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How We Paid Off $124,000 in Debt in 3 Years and Became Completely Debt-Free

In the summer of 2013, my girlfriend, Caroline, and I were drowning in debt. How much debt? $124,000 spread across six credit cards, a car loan, and student loans. We never could have imagined being debt-free at that time.

I wrote a bit of my debt story and the steps we took to start getting out of debt in this other article. Here’s an excerpt from that explaining where my business debt (over half of my debt) had come from:

I want to be clear that I didn’t get into overwhelming debt overnight. I also wasn’t buying extravagant things. My business had monthly operational costs. These costs ranged from salaries, design/development expenses, advertising/marketing, and countless products and services that kept everything organized. Over the course of a year, I went from $12,000 spread across two credit cards to nearly $100,000 across six different credit cards.

These were our specific debts and and where they came from:

  • Jason business debt: $72,328
  • Caroline business debt: $6,764
  • Caroline student loans: $20,208
  • Volkswagen Tiguan lease payoff: $24,794
  • Total debt: $124,094

I want to point something out before I move a step further. I remember the visceral feeling I had looking at these debt numbers in 2013.

I was ashamed. I was embarrassed. I was disgusted. It felt like an insurmountable mountain to climb. If you’re currently battling with debt and having similar feelings, those feelings are completely normal.

We could’ve given into those feelings, and resigned ourselves to being in debt forever. But we decided to do something different: It sounds weird, but we gamified our debt reduction, much like Mario in the original Donkey Kong. Each ladder we climbed and every barrel we jumped over was another chunk of our debt we were getting rid of.

Donkey Kong Debt Jason Zook

A short disclaimer before we go on…

I’m not an accountant. I’m not a debt specialist. I’m not a certified anything when it comes to money. I’m just a guy who ran an online business and got into debt. I have a girlfriend who had student loan debt from college. We had a car payment we loathed paying each month. We, as a couple, sat down and created a plan to get out of our debt (along with some outside financial advisement, which we’ll get to). You know, so, like, don’t sue us. ?

A quick recap of Debt Part 1

In Part 1, I outlined seven steps we were taking to start “clawing our way out of debt.” I used the term clawing then, and I stand by it now. Getting out of debt is a battle. It’s a war. And the sooner you can view it as hand-to-hand combat with razor sharp weapons (or a game of Donkey Kong for a more friendly metaphor), the quicker you can change your perspective on how you view your debt. Changing the way we looked at our debt put us back in control. As Gary Vaynerchuk says:

Cash is oxygen.

I remember what it felt like every single day thinking about my debt. Thinking about all that money I owed. It weighed on me. It made me feel physically ill. I lost a ton of sleep over it. Not having money can literally rob you of oxygen. We were tired of being robbed.

The steps we took to get started are what I wrote about in that first article:

  • Drawing our line in the sand (stopping the bleeding!)
  • Changing our mindset (what do we actually need to be spending money on?)
  • Writing out all of our debt in one place (this was really important)
  • Reassessing our expenses (where could we save money?)
  • Making difficult phone calls to credit card companies (asking for hardship cases)
  • Building a get-out-of-debt plan (how we’d be paying down our debt and when)
  • Working with a wealth management specialist (which is where we’ll pick up below)

That gives you a quick catch-up on where things sat as we committed to reaching Donkey Kong and kicking him off his debt-inducing pedestal (read: paying off all our debt).

A humbling phone call ignited the fire

Once you start racking up credit card debt and carrying balances for awhile, your information gets sent to a bunch of assholes, er, credit card consolidation companies. I’m going to avoid going on a rant about how ridiculously horrible this is, but it happens.

Day after day and week after week, we would get letters in the mail. Letters that looked like they were from real companies who actually wanted to help. I remembered a friend of mine worked for a debt consolidation company while in college and I gave him a call to chat about this option. He mentioned that most of these companies were scam artists, but there were good companies out there who would essentially just buy out your debt and they’d make money of the interest you’d be paying them. Totally shady and gross, but I understood how that could work. That friend recommended a company I should call, and call I did.

