A Road Map Out Of Debt

This post may contain affiliate links to products I’ve used and recommend. If you click on the link and purchase the product, I am compensated (at no additional cost to you). 

View my full disclosure here.

Let’s talk about debt. I personally found debt to be a shackle. I was a slave to the lender and most of my income was going out to pay other people back for things I already experienced or purchased. That is not a fun way to live.

If you want to build wealth or even just experience peace of mind financially, ridding yourself of debt is a great first step. This purpose of this article is to give you clear direction in achieving freedom from debt.

Spoiler alert 

When you owe nothing, you can choose what to do with your entire paycheck. It’s a pretty amazing feeling and if you’re like me where you learn to live below your means while paying off your debt, you’ll find it easy to continue that same pattern and become a serious saver/investor when out of debt.

I am going to talk about six areas to focus on if you are serious about getting out of debt:

  1. Dream
  2. Get on a budget
  3. Have an emergency fund
  4. Come up with a plan to pay off your debt
  5. Drive down your expenses
  6. Increase your income


Stop for a second and think about what you would do if you owned your entire income. Would you travel? Would you be an outrageous giver? Would you adopt children? Would you pursue a passion that you never thought possible?

Money is not everything but it certainly is a means to an end. Consider going to this article by JD Roth and watching his video on the power of purpose. I was fortunate enough to see his talk live at CampFI Mid-Atlantic and it was powerful.

When you have money, you don’t really have to think about money – meaning it doesn’t have to rule your life. My whole fascination in pursuing financial independence is that I don’t want to have to think about money. I want to be able to go where I feel God is calling me and not be limited by financials. 

Before you set on this journey, I challenge you to think about your why. Dream a little, actually, DREAM BIG! Now go get a pen and paper and write down your why. Put it somewhere you can look at every day. When you know your why, you will be able to make sacrifices in the short run.

Get on a Budget

This was really the first key for me in gaining control of my finances. I use, what Dave Ramsey, calls, a zero-based budget. I find it helps me meet my savings goals and know exactly where my money is going every month.

See this sample budget I created in Google Sheets. I input random amounts for each category. Feel free to copy and tweak for your specific needs. I created 9 categories for normal expenditures:

  1. Charitable giving – I tithe to my local church but this can be charitable giving of any kind. I also added an item called random giving. One of my new friends from CampFI, Shaheen, told me she has a random giving category for, you guessed it, random giving! I just implemented this since it sounds like fun. Shaheen shared that it has become her favorite kind of giving. 
  2. Savings (keep in mind this does not include any pre-tax savings you will want to take advantage of. Those items are typically taken from your pre-tax income through your employer.
  3. Housing
  4. Utilities
  5. Food
  6. Transportation
  7. Personal
  8. Recreation
  9. Debt Snowball

Column B is your monthly amounts for each of the items in the 9 categories

The amounts listed in cells C2 and D2 are your net (take home) pay which is after all deductions and taxes.

You will want to have your number of columns equal to your number of pay periods. In my sample budget, I chose two which is associated with a bi-monthly pay period.

If you have things that are due on specific days of the month, go through and subtract those in the appropriate column first. Next, you will divide the other items up in one of the columns until you have zeros at the bottom of the sheet in cells C55 & D55. The goal is to assign all of your money to a specific category.

When you have extra money that is when you either apply it towards a savings category or a debt in your snowball.

I set up the final column, E, so that it sums up the monthly amount minus what you budget (subtract). This should also equal zero. However, if you have extra money in your budget and pay extra on a debt or put more in a saving category, I set up a formula to turn that cell green (see example in cell E48). It’s kind of a cool way to see where you are “going” strong. Get it? Green for go. 🙂

Emergency Fund

Before you begin working on paying off your debt, you should probably have a small emergency fund of around $1,000. That is what Dave recommends and I have no problem with that. I will add that if there is unusual uncertainty with your career or particular life situation, you may want a bigger emergency fund. The point is if you don’t have one and you are in a big amount of debt, you’ll be tempted to go into a bigger amount of debt to fund an emergency.

I followed Dave’s advice and had a $1,000 baby emergency fund before tackling my debt snowball. Later in my debt pay-off-journey, I grew it to cover 6 months of expenses, but that is because I had the possibility of paying taxes on a foreclosed house. Case in point – different experiences, may call for different measures.

Side note, Dave does recommend that once you pay off your debt you grow your emergency fund to 3-6 months of expenses.  See his baby steps.

Debt Pay-Off Plan/Debt Snowball

Dave Ramsey recommends you pay minimum payments on all of your debts, then list them smallest to largest and attack the smallest one first. Once you pay off the smallest one, you roll that payment into the next biggest one; hence, your snowball. By the time you get to the biggest debt your snowball is BIG and you are making some serious progress.

