How to pay off $20,000 of debt in one year

Are you tired of drowning in debt? Are you looking for financial freedom?

About a year and a half ago, we took Dave Ramsey’s Financial Peace University and finally decided to get our financial life in order. Since then, we have been working like crazy to pay off debt.

This year, we managed to pay off $17,163.36 in debt. This includes paying off three credit cards and more hospital bills than I want to count. (I think 6?)

However, this does not include the $2000 that we paid for car repairs (in one month…ouch!) or the $600 we paid to finally be free of a car lease. I like to call these expenses debt avoided.

If I add them to the total, it brings us to $19,763.36.

This may sound like a huge number or an impossible task. Really, it wasn’t.

Yes, it took some sacrifice and discipline, but really what it all boils down to is paying a little extra toward our smallest debt each month and watching those bills disappear. (Scroll all the way down to the end if you want to find out how.)

Here’s what the year looked like:

This section has a breakdown of how much debt we paid off and what happened during the month to help us earn extra money, or in some cases, lose money. If you would like to read the more detailed version of our lives in those moments, you can check out the debt-free diary links.


$1,088.40 of debt paid +680 to get out of the car lease

What happened this month: we used Christmas money to help pay off debt

Debt Free Diary Entry


$1,375.83 of debt paid

What happened this month: lots of overtime and mileage, some translation


$1,190.03 of debt paid

What happened this month: I did some tutoring and translation, with a little overtime sprinkled in. We bought an essential oil kit and went to a Dave Ramsey event.

Debt Free Diary Entry


$1,419.38 of debt paid

What happened this month: Nothing super out of the ordinary, a little overtime here and there.

Debt Free Diary Entry 1

Debt Free Diary Entry 2


$1,381.43 of debt paid

What happened this month: My husband had an extra check so we could have paid off a lot of debt but somehow we spent $534 on groceries and I spent $317 work event.

Debt Free Diary Entry


$1,913.18 of debt paid

What happened this month: My husband got a night job and the blog was born 🙂

Debt Free Diary Entry


$1,435.68 of debt paid

What happened this month: Many hours at the night job and my sister got married.


$2,589.37 of debt paid plus we saved $500 for car repairs

What happened this month: A large, very delayed mileage and a reimbursement check from work.


$1,612.36 of debt paid

What happened this month: My husband had an extra check, some extra work at the night job, $119 refund and $50 found cleaning!


$850 in debt paid

What happened this month: We paid $2000 for car repairs- cash.


$1,099.05 in debt paid

What happened this month: A lot of work at the extra job plus a mileage check but we spent $631 in groceries (my son had to go on a strict diet mid-month which meant all new food), $285 in medications and Doctor visits and $257 was spent on winter clothing.


$1,208.65 of debt paid

What happened this month: A lot of overtime and Christmas bonus. Christmas gifts and holiday travel.

Total: 17,163.36 +Debt avoided ($600 leave lease, $2000 in car repairs)= 19,763.36

If you are thinking, I could never do that! I don’t have $1,000+ extra just lying around each month, let me reassure you that you can and probably do.

When we first started this journey, we couldn’t even balance our budget. We were overspending by hundreds of dollars each month. However, with a few simple lifestyle changes, we were able to make things work.

We also are not paying $1000+ extra each month. We average around $850 per month in debt payments (just to make the minimum payments!). That means, we really only paid $300-$400 extra each month. However, over time, those little bits lead to 10 debt payments being wiped off our overflowing plates. Here’s how to find a little extra money in your budget for debt payments (or whatever your goal may be).

How to pay off debt

1. Set up your debt snowball

You can find wonderfully detailed instructions from Dave Ramsey himself here. Here is the abbreviated version:

-Write out all your debts.

-Put them in order from smallest to largest.

2. Create a budget

You can find more detailed instructions here.

-Make an account on It is a wonderful, free budgeting tool.

-Gather your bills and bank account statement.

-Use them to set up your budget with realistic, actual amounts (don’t estimate!)

3. Live on less than you make

-Cut out any unnecessary expenses. Here are some great ideas!

-Find ways to cut costs. Your grocery bill is a great place to start!

4. Stop using debt.

Find out how debt is keeping you broke here.

-Cut up your credit cards and close your accounts. Here’s how.

-Avoid taking on any new debt.

5. Set goals.

If you need help setting realistic, high-quality goals, sign up for 30 Days of Change– a free email course that will show you step by step how to turn your dreams into a goal and make your goal a reality.

Yes, I want to turn my debt-free dream into a reality!

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-Set a realistic goal for when you would like to be debt free.

-Set a goal for paying off your first debt.

6. Pay a little extra toward your debt each month.

You don’t have to have millions to make progress. Every little bit counts. Squeeze as much extra money as you can out of your budget. Before making a purchase, ask yourself, “What do I want more this (object) or debt freedom?” You’ll be amazed at how many “necessities” turn into wants.

Debt Freedom is not impossible.

It is also not easy. You need a good, solid, high-quality goal or reason to keep you motivated. Be sure you sign up for 30 Days of Change for a step by step plan to turn your dream of debt freedom (or any dream) into a reality.

You can do this. It will be worth it. All you have to do is jump in and get started.

Sign me up! I’m ready for change!

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Author: Vanessa

I am a free spirit who learned to use creativity as a key to success in chasing after debt freedom. I am a mom, lover of all things DIY, a little bit of a treehugger and modern-day hippy and an encourager to the core. If you need a little inspiration for your debt free journey, you’ve come to the right place.


  1. Living on less than I make is a goal of mine so I can pay down debt too. I commend you on how much you were able to pay off. Keep up the great and inspiring work

    • Thank you for your encouraging words! Living on less than you make is a hard adjustment to make in the beginning but very freeing. Realizing that you can get by without debt reduces so much stress-it is well worth the small sacrifices you may have to make to get there. Good luck! Let me know if there is any way I can help you figure out how to reach your goal.

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