Do you remember what it felt like when you were a kid and you did something wrong? Maybe you broke a family heirloom or got in trouble in school. Remember that feeling of having to tell your parents you messed up? The guilt that carried? The nervousness you had? Those exact types of feelings came over me as I started dialing the phone to the debt consolidation company. And when an actual human got on the line? That was the moment you admitted your wrongdoing to Mom.

While on this incredibly humbling phone call, I can recall feeling worse and worse. Tight pains in my stomach as the guy on the other end talked about allowing credit card payments to go delinquent. A slight tremble in my hand as he mentioned there might be legal action taken and that my credit would get dinged pretty badly.

Somewhere in the middle of that completely awful phone call, I just stopped listening. Not because I went into hermit-crab mode, but because every option he was explaining about the debt consolidation process felt like I was giving up. Like I was letting my debt win and giving up control. Sure, I heard the options about reducing our debt, and a lower monthly payment, etc. But his words slowly morphed into the sounds of the teacher on the Charlie Brown cartoon:

Womp, womp, womp, American Express, womp, womp.

This was not the option for us. We probably could have had less debt in the long-run, but I just couldn’t bring myself to go down the debt consolidation road. It sounded too icky and just getting on that call ignited a fire that I needed to get aggressive with our debt. (In hindsight, I’m grateful I did the call for this unintended outcome).

Building the plan of attack with our financial advisors

Before I get going on this part of the story, I have to mention that I always thought of financial advisors as crusty old men who wore those bright green visors you see in paintings that involve games of poker. Maybe there would be cigars involved, but most certainly, being $100,000+ in debt didn’t qualify to talk to financial advisors.

Funny enough, that’s what most financial advisors help with. Because debt runs so rampantly through our country, most “wealth management specialists” and “financial advisors” don’t start out just investing people’s extra cash. They get their finances put in a nice row, and they help eliminate all debts.

Quick aside: We met our financial advisors through a friend who had mentioned they were A. not crusty (in their 30s actually) and B. really awesome people. We were hesitant, but set an in-person meeting at our favorite coffee shop—if the meeting sucked, at least the coffee would be good! The meeting was great. Way more laughs than expected. Oh, and an interesting tidbit is our financial advisors charge 1% of total yearly profit or nothing at all if we use a couple different products they offer for investment (which cost us and them nothing). I’d highly recommend reaching out to people you know who use financial advisors to find non-crusty people.

When we first sat down and talked to our financial advisors, I didn’t feel like the kid who’d broken Nana’s vase she brought over from Norway and fought to keep while going through check-in at Ellis Island, but I didn’t feel great (side note: My great, great grandmother did come to the states through Ellis Island, from Norway). However, I wasn’t going to let pride get in the way. That was, in fact, part of how we got into our debt situation in the first place. And as I mentioned from the first article, that was a big part of attacking our debt: putting pride aside.

As quickly as I explained our debt situation, there was almost immediately a plan of action laid out in front of us. It was probably naive of me to think we were the first people they’d ever talked to who were in debt. But hey, when you’re in debt, it feels like you’re seated in a restaurant with only one table. What you can’t see, and what I failed to see, is that this restaurant actually has more tables than 10,000 Chili’s restaurants combined. Lots of folks are in debt, and very similar debt to what we had.

So what did this plan look like? Interestingly enough…

  • Organize all debt in one place, so you can see it all
  • Identify credit cards with the highest interest rates and attack them first
  • Figure out if you can transfer credit card debt into new 0% APR cards
  • Build an income flow that focuses on attacking debt, while still allowing for oxygen

If you remember back to the seven steps I mentioned before, we’d actually already done a few of these. I remember our financial guys being impressed with the Debt Sucks Spreadsheet that Caroline created. You can actually make a copy of our Debt Sucks Spreadsheet here.

The best 0% APR cards we found: Discover it card and Chase Slate card. I’d highly recommend checking out NerdWallet for more info and how to apply for these cards.

Debt Sucks Spreadsheet

The one thing that stood out to us, and that would become critical to our success in our war on debt, was building a better income flow.

