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March 5, 2020 by Cassie

How This Family of 4 Paid Off Over Six Figures Of Debt On One Income

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six figure payoff

Welcome back to our Debt Free Series! This week we were fortunate enough to speak with Kelly about how she and her husband were able to pay off over six figures worth of debt.

My husband and I always thought we were pretty good with money. We kept our bank account above a specific limit, could make all of our minimum payments on time and be able to buy things that we wanted.

The problem was: we could never quite get ahead. 

We made too much money and didn’t have much to show for it. We had small 401ks and absolutely no other investments. It felt like we were continually spinning our wheels without going anywhere. 

After some reflection, we decided to take a look at how much debt we had… and oh my goodness gracious. It was BAD!

six figures of debt

We had over six figures of debt! This didn’t even include our mortgage. When I saw the final total, I felt sick to my stomach. 

I began to wonder how we got here. More importantly, what in the world we could do to dig ourselves out of this hole.

How did we get here?

Between the years of 2013 and 2018, we moved across the country, got married, moved back across the country, bought a house, had a baby #1, got pregnant with baby #2, transitioned into a single-income family so I could stay home with the babies, then bought a bigger house. 

Five years and lots of life changes. Not all were necessary – cough cough having a baby is not always a great reason to need a bigger home. Also, it didn’t help that we weren’t afraid to put things on credit cards.

We had an excellent household income. However, we did not understand the importance of cash flow and leaned heavily on loans and credit. It is no wonder that we had wandered our way into a mountain of debt.

Let me break down our debt for you:

  • Husband’s student loan: $5,500
  • Credit card: $19,000 
  • 401k Loan: $37,875
  • My student loan: $31,311
  • My car: $42,459

Our total debt: $136,145

It suddenly made sense why we weren’t able to save any extra money! It was leaving our hands to pay our minimums as soon as we got paid!

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< Stop Living Paycheck to Paycheck: Pay Off Debt and Start Saving Money

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< Learn How To Get Out Of Debt Fast And Live Debt Free

How did we escape?

Seeing our debt total shook us to the core. We needed to do something fast. So, in May 2018, we actively began paying off our debt.

I’m proud to announce that 21 months later, we have less than $30,000 left to pay off. We are projected to be debt-free by December 2020, if not earlier!

I firmly believe that if we can change our habits to pay off debt, then you can too. Here are the secrets that worked for us:

You absolutely need to create a budget

We couldn’t figure out where our money was going until we sat down and tracked it. Yes, we had our minimum debt payments, but we also discovered that we were blowing money left and right. Quick trips to Target, meals out, and coffee runs add up much more quickly than you think!

It was a hard pill to swallow because I am more of a spender than my husband is. I was the one wasting most of our money.

Together, we sat down and looked at our monthly income and allocated our paychecks toward our fixed expenses. From there, we further budgeted for gas, groceries, and a small amount of personal money.

As soon as our paychecks rolled in, all extra money went to debt. 

We found that by putting a budget in place, we were able to prepare ourselves financially for things. Birthday party coming up? Put it in the budget. Friend’s wedding next month? Put it in the budget. 

Since we started budgeting, we were able to successfully plan for and cash flow the birth of two of our children. 

>>>>Budgeting is always the key to paying off debt!

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You absolutely need to part with your savings

While we had a lot of debt, ironically, we were also money hoarders. We had about $25,000 in our savings account for our wedding. We considered this money our “rainy day fund.”

The joke was on us because it was already raining debt. 

With a deep breath and lots of nervousness, we drained our savings down to $1000. Yup, we threw $24,000 right at our debt. 

While this was scary, we were able to knock out our two smallest debts and build some serious momentum! What seemed dreadful at first turned out to be a serious motivator to keep going.

So, if you’re like us and nervous about getting rid of your savings buffer, tell yourself that it is only temporary, when you are debt-free, you will quickly be able to pile money back into your savings because you won’t have any other payments! 

Related article: 9 Of The Best Financial Books Of All Time

You absolutely need a “why”

Sure, saying “I want to get out of debt” is all that it takes for some people. However, in the likely event that temptation to spend money creeps back in, you need to have a solid foundation of why you’re choosing to pay off debt.

Our why was wanting to provide a better life for our kids. We want to be able to provide them with opportunities, pay for their college, and teach them responsible money habits. We couldn’t accomplish any of this while we were financially irresponsible.

Knowing that our goals for our family rest on us getting out of debt, we have a much easier time making good choices and saying “no” when confronted with the opportunity to spend frivolously.

What we learned

We learned that getting out of debt is not easy. Our budget required constant fine-tuning in the beginning. We made some serious mistakes, which gave us the desire to quit altogether. However, our “why” is always greater than everything else, and it’s why we continue to push.

When we are finally debt-free, we plan on celebrating by meeting with a financial planner to discuss how to invest our money and start building some serious wealth! I can’t wait to see what the future holds now that I feel hopeful about money for the first time in my life!


Thanks, Kelly, for sharing your amazing debt-free story with us! Wishing you all the best, keep crushing your goals. =)


If you haven’t started your budget yet or you need a place to keep track of your finances make sure you grab your FREE copy of our budget binder below. =)

Grab Your FREE Budget Binder Today!

Start saving more money and pay off your debt with this FREE Budget Binder

You're so close to getting your Free Budget Binder printables. Shortly you will be receiving an email from us. That email will contain your Free Budget Binder!! Make sure you check your spam box just in case it ends up there and then add us to your known contacts! We're excited to have you in our Living Low Key community and can't wait to help you reach your goals!

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If you enjoyed this article make sure to save it for later and join us over on Pinterest for more money-saving tips and ideas!

Related articles:

< How To Stop Spending Money On Unnecessary Things You Don’t Need

< How Michelle From Making Sense Of Cents Ditched Debt To Travel Full-Time

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About Cassie

Cassie is the founder of Living Low Key, a website devoted to finding financial freedom. A minimalist who believes in living on less and saving the rest. After paying off over $30,000 in debt, she has since helped thousands create budgets and pay off their debts. She is also passionate about helping others find their perfect side hustle, so they can quit their day jobs and live life on their terms.

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Cassie & David

Hi, We're Cassie and David. A few years ago we decided to change our lives by creating a budget, paying off our debt, and saving six-figures and counting! Next, we're tackling our mortgage. Join us as we race to pay off our house and along the way, we'll share our experiences and money-saving tips with you!

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You're so close!! Shortly you'll receive an email from us with your Free Budget Binder in it! Make sure you check your spam box if you don't see it. If that's where we ended up, make sure to add us to your known contacts so you don't miss anything. We're really excited to have you in the Living Low Key Tribe!! Cassie and David

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