How Mike & Jessica Paid Off $62,000 in Debt in 4 Years
A newlywed couple's journey from $62,000 in combined debt to complete financial freedom—with exact strategies, monthly budgets, and the surprising decisions that made it possible.
"We can't afford a honeymoon."
Those were the first words Mike said to Jessica after their wedding in June 2020. Between his $28,000 in student loans, her $22,000 in credit card debt from medical bills, and their shared $12,000 car loan, they were starting their marriage $62,000 in the hole.
By July 2024—exactly 4 years later—they made their final debt payment. Here's exactly how they did it.
The Starting Point: June 2020
The Complete Debt Picture:
| Debt | Balance | Interest Rate | Min. Payment |
|---|---|---|---|
| Credit Card A (Medical) | $8,500 | 24.99% | $255 |
| Credit Card B (Furniture) | $6,200 | 21.49% | $186 |
| Credit Card C (Misc) | $7,300 | 19.99% | $219 |
| Student Loans (Mike) | $28,000 | 5.8% | $305 |
| Car Loan (2018 Honda Civic) | $12,000 | 6.5% | $375 |
| TOTAL | $62,000 | — | $1,340/month |
Their Income:
- • Mike (IT Support): $52,000/year ($3,467/month after tax)
- • Jessica (Nurse): $58,000/year ($3,867/month after tax)
- • Combined Take-Home: $7,334/month
The Wake-Up Call:
"We sat down the week after our wedding and actually added it all up," Jessica remembers. "We knew we had debt, but seeing $62,000 written on paper? That was terrifying. And the interest—we were paying over $800 per month just in interest. That's money lighting on fire."
They made a decision that night: No more debt. Ever. And this gets paid off as fast as humanly possible.
The Strategy: Modified Debt Avalanche
After researching debt payoff methods, they chose the debt avalanche (highest interest first) with one modification: they kept a small $2,000 emergency fund instead of waiting to build it after debt payoff.
Their Attack Plan:
Phase 1: Kill the Credit Cards (Months 1-18)
Target the three credit cards in order of interest rate: 24.99% → 21.49% → 19.99%
Goal: Eliminate $22,000 in high-interest debt by December 2021
Phase 2: Pay Off the Car (Months 19-30)
Attack the car loan aggressively to free up $375/month payment
Goal: Car paid off by December 2022
Phase 3: Crush Student Loans (Months 31-48)
Snowball all freed-up payments into student loans until complete freedom
Goal: Debt-free by July 2024
The Budget: How They Found $1,800/Month
With $7,334 take-home and $1,340 in minimum payments, they had $5,994 left. They needed to find at least $1,500 extra for debt to hit their 4-year goal. Here's how they did it:
Monthly Budget Breakdown:
Essential Expenses ($3,500)
Debt Payments ($3,134)
Allowed "Fun Money":
The Sacrifices: What They Cut
What They Eliminated:
- ❌ Gym memberships ($80/month) → YouTube workouts
- ❌ Cable TV ($120/month) → Kept Netflix only
- ❌ Eating out 4x/week → Reduced to 2x/month
- ❌ New clothes shopping → Thrift stores only
- ❌ Expensive phones → Used budget phones
- ❌ Vacations → Free local activities
- ❌ Daily coffee shop → Home coffee maker
Combined savings: ~$1,200/month
What They Kept:
- ✓ Date night budget (2x/month at $50)
- ✓ Personal spending money ($100 each)
- ✓ One streaming service (Netflix)
- ✓ Birthday/holiday gifts (budgeted)
- ✓ Quality groceries (no extreme couponing)
- ✓ Their car (reliable, paid off early)
"We stayed sane by keeping some small pleasures" - Jessica
Income Boosts: Adding Fuel to the Fire
Year 2 & 3: They Got Creative
Mike's Side Hustle:
Freelance IT support on weekends (5-10 hours/week)
Added: $400-800/month → 100% to debt
Jessica's Night Shifts:
Picked up 2 extra 12-hour shifts per month (differential pay)
Added: $600/month → 100% to debt
Windfalls:
- • Tax refunds: $4,200 (Year 1), $3,800 (Year 2)
- • Work bonuses: $2,000 (Mike, Year 2)
- • Sold unused items: $1,500
- • Birthday/Christmas money: ~$800/year
Every dollar above → Straight to highest interest debt
Extra income strategy added ~$15,000 total to debt payoff over 4 years
The Timeline: Month-by-Month Progress
July 2020 - December 2021 (18 months)
Focus: Credit Card A ($8,500 @ 24.99%) → Paid off December 2020
Then: Credit Card B ($6,200 @ 21.49%) → Paid off May 2021
Then: Credit Card C ($7,300 @ 19.99%) → Paid off December 2021
✓ All credit cards eliminated: $22,000 paid off
January 2022 - November 2022 (11 months)
Focus: Car Loan ($12,000 @ 6.5%)
With credit card payments freed up, attacked car loan with $2,400+/month
✓ Car paid off November 2022: $12,000 eliminated
December 2022 - July 2024 (20 months)
Focus: Student Loans ($28,000 @ 5.8%)
Snowballing all freed payments: $3,000+/month to student loans
Mike got promoted in 2023 → $8,000 raise → Extra $500/month to loans
✓ Final payment July 2024: DEBT FREE! 🎉
The Final Numbers
If they had made minimum payments only, it would have taken 22 years and cost $41,000 in interest
The Lessons: What They Learned
Lesson 1: "It Tested Our Marriage—But Made It Stronger"
"We had fights about money. Big ones," Mike admits. "But we made a rule: we're on the same team fighting debt, not fighting each other. That mindset shift changed everything."
Weekly money meetings became their secret weapon for staying aligned
Lesson 2: "Small Pleasures Prevent Burnout"
"We tried going full scorched-earth for the first 3 months—zero fun spending," Jessica says. "By month 4, we were miserable and ready to quit. Adding back $100 each for personal spending saved our sanity."
Extreme deprivation doesn't work long-term. Build in small rewards.
Lesson 3: "Income Increases Accelerate Everything"
"The side hustles and extra shifts weren't fun, but they cut a full year off our timeline," Mike notes. "And my promotion in Year 3? That's when we really started crushing it."
Cutting expenses has a limit. Increasing income has no ceiling.
Life After Debt: What Changed
Their New Financial Reality
Immediate Changes:
- ✓ $3,134/month no longer going to debt
- ✓ Emergency fund built to $15,000 in 5 months
- ✓ Started investing $2,000/month in retirement
- ✓ Took their first real vacation (Hawaii!)
- ✓ Bought a house (20% down payment)
Long-Term Impact:
- ✓ On track for $1M+ retirement by age 55
- ✓ Planning to pay off house in 10 years
- ✓ Can afford to have kids without financial stress
- ✓ Never worry about unexpected expenses
- ✓ Sleep better—literally
"The freedom we feel now makes every sacrifice worth it. We'd do it all again in a heartbeat." - Jessica
Your Turn: Can You Do This?
If They Can, You Can. Here's How to Start:
- List all debts with balances and interest rates (use our debt avalanche calculator)
- Calculate your current minimum payments
- Find $500-1,500 in your budget (check our budget guide)
- Set up automatic payments to your highest interest debt
- Track your progress monthly and celebrate milestones
- Consider income boosts in Year 2 to accelerate further
Mike and Jessica started with $62,000 and average incomes. There was nothing special about them—except their decision to commit. That's all it takes.