero wiggle room, consider taking on a side hustle for extra cash. Tap into your talents or hobbies to create items you can sell on Etsy for extra money, or consider driving for DoorDash, Uber, or Lyft.

5. Cut down on luxuries

Once I had my budget in place, I was able to track my daily spending habits in Excel so that I could see where my money was going. I noticed that I was doing a lot of frivolous spending on items that were “wants.”

I decided to cut down on my daily coffee habit, nail appointments, and book purchases, for example. Instead of depriving myself, I bought a coffee maker and made coffee at home. I invested in good quality nail products and had spa nights at home. I’m still a bookworm, but now I visit the library and check out any book for free. By making these small changes, I was able to save about $150 a month.

6. Plan staycations instead of vacations

In the past, it was so easy to travel and go on vacations because they were always charged to my credit card and I didn’t have to worry about the payment right away. While on my debt-free journey, I decided to put the vacations on hold temporarily. Instead, I went on road trips or enjoyed free activities right in my very own city. I visited local beaches, went on hikes, and attended local museums with discounted library passes.

7. Create a meal plan

Americans spend $3,008 on dining out each year. Besides it being a convenience factor, it is also a huge blow to the budget. In order to cut down on the food expense, I created a meal plan for the week based on what was on sale in the supermarket flyer. You do have to dedicate time towards cooking meals at home, but by bringing your own lunch and snacks into work you can potentially save about $10 a day.

8. Review your monthly bills

The first thing to go was my expensive $120/month cable package. We live in a world now where there are cheaper options such as Netflix and Hulu. So I downgraded my package down to basic cable and cut my monthly bill in half. If it’s hard to get rid of your cable package completely, you can always call your service provider and ask if there are any current promotions available to help you save money. Sometimes it’s really that easy.

9. Negotiate where you can

Cable companies aren’t the only ones willing to negotiate your rate. You may be able to negotiate discounts on your medical bills if you can pay the full balance in cash. If that isn’t an option, call your provider’s billing department and ask for a payment plan. Be crystal clear about how much you can pay and when you can pay it. They may demand larger payments, but be firm about the amount you can afford. Chances are, the provider will accept whatever amount you’re willing to pay rather than not getting paid at all.

Don’t rule out negotiating with credit card companies to help lower your debt and pay off the balances sooner. Depending on your situation, you may be able to ask them to waive or reduce your monthly payment, lower your interest rate, or remove prior late payment fees. Some credit card companies will allow you to settle your debt by making a lump sum payment, but this is only a viable option if you have access to enough cash to pay off the balance. Keep in mind that when debt is settled for less than the amount you owe, you may need to be reported to the IRS as income.

If you experience job loss or illness, you may also qualify for a hardship plan. The credit card company may lower your minimum payment, interest rate, or fees, and put you on a set payment plan to help you pay down the balance.

Even the IRS offers tax debt relief for those experiencing financial hardship. You may negotiate a partial payment, or if you’re incapable of paying your tax debt, you may qualify for the IRS hardship program. You must meet specific income and household expense guidelines to be eligible. If you qualify, the IRS cannot collect on your tax debt for up to 10 years.

10. Consider debt consolidation

If that doesn’t work, you can also consolidate your debt and transfer your credit card balances to a new credit card with a lower interest rate, or try a credit card consolidation personal loan. There are many balance transfer credit card options out there to choose from. Keep in mind, these may have very low introductory rates that skyrocket eventually. You want to pay off as much debt as possible before that happens.

With a credit card consolidation loan, you take out a new loan to pay off your debts. In other words, you use the funds from a personal loan to pay off your outstanding credit card balances. You may be able to work with a credit counseling agency to consolidate your debts. A big upside to taking out a debt consolidation loan is you only have to make one monthly payment instead of multiple payments to several different lenders, which can save you time and money by simplifying your personal finances.

Other advantages of this debt management plan include:

However, credit card consolidation loans have some downsides, too:

11. Consider student loan refinancing

If you are dealing with a high student loan interest rate, you have the option to refinance your student loans. When you refinance, you take out a new loan and use the funds to pay off your old student loans. Then, you repay your new lender. If you have a high interest rate or multiple loans to keep track of, refinancing can help make paying off your student loans more manageable.

When you refinance, you may be able to get a lower interest rate or reduce your monthly payment (sometimes both). Keep in mind, loan issuers typically offer the lowest interest rates to borrowers with good credit and a solid financial history. Refinancing may also reduce your open loan accounts and enable you to release a cosigner.

Refinancing could save you money by:

Each of these benefits has its pros and cons, so make sure to weigh your options and financial situation carefully before refinancing. For instance, lower monthly payments often come with a longer repayment period, meaning you’ll likely pay more in interest over the life of the loan.

Here’s a hypothetical example showing how you could save by refinancing to a lower interest rate: Let’s say you owe $20,000 on your student loans with an 8.99% APR and a repayment term of 20 years. You’d end up paying more than $23,000 in interest over the life of the loan. However, if you refinanced to a loan with a 4.47% APR and the same 20-year term, you’d save nearly $13,000 in interest payments.

12. Use coupons and apps for extra savings

Clipping coupons has helped me to cut my grocery and household items budget in half. There are coupon databases available online that will help you to see if there is a coupon available for a certain product, saving you both time and money. I’m no longer a shopping addict, but when I do go shopping, I typically go straight to the sales rack to get the best deals. Before I hit the checkout line, I always check Retailmenot to see if there are any available coupons to help me save even more money on my purchase.

All of these savings can really add up over time. And who knows? Once you persevere in paying off debt, you may be motivated to open a savings account and put that extra money toward an emergency fund so you can avoid relying on credit cards and other loans in the future.

If I can do this, so can you. You may get discouraged when you face that mountain of debt initially and fall off the wagon a few times along the way, but do not give up.

This journey won’t be easy, but believe me when I say it will be worth it when you become debt-free. Put in the work, make small changes and watch the path of your financial future change for the better.