How I Paid Off $27,000 in Credit Card Debt in Two Years

How I Paid Off $25,000 in Credit Card Debt in Two YearsBy Dana Burgess, as told to Gabrielle Karol

I live in Graham, Texas, with my husband and three children, who are 17, 14 and 9 years old. I work full-time at a public school as an "intervention" teacher, helping kids who need an extra push academically with reading and math.

When I first started racking up credit card debt, my husband was running two businesses, which we co-owned: a store that sold farm equipment and an auction company. The farm store wasn't doing so well at the time, so a lot of our money was going toward that business.

I had always been responsible for running the household, so when I didn't have the money for groceries, or for gas, I would just put it on my credit card. And then, occasionally, I would splurge on something and put that on the card as well. In three years, I racked up close to $63,000 in debt. It seems like a lot, but between paying for all the household utilities, food, phones and car payments -- and taking care of three kids -- it all adds up fast!

Dana's Wake-Up Call

My husband found out about one of the credit cards (there were six), and he was very upset about the balance, obviously -- he hadn't known that I had accumulated so much debt. And that was just the tip of our debt iceberg: He didn't even know how much was on the other cards!

Creditors had begun calling the house as well, and that's when I finally realized I needed to gain control over our finances and turn things around. I was so overwhelmed and stressed about it all the time, and I didn't want to be any longer. I had gotten us into this mess, and I knew I needed to make some big changes, for the good of my family.

So, I decided to get aggressive with our finances, trying to earn more while simultaneously paying off debt and learning to live with a whole lot less.

Taking the First Steps

Dana BurgessFrom my work as a teacher, I bring home about $2,900 per month. I set up automatic payments: $1,500 goes to paying off the cards with the highest interest rates, and the remainder goes to utilities, groceries and gas. My husband takes care of the mortgage payments, car insurance payments and extras for the kids like baseball-related expenses for my son, or summer camps, so I'm not responsible for those expenses.

Once I set my mind to paying down our debt, I tried to streamline every aspect of my life. I got rid of our second phone line and cut my gym membership -- I just started walking more for exercise. I used to get manicures frequently, which I cut out altogether, and now I just get my hair cut once a year. We used to eat out as a family, which we no longer do, either.

Plus, I started reading a lot of LearnVest articles, and I watched all the courses, which gave me a lot of good ideas on how to manage my money. I also signed up for email newsletters from a site called 5 Dollar Dinners, which sends coupons each day.

Baking My Way to Earning More

I also started working more outside of my job as a teacher, which allows me to contribute more money to paying off my debts. I sell Mary Kay cosmetics, and I can make between $300 and $400 for a two-hour Mary Kay party. Not bad!

Additionally, I bake cakes for events and weddings. My mother baked cakes so she could earn money while being a stay-at-home mom, and I swore up and down that I would never bake cakes. But when I needed the money, I thought, "I could do that, too!"

I sell little birthday cakes for about $25, and wedding cakes for $3 per slice. One time, I sold a wedding cake for $1,500! All of this extra money I put toward paying off my credit card debts more quickly.

Raising Kids on a Shoestring Budget

When I decided to take charge of my finances, I told my kids that things were tight, and that they would need to start saving up for the little things they wanted. I try not to make them stressed about money, so I won't go grocery shopping if they're with me, because they'll want things that aren't on the list, and that doesn't fit with the budget I need to follow.

We have them work for us when we run auctions, and we'll pay them so they can buy new clothes or go out with friends. They also do odd jobs for their grandparents to make some extra money. I think it teaches them a lot about saving, and I hope it means they won't ever end up in a mess like I did!

How I Still Manage to Enjoy Life

As of April, I have a little over $36,000 (of the original $63,000) left to pay off.

I'm obviously really committed to paying off this debt, and working these part-time jobs does take a lot of time. But if something good happens, like I sell an expensive cake and can pay off an extra $200 on a credit card, I'll treat myself a little. It's always small, like ordering lunch for $6 or stopping by the Dairy Queen. Now that I'm not used to splurging all the time, even the littlest splurges seem much more special.