What do I mean by that? I mean organizing our bank accounts and our separate income sources into a more logical and systematized process. Essentially, here’s what we did:

  1. Established our bare minimum monthly household expenses
  2. Established our bare minimum monthly business expenses
  3. Created a monthly schedule for transferring all excess income to a new account
  4. Scheduled weekly budget meetings for Caroline and me
  5. Set goal numbers of how much debt we could pay off each month

It’s not rocket science, and I felt like we already had some semblance of a household budget, but using this new process was incredibly helpful. I also want to go one step further and share a diagram that outlines our income flow (yay, visuals!):

Bank Account Flow

One of the most important parts of this new financial flow was the new bank account (aka Debt Crusher) that we couldn’t quickly see in our main bank account. Because our business and household accounts are all with the same bank, when we introduced an outside bank it changed things. That money became completely separate money, which felt much easier to part with when we used it to pay off our debts.

Weekly budget meetings became our most important weapon

You know what sucks about debt? Talking about it often. But you know what helps get rid of debt? Talking about it often.

My girlfriend and I decided to start having weekly meetings about our financials. I give her full credit for forcing me (especially early on) to sit down and have these meetings. At first I really didn’t enjoy having a weekly budget meeting. Not much would change from the week prior, and it felt like I was just admitting to all my embarrassing money faults every damn week. But that changed. As weeks went by, the weekly meeting changed from a chore to something we would look forward to because we could see progress happening.

It’s not an exaggeration to say that we had 150+ discussions about our financial situation from June 2013 – June 2016.

Some of those included our financial advisors, but we committed to getting out of our debt and had to put in the work (and difficult conversations) to make it happen.

During these weekly meetings we’d look at our income and expenses. We’d make sure we were honest about spending and have discussions about any bigger purchases or bigger debt payoffs that we wanted to make. We never set an official agenda, so some meetings were pretty short, and others went longer. Many of the weekly meetings (still to this day) are bigger discussions about where we see our financial situation going and making sure we’re doing everything right to avoid getting in debt again.

I can clearly remember being blindsided by random bills, business expenses, or even income before these weekly budget meetings. Now, I feel like I’m in complete control of the flow of money coming in and out. It feels really effing great.

There will be difficult conversations about money

Money sucks. If I’m being honest, and a little bit of a hippie, I wish we didn’t need money. It always complicates things and it causes lots of trouble (related: We Can Do Better).

There were times when I had to ask my family for financial help (thank you, family!). There were uncomfortable phone calls to credit card companies to ask for hardship cases. And there were, most certainly, some tense moments during the weekly budget meetings with Caroline.

Talking about money, especially money owed, is not fun. But like anything else, the more you talk about it and actually do something about it, the easier it gets.

Momentum moves money mountains

Around the beginning of 2015, we had stashed enough money in our Debt Crusher account to pay off a credit card that had the highest interest rate. This was a CitiBank card with a 21% APR and a balance of over $14,000.

It was during one of our weekly budget meetings when Caroline and I hunched over my laptop. We logged into my CitiBank account. We clicked “Make A Payment.” We selected the magical option of “Pay Total Balance” (an option we hadn’t be able to select for many years). And we hit Submit.

What a glorious feeling that was. Up until that point, we’d only felt the mundane feelings that come along with paying minimum monthly payments. Yeah, some of those payments had a little extra thrown in here and there, but none of them were as satisfying and motivating as paying off an entire balance. I’d liken this to finally beating that one really difficult level of Donkey Kong where he not only throws barrels, but he starts throwing them rapid fire. Beating rapid fire Donkey Kong barrels proved to us that we could finally rescue our debt-free Princess.

The little celebration we did led to getting even more focused about wanting to pay off our debt as quickly as possible. We wanted to select all the “Pay Total Balance” buttons on all our debts. We couldn’t make it happen at that moment, but we’d stoked the fire to make it happen.

A few decisions we made that helped us have more money to pay down our debt

Getting rid of mortgage and renting a home

I could write an entire article on why buying a home is a terrible financial investment. I’ll let the economic crash of 2008 do the talking for me. Instead, let me explain why renting (aka: “throwing money away”) was so great for helping us pay down our debt faster.

When you have a home with a mortgage, as I did for 8 years, you don’t have stable expenses. What do I mean by that? Oh, how about the air conditioner going out, to the tune of $8,000? How about the piping under the living room leaking, amounting to $2,000 (even after insurance)? Or how about the $20,000 “invested” in redoing the kitchen and bathroom which was never actually recouped. Not to mention every stupid little thing that pops up and needs to be fixed (and paid for) when you own your own home.

