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How Becoming Debt-Free at 25 Changed My Life

I first learned about using “debt as a tool” in my job at a bank, but there were some major pot holes in my new “road to success.” I used things like credit cards and car loans to “get ahead” and establish my credit. Sounds pretty normal, right? The problem was, I didn’t do anything else. Using debt trumped the importance of saving for emergencies, budgeting my monthly expenses, investing while I was young, and spending less than I made each month. Becoming debt-free was not on my radar.
How did things go for me?
Well, I spent the first half of my twenties working hard with very little to show for it. I had no budget, no long-term plan, no debt-free plan, almost no savings, and a glowing credit report.
I was missing some MAJOR pieces to a healthy financial foundation (basically all of them) and headed for disaster.
I even began investing in a mutual fund when I was 20, but without that foundation, it became my emergency fund and disappeared by the time I was 23.

books I recommend #1The Turning Point

When I was 24, my fiancé (now husband) and I signed up for Financial Peace University. It’s a 9-week course that teaches the foundations of personal finance. Since I always associated finances with my banking job, it was a new concept for me to think of them as personal.
What we learned in that class changed our lives forever. It set us on a path to becoming debt-free – an imperfect path that had as many mistakes as victories, but the results were far better than my reckless pursuit of the almighty credit score in my early twenties.

Becoming Debt-Free

Here is a list of 7 steps my husband and I took to help us on our journey of becoming debt-free when I was 25:

1) We learned how differently we felt about money. Turns out, my husband is a natural spender and I’m a natural saver. Before, he just seemed like an out of control bachelor spending his entire tax return check on a new guitar or amplifier. That’s partly because I associate money with security. Did either of us know any of that about ourselves or each other before the class? Nope. Did finding that out make a difference? Yep. A huge one.

2) We established an open line of communication. Once my husband and I realized some of our strengths and weaknesses regarding money, we created an open line of communication, talking regularly about what was working and what needed to change.

3) We set two big goals: When I was younger, goals weren’t so much my thing. Our first two big goals helped me realize how life-changing they could be: 1. Save $1,000 in an emergency fund ASAP. 2. Pay off all debt in just two years.

balancing life without feeling broke4) We learned to live within our means. Overnight? No. The most powerful thing we did was pay attention. We kept our receipts. We scanned our checking account activity. My husband started using to track our spending. I started learning price points at the grocery store so that we’d spend less. We learned to say “No.” I wasn’t a very big fan of that word in my early twenties. What a difference it made on becoming debt-free, though.

5) We created AND lived on a monthly budget. Gag, right? Hear me out…I tried budgets in the past, but my debit card was like a forget-me-stick, always causing me to forget every written plan as I’d swipe for the next thing and the thing after that. Aaand the thing after that. Be honest…does any of that sound familiar? Instead, my husband and I wrote out a cash flow plan and looked it over together. Then we did it again. And again. Taking that step and keeping each other accountable throughout the month made a big shift in our progress.

6) We made becoming debt-free the top priority. Instead of focusing intently on using a bunch of debt to build our credit score, we spent as little as we could, lived on my husband’s income, used my paycheck to chop away at debt, and kept our eye on the prize of no payments. I mean, could you imagine what it would be like to have NO payments? That’s what we kept telling ourselves. When it finally did happen, it was an incredible feeling.

7) We celebrated our victories. A common misconception about becoming debt-free is that you’ll never have fun again. There are lots of ways to have frugal fun and enjoy life together while you tackle debt. One of the most powerful incentives was our gift to ourselves after we paid off our last debt. While we were paying off the debts, we both did without smart phones. Once we got out of debt, we upgraded our “dumb phones” and purchased a Nintendo Wii. Then we played Mario Kart to our hearts’ content because we were raised in the 80’s and 90’s and that’s just what you do.

If my younger self could have realized how great it would feel to work hard toward a goal, achieve it, and celebrate, then I could have saved a lot more money in those early years.

No regrets, though. Life is full of teachable moments. My twenties are a direct reflection of that.

Why-Buying-a-House-WasLife on the other side of debt

Today, as I approach my 30th birthday, my husband and I live within our means, recently purchased a house (yes, that is debt, but we hope to rent it out in three years to re-coop some of our investment), regularly budget, invest every month, tithe at our church, and live on his income while I take care of the two children and work from home as a freelance writer.

We experience a lot less stress and a great deal more empowerment than either of us did in our early twenties. It’s not perfect, but I absolutely could not have gone through this change without my husband’s willingness and hard work.


When you recommend a credit card or car loan to a 19-year-old as a method of  “getting her started on the right foot,” I simply ask that you remember my cautionary tale. Remind her that there is more to know about handling money than building credit. Tell her budgets are sexy, emergency savings accounts will add 10 years to her life, and debt is as helpful as asking a Pokémon Go player for directions. 😉

What’s one powerful lesson you learned about money in your twenties? (The easy way or the hard way.) Share in the comments below.

Battle of the Mind Budget Get Out of Debt Investing Money Save Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. A lesson I learned was that it is so much smarter to buy a used vehicle outright than to buy new and make payments. I’ve bought both new and used vehicles and made payments. Then we wised up and began saving and buying used vehicles with cash. Now I cannot imagine making payments on a vehicle. Luckily we realized this 20+ years ago. It seems to have rubbed off on my son…he is 16, started a job in Feb., saved nearly his whole paycheck for several months, and paid cash for a used car (with $ left over for insurance and future possible repairs).

    • That’s awesome Renee! Sounds like you and Hubby are doing a fantastic job parenting!

    • I think some of the most powerful moments in my life are when I make a very intentional decision for myself, no matter how unpopular it may seem. Good for you guys to draw this line in the sand and ultimately reap the benefits.

  2. Hah! You know it, sister.

    • Couldn’t resist, haha.

  3. Congrats on the turn around! Learning these hard lessons early can definitely pay a rich dividend later.

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