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How to Pay Off Debt

How I Paid Off $30,000 in Debt in 18 Months

Paying off debt doesn't happen overnight. DailyWorth shares how one woman cleared out her debt in less than two years!

By the time I was 26, my finances were a complete wreck. I was $30,000 in debt with no savings, but plenty of bad money habits.

How did I get into that position? For the most part, it was unconscious spending. The $29,500 I earned as an entry-level assistant in the television industry wasn’t enough to live the life I wanted, and I was dipping into my credit cards to support my lifestyle. I was spending a lot of money on entertainment, going out and even treating friends. I chose to live in Manhattan, spending more than an entire paycheck on rent, and I found myself running up the credit card tab each month.

RELATED: How to Strategically Manage Your Debt

When I got off the phone with a creditor one day and discovered that I had let one credit card go unpaid for so long that I didn’t have enough cash to cover the minimum amount — $2,000 — to bring the account current, I knew it was time to get serious about paying off my debt. I had let the problem balloon out of control and lived in denial for a long time, but I finally realized no one could save me but myself.

I’ve never been one for “quick fixes,” so even though my debt total was higher than my salary, I decided that bankruptcy wasn’t an option for me. Neither was consolidation or credit settlement. It had taken me years to create this mess, so I knew it was going to take some time to get out of it.

First, I sat down and figured out what I owed. I had been avoiding this step for years. Once I totaled it up, $30,000 between three credit cards and a personal loan, I cried my eyes out. I felt sick to my stomach, and I was angry. Angry at myself for letting the problem snowball. But I took that anger and used it to make a decision: to stand up to the situation and the creditors and fix this thing. Suddenly, I was determined, resolute and scared as hell. That night, I cut up all my cards, except the one my parents had opened for me in college. I put that one in a Tupperware container filled with water, and stuck it in the freezer, so I couldn’t use it.

Next, I sat down and figured out how much I was spending in relation to what I was making. It was clear I was a classic underearner. I was using the credit cards to float my lifestyle and was too nervous to ask for a raise. I realized I had to cut back on spending, but I also needed to get a higher paying job. I knew I was doing more than my share of the work and not getting paid accordingly and was feeling resentful: I received praise and recognition, but not an increase or a promotion. So I decided to look outside the company for other opportunities. I found a higher paying job with a promotion, at a company that paid all my benefits and a had a generous bonus structure. It came at the perfect time.

From there, I began to put new habits in place, such as checking my account balances every day, to keep my spending on track. I also committed to using all cash, all the time. I stopped using my credit cards, cold turkey, and I started paying them off one by one, beginning with the lowest balance and working my way up to the highest balance. To stay motivated, I built rewards into my budget. For instance, if I stuck to the plan for two weeks, I would buy myself a new book or go out to lunch.

I ate at home a lot and cut back on shopping and entertainment. I started making sure that after I paid bills and living expenses, I was spending the leftover money on things I actually enjoyed. So I took improv classes and bought books and cut out things that I didn’t value all that much, like excess clothes and mindless happy hours.

The whole process took 18 months. I put all tax refunds and bonuses toward paying down my debt and paid off as much as I could each month. I was serious about being free.

It was a painful year and a half, but deciding to pay off all my debt was one of the best decisions I’ve ever made. It taught me how to live simply, to enjoy what I have and to be more patient. It ultimately changed the way I thought about money, and the daily actions, over time, became automatic habits.

When I paid off that last credit card, it was such a great feeling! I told my new boyfriend at the time, now my husband, on the phone and we both shouted, “Woohoo!” We celebrated that night with a nice dinner out.

Eventually, I began sharing my financial struggles with other women, and one suggested I teach a workshop on the subject. I started asking friends and friends of friends if they would be interested in getting smarter about money too. On a Saturday morning, 10 women showed up to a friend’s apartment ready to learn. It was so thrilling. I made it a workshop specifically for women because I wanted us to be able to open up and share emotionally, which I think is easier when it’s just other women in the room. From there, I recognized a real need for simple, honest financial counseling for women, so I began teaching more classes and taking on private clients.

Now four years into what turned into my own money coaching practice, I’m working full time teaching women how to quickly take control of their finances and helping them transform their relationship with money.

The most rewarding part: when clients come back to me six months or a year after our sessions, reporting that they’ve paid off their credit card debt or student loans entirely. One woman in my workshop looked at her financial snapshot and recognized a need to earn more money. A few months later, she landed a new job, nearly doubling her income. Another woman used the tools to save $10,000 and go back to school full time with a scholarship. Other clients have a clear date on the calendar for when they’re going to be debt free, which gives them peace of mind.

And then there are the softer examples. Women report that they feel less anxious about their finances. One client told me she sleeps better at night now knowing she’s on the right track with her finances. Another reported she and her husband fight less about money. Although it takes some time, most of my clients wean themselves off using credit cards. If they don’t, I encourage them to use just one card and pay the balance in full every month.

I'm so happy to be have come full-circle: repairing my finances and then sharing what I’ve learned with others through my own small business.

Jill Davi blogs about taking control of your finances at

—Jill Davi (as told to Nancy Mann Jackson)

Check out these smart tips from DailyWorth:

Is Your Debt Ratio Healthy?
He Has Debt. You Don't. How to Protect Your Marriage
Pay Off Your Debt For Good This Time
My First Step Out of Debt

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