Deep breath Jason, deep breath.

When we moved to California and chose to become renters, we knew one very important thing: There are zero unexpected costs when it comes to renting. We’d never have to worry about an $8,000 air conditioning system. We’d never have to worry about little odds and ends to fix. We would pay our rent every month and that was it. Every dollar we saved could go to aggressively paying off our debt and not worrying about an impending air conditioner explosion (it didn’t actually explode, but you know what I mean).

I believe renting can be the best thing for people who are in debt. It’s a completely predictable expense every month, and you are guaranteed NOT to lose money in the long run. A home you buy? Yeah, good luck with that investment.

Sacrificing a 15-year passion: Cars

I love cars. LOVE them. They’ve easily been my biggest money-pit, aside from a stupid house I bought. But cars are also horrible investments.

Aside from my mortgage and food, my monthly car payment was always my highest expense. Over the years I had car payments ranging from $300 per month to as high as $1,200 per month—the latter being the time when I needed to own a Porsche Cayenne Turbo as a 25 year old. Not to mention extra costs like insurance, maintenance, etc.

When we decided to attack our debt, I knew my “fun car” hobby had to take a back seat (get it?). We leased an affordable Volkswagen SUV, a very adult and financially sound decision. Again, something with predictable expenses, that would allow us to put more money towards our debt.

I’d be lying to you if I said I loved driving a VW SUV in the beginning. Truthfully, I loathed it. It’s absolutely not a bad car by any means, but it’s a huge difference from the BMW M5, Porsche Cayenne, Infiniti G35, etc I was used to. But I just had to keep asking myself: “Do I want to feel cool driving around in a nice car, or do I want to feel really great about my financial situation and rid my life of debt?”

It also helped me get over my love of cars when I finally convinced myself that cars would be around for many years to come. If (and when) we got in a much better financial situation, I could have a fun car again. I’m looking at you, Tesla Model S or Model 3.

Building and selling a lot more business stuff

If you’ve been following my business adventures since 2013, then you know I’ve been working pretty damn hard. But it’s not just how hard I work, it’s focusing on more profitable ideas. Things that cost less to make, like digital products (online courses, software, etc).

I can honestly say that I haven’t done anything I didn’t want to do in the past few years, but some business ventures were done because I knew they’d have a solid profit and I could apply that directly to my debt. My BuyMyFuture project is good example of this: 165 people bought my future for $1,000 per person. It cost me around $50,000 to make that project happen, and I was left with $115,000 to live off of and use for taxes and debts.

I have to shout out to Caroline here as well. She hunkered down and cranked out a handful of profitable projects as well. One resulted in over $30,000 in profit, which helped us completely pay off our VW SUV after the lease ended.

Here’s Caroline whispering to the Wells Fargo mascot “Nellie” that we were paying off our lease:

Caroline Winegeart Debt Payoff

And the final payoff wire transfer:

VW Payoff

We’ve worked incredibly hard the past few years, but we also really wanted to beat that final Donkey Kong level as quickly as possible…

Paying off our final credit card

The day I wrote this article was the day we paid off our final credit card. The day we jumped over that final debt-filled barrel and kicked Donkey Kong right in his credit-card-loving face.

I simply can’t type enough words to explain how great it feels to be debt free. That $124,094 used to make me feel shamed and disempowered, but I’m now insanely proud.

That final card was carrying a balance of $9,639. When we paid it, we immediately grabbed a phone and took a selfie (which, obviously, needed emojis added to it).

Final Debt Payoff

Credit cards paid off

Being 100% debt-free is a feeling like I’ve never felt before. It feels like so much more is possible in life. It feels like we’re in control of the decisions we make. It feels like we’re breathing some really sweet, sweet oxygen these days.

If you’re currently in what feels like insurmountable debt, you can get out.

It’s not going to happen overnight, and it’s not going to be easy. But if you can learn from some of the things I’ve shared in this article (and the original one), I believe you can reach the top of your game of Donkey Kong and come out victoriously debt-free as