In my 20s I did a great job at accumulating debt and then paying it off. By the time I had finished undergraduate school, I had accumulated my fair share of student loans. I worked full-time for a year and then I went back to school for my master’s degree. My accumulated student loan debt then doubled, and I had a small accumulation of credit card debt. I started working a great full-time job before I even technically graduated. Then, about a year after working, I bought a brand-new car only to lose my job a few months later due to the start of the Great Recession. Within a couple of months, I relocated and started a new job. Then, a year later I relocated again, started another new job, and bought a house.

And then, I decided that I wanted to be debt-free. I was in my late 20’s at the time. The bad news is that by now I had accumulated a pretty large amount of debt; the good news is that once I decided to be debt-free, I managed to pay it all off (except the mortgage) in less than four years.

To pay off debt, you must have a budget to account for every penny you have coming in and out. Check out my post on budgeting to get started.

Now, let me tell you how I paid off my debt, what mistakes I made in the process, and what I actually did right!

Paying Off My Credit Card

First, I paid off my credit card debt. I paid this off really quickly as it wasn’t an excessive amount and it was only one card.

Paying Off My Car Loan Early

I started listening to podcasts by Suze Orman and also discovered one of her book sets at a discount store. I think it was one of the last books in that series that discussed paying off your car. By this time I had saved a pretty large emergency fund, more than a 3-6 month fund. I decided to part with some of it and make a lump sum payment and pay it off. This felt great, and I had no regrets. At this point, I had a lot of excitement and momentum toward my debt-free goal. My car loan was paid off in 3 years and 3 months, instead of 5!

Paying Off My Student Loans Early

Next, I was ready to tackle my student loan debt. Paying off your student loans when you graduate pretty much feels impossible to most people. When I told people I was trying to pay mine off, usually got chuckles and remarks saying it wasn’t possible or a comment that they could never pay off their student loans because they were too much. As Desmond Tutu said, “there is only one way to eat an elephant: a bite at a time.” I was determined to eat this elephant!

I didn’t know anyone else trying to do what I was doing. At that time, I was working for a small, family-owned business that were HUGE Dave Ramsey fans. They actually had a Financial Peace class at our work (which I regret not taking advantage of). It led me though to start listening to The Dave Ramsey Show podcast. Hearing people do their debt-free screams was AMAZING! I stuck with it and paid off my student loans. It took me 6 years after graduating to pay off my student loans, instead of the 20-year term.

So, I was 30 years old and debt-free except for the mortgage!

My Biggest Money Mistakes

Now, let’s take a look at my mistakes because I think they are worth mentioning and I HOPE other people can learn from them and avoid debt!

• I used a credit card in college. Near the end of a semester, my cash flow would always get tight so I would use my card and then pay it off with my refund check at the start of the next semester.
• When I was in my mid-20’s, I started investing in my company 401(k) and I also started buying some single stocks before having a fully funded 3-6 month emergency fund. I learned the importance of an emergency fund the hard way.
• I wasted a lot of money on clothes!
• When I was in my mid 20’s, I opted to buy a brand-new car while financing almost all of it. Having a car payment when you have no job sucks. Read my post on how to significantly save money on your car expenses.
• When I bought my house, I started making extra payments. While this was good to save on interest, I wasn’t completely focused. I was paying extra principal payments to my mortgage (I really hated paying PMI) while I still had a car loan and a student loan. Many experts will tell you I did it in reverse, which I figured out eventually after I started doing some homework.

What I Did Right in my 20’s

While I made quite a few mistakes in my 20s, I think I ended up doing pretty well by the end of them. Here are some of the things I did right:

• I started making extra principal payments on my student loans within months (each time I graduated).
• I never allowed myself to accumulate a large amount of credit card debt.
• I never was late for a credit card payment.
• Upon starting my first job after graduate school, I began reading investment books, invested in my company 401k, and started budgeting using Excel (the good old-fashioned way).
• I lived within my means for the most part.
• When I bought a house, I started making extra payments as I wanted to pay off the mortgage early.
• When my husband and I got married, we cash flowed our wedding.
• I learned how important an emergency fund is and saved like crazy to fully fund it.
• Most importantly, I found the value of being debt-free, committed to doing it, and accomplished my goal.

What’s Next?

Well, the next part of the journey is paying off the house. Learn how to be Completely Debt-Free by Age 40.

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