And I know that when I finally pay off all of my debt, and can settle my children in at college and help them financially, I'll just feel incredibly relieved. Just thinking about that motivates me to keep going.

LearnVest is the leading personal finance site for women. Need help managing your money? Our free Money Center will help you create a budget. Our free bootcamps will help you take control of your money, cut your costs or get out of debt. And our premium financial plans -- managed by LearnVest Certified Financial Planners -- can help you chart a course for the future you want.

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Fred Jackson

Hello everybody,

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He has done it before and he is going to do it for you please don’t doubt anything he says anything he ask you to do just do it and I swear you will never regret it.

February 13 2014 at 4:57 PM Report abuse rate up rate down Reply

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October 12 2013 at 7:51 PM Report abuse rate up rate down Reply
Ruthy at Golden FS

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August 15 2013 at 9:42 PM Report abuse rate up rate down Reply

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August 15 2013 at 8:50 PM Report abuse rate up rate down Reply
Tina Cannon

The point of the article is to inspire people to take accountability. Work cohesively and stay focused. It isn't up for further criticisms as she is showing ownership of her choices and making necessary changes. It is also about living in the now, NOT the past. It happened, she's not denying it. She experienced the lesson and has learned from it. She is an example of sharing her struggle openly for those who experience the same. Therefore, the effort needs to be celebrated. Everyone here and everywhere have their "baggage" to work on. There are no exceptions here. Show more praise and empowerment to others, minus the analytics, so we build people up instead of down. The world could benefit from it on a whole. Way to GO! Keep on keeping on, with paying your debts and freeing yourselves. The accomplishment and the effort is the more important conversation here.

October 12 2012 at 10:48 AM Report abuse +1 rate up rate down Reply

While I am happy for you and your progress, I cannot help but think how you would accomplish this if you were not married and didn't have someone paying your rent and vital monthly bills. If I had someone paying my monthly bills for me then I would be debt free too!!!

May 23 2012 at 8:27 PM Report abuse +2 rate up rate down Reply

When I lost my job, it was the best thing that could have happend for my family. Living simple is so envigorating. It frees you from all the materialistic and MEANINGLESS bullcrap. We live on just my husband's salary of $13.35 hr. and we reside in the midwest in the third largest city in our state. If we can do it and be happy and content, I am sure many others could too. It would actually free up jobs for others who NEED them right now. Think about what your spending the extra money on, to afford two people to work outside the home and I bet you will be amazed! Besides childcare, extra car expenses, extra insurances, and all of the convenience grocery items, think about how many items that were not repaired, but replaced. Think about all the gizmos bought to make a working gal's life easier. When it's all added up. A lot of us women are working to aford to go to work. Too stressed and worn out to make dinner, you buy the premade crap. Too tired to repair that torn blouse you buy another. That tub is too dirty you threw it out and bought another. You and your husband came home every evening stressed and tired. Who was there for you end the end of your day? My husband and I would always joke that what we really needed was a housewife. That when we got home our meals would be done and the house would be clean etc... Duh! I could have been doing that all along. Now, all my husband has to do is come home on a work day and enjoy his dinner and his family, the rest is taken care of. You would think that now that we have less money, that he would be more stressed, but he has admitted that he feels much less stressed in our new routine. I am there for my husband and my family 100% and I love it!

May 22 2012 at 6:02 PM Report abuse rate up rate down Reply
My 3 kittykats

I can pay my debt off in 3 months, it's called chapter 7

May 21 2012 at 9:35 AM Report abuse +1 rate up rate down Reply

I paid off $14,000 credit card debt in two months.

May 21 2012 at 9:22 AM Report abuse rate up rate down Reply

You should be telling us how the hell you racked up $27,000.00 credit card debt in the first place.

May 21 2012 at 2:34 AM Report abuse -1 rate up rate down Reply