How I Paid Off $50,000 in Debt in 2 Years: My Journey to Debt-Free Living

How I Paid Off $50,000 in Debt in 2 Years: My Journey to Debt-Free Living

Learn how I paid off $50,000 in debt in 2 years with budgeting and side hustles. Start your debt-free journey now!

Debt can feel like a heavy burden, constantly looming over you, and for years, that’s exactly how I felt. I was $50,000 in debt, a mix of student loans, credit card balances, and a car loan. It seemed impossible to tackle, but two years later, I was debt-free. It wasn't easy, but it was doable, and if I can do it, so can you. This is my story, filled with lessons learned, strategies that worked, and how you, too, can climb out of debt.

The Wake-Up Call

My journey to becoming debt-free started with a harsh realization: my minimum payments were barely touching my balances. I had racked up over $25,000 in student loans, $15,000 on credit cards, and an additional $10,000 in a car loan. One day, after looking at my bank statement and realizing how much of my income was going toward interest alone, I knew something had to change.

The moment of clarity came during a casual lunch with a friend. She mentioned how she had just finished paying off her car loan early, and I was shocked. Here I was, making minimum payments on everything, while others were getting ahead. That conversation sparked something in me. I didn’t want to spend the next decade drowning in debt. I wanted financial freedom.

Step 1: Taking a Hard Look at My Finances

The first step in my journey was figuring out exactly where I stood financially. I knew I had debt, but I had never fully added it all up or considered how much interest I was paying. I sat down with my laptop, logged into all my accounts, and made a spreadsheet listing every debt, the interest rate, and the minimum payment.

Seeing the total—$50,000—was overwhelming, but it was also the push I needed. I knew the exact numbers I was dealing with, and it was time to make a plan.


Step 2: Creating a Budget

Budgeting was something I had avoided for years. It always seemed too restrictive, but once I faced my debt, I realized that budgeting wasn't a punishment—it was the roadmap to freedom. I started by tracking all my expenses for one month to see where my money was going. What I found was shocking.

I spent an obscene amount on dining out, subscription services, and little impulse buys that added up quickly. Once I saw the pattern, I knew I could cut back significantly. I created a bare-bones budget, cutting out everything that wasn’t a necessity. Here’s how I slashed my expenses:

  • Dining out: I started meal prepping and cooking at home, which saved me around $300 a month.
  • Subscriptions: I canceled multiple streaming services and unused subscriptions, saving another $50.
  • Impulse buying: I instituted a 24-hour rule for purchases. If I still wanted it the next day, I’d buy it. This helped me avoid unnecessary splurges.

With these cuts, I freed up an extra $500 a month that I could put toward my debt.

Step 3: The Debt Snowball Method

Now that I had more money to allocate toward my debt, I needed a strategy. After some research, I decided to use the debt snowball method. This method involves paying off your smallest debts first while making minimum payments on the larger ones. Once a small debt is paid off, you take the amount you were paying on that and roll it into the next debt.

For me, this method made the most sense because it provided quick wins, which kept me motivated. My smallest debt was a credit card balance of $2,000. By putting all my extra money toward that card, I paid it off in two months. The satisfaction of eliminating one debt entirely gave me the momentum I needed to keep going.


Step 4: Side Hustles and Extra Income

While budgeting and cutting back were essential, I realized that increasing my income would help me pay off my debt faster. I started looking for ways to earn extra money on the side. Here’s what I did:

  1. Freelancing: I picked up freelance writing and graphic design projects on platforms like Upwork and Fiverr. This added about $400 a month to my income.
  2. Selling unused items: I went through my apartment and sold clothes, electronics, and furniture I no longer needed. Over six months, I made about $1,500 just by decluttering and selling items on eBay and Facebook Marketplace.
  3. Part-time gig: I took on a weekend job at a local café, earning an extra $200 a month. It was hard work, but every dollar counted toward my goal.

In total, my side hustles added about $600 to $700 a month to my income, and I threw every extra cent at my debt.

Step 5: Staying Motivated

Staying motivated throughout the two-year journey was one of the hardest parts. The excitement of paying off a small debt can quickly wear off when faced with larger balances. To stay on track, I used a few tactics:

  • Debt tracking: I kept a visual chart of my debt and colored in each section as I paid it off. Watching the chart fill up was incredibly satisfying and kept me motivated. 
  • Financial podcasts: I started listening to personal finance podcasts to stay inspired and learn new tips. Hearing success stories from others reminded me that becoming debt-free was possible.
  • Accountability: I told a few close friends about my goal. They checked in on my progress and celebrated each milestone with me. Having accountability partners made a huge difference.

Step 6: Adjusting When Life Happened

Life isn’t always predictable, and I faced setbacks during my debt-free journey. There were months when unexpected expenses—like car repairs or medical bills—derailed my progress. Instead of getting discouraged, I adjusted my plan. I built a small emergency fund to handle these surprises, which allowed me to stay on track without going deeper into debt.


Step 7: Debt-Free!

After two years of hard work, side hustles, and smart budgeting, I made my final debt payment. The feeling was indescribable. I had been carrying that $50,000 weight for years, and suddenly, it was gone. My income was no longer tied up in interest payments, and I could finally start saving and investing for my future.

What I Learned

Looking back, here are the biggest lessons I learned from paying off $50,000 in debt:

  • Budgeting is essential: A well-planned budget was the foundation of my success. Without it, I would have continued to overspend and make minimum payments forever.
  • Small wins matter: Paying off smaller debts first gave me the momentum I needed to tackle larger balances. Don’t underestimate the power of a quick win. 
  • Earning extra money accelerates progress: Cutting expenses alone wasn’t enough. Side hustles and selling unused items helped me get out of debt much faster.
  • Motivation is key: Staying motivated, even when progress seemed slow, was crucial. I celebrated small victories and kept my eye on the big goal.

Moving Forward: Financial Freedom

Today, I’m debt-free, and my financial goals have shifted. Instead of paying off debt, I’m focused on building an emergency fund, investing for retirement, and saving for a house. The journey was challenging, but the freedom I feel now makes every sacrifice worth it.

If you’re struggling with debt, know that it’s possible to turn things around. It won’t happen overnight, but with a solid plan, discipline, and the right mindset, you can break free from the chains of debt and build a better financial future.

Remember, it’s not about how much you owe—it’s about taking control and working toward financial freedom, one step at a time.

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