Part of Dave’s reasoning is psychological. By starting with the smallest debt, you should be able to pay it off quickly. Being able to cross debts off the list can be motivating.  I followed this method. However, my biggest interest debts were also my smallest ones. Had that been different I may have arranged my snowball with the logic I’ll talk about next.

Many people in the FI (Financial Independence) community argue from the mathematical point of view. This type of reasoning will lead you to place your highest interest debt in the front of the snowball line.

I don’t care which reasoning you favor, just pay off your debt!!! However you use the snowball it will work, trust me. I paid off $46,763.37 in 3.5 years using a debt snowball (that includes a pause while my home was foreclosed on and I hired an attorney). 

Driving Down Your Expenses

This is the step that separates the boys from the men and the girls from the ladies. You have to get real with yourself on what is a need and what is a want. Here is a list of some things that you can consider downgrading on:

  • Housing – this is typically the biggest expense in our budget. Anytime we can drive this one down, we win.
  • Automobile/Transportation – the American way is to have a car payment but I suggest otherwise.
  • Cable TV – do you really need all of those channels?
  • Going out to eat – this can get expensive. Plus cooking at home can be way healthier!
  • Clothing – I don’t know about you but I have enough clothing to last a lifetime. I still don’t have a line item in my budget for clothes. If I need something, I add it to the budget. 
  • Hair & nails – this is mostly for the ladies. I stopped highlighting my hair while I was in the debt pay off phase and only had it trimmed for $7.99 every several months. I wanted freedom more than I wanted blonde streaks accenting my face (which I do love, BTW). I also do my own pedicures. 
  • Entertainment/Hobbies – I gave up my favorite hobby (skiing) while paying off my debt. There are a lot of fun, inexpensive ways to be entertained – how about board games with friends? Intramural sports? Do you love to read? Me too and while I do own a lot of books, the library is a great resource for this hobby!


I could and will write a whole post on this expense but for the sake of this article, I simply want to say, be open. I lived creatively in the last four years by living in 1st.) a ministry house and 2nd.) with my parents. Both options reduced my housing costs greatly and allowed me to expedite my debt pay off.


The only other expense I am going to expand on is transportation/automotive. I must admit, that I bought my first new car at age 18 and had car payments, minus a three-year stint while living in Colorado, for the next 22 years of my life. This habit of buying new cars robbed me of the opportunity to build wealth. The ChoosFI podcast has an episode on True Cost of Car Ownership. It will blow your mind and challenge you to think differently!

So I included my car payment in my debt snowball, paid it off and later added a line item in my budget for car savings.  My car is 10 years old with 184k miles but is running strong because I’ve maintained it. Once it dies, I will buy my next car used with cash. If I was able to change my perspective and habit, you can too.

Does your transportation even need to be a car? When I lived in Colorado for three years I didn’t own a car. I biked and used public transportation. It is possible to not own a car and Uber and Lyft make it even easier nowadays.

Either way, I challenge you to be cognizant of your transportation method and think outside of the box. Besides housing, transportation is typically the next biggest expense. If we can drive (I couldn’t resist) this one down, we can save some serious dough.

I just moved to a little apartment which is in a close vicinity to my job. I now actually walk to work! I still have my car for other things, but not driving to work 5 days a week, has reduced my gasoline consumption and the wear and tear on my car greatly.

I could go on and on here but I want to make one thing clear. This is not about deprivation but rather being creative. I made some dramatic sacrifices in my debt pay-off-journey, like moving in with my folks for a year and a half. Since I was willing to do the big things, I figured I might as well do the little things too. They add up.

Now that I’m out of debt, I’m still frugal in the effort of becoming financially independent. Since a lot my sacrifices were extreme, I have added more things back into my budget. Owning my entire income gives me choices. There are two key things I think about now when adding something back into my budget:

  1. What is the opportunity cost?
  2. Does it truly bring me joy?

The blessing of being frugal and learning to sacrifice is that it taught me that my joy comes from relationships, not stuff. 


There are two sides of the equation: what is coming in minus what is going out. All of the above suggestions focused on driving down the outgo; however, increasing the input is certainly a viable option!

Sacrificing your time to increase your income may not be sustainable for the long term but it certainly can be an option in the short run. If you cannot increase your income at your main job by career hacking, perhaps you can get a part-time job or side hustle. I did the former and increased my earnings.

I found that when I was disciplined to the goal of paying with off my debt, God blessed me time and time again.

When thinking about increasing your income, there are other things to consider, like schooling or training. However, I am a fan of simple working hard and smart where you are. These things are often rewarded by good employers.

In closing, I want to say the most important thing is to get on a plan. My roadmap shows what worked for me but there is an infinite number of ways to do it. My main advice is to choose a plan and stick to it. Intentionality will take you far. Also, find fun ways to track your progress as this will help in the motivation department.

In case you missed it above here again is the link to the sample budget I created for you to copy and tailor to your own situation.

Cheers to you and your journey!! I’d love to hear about your progress, plan and/or questions in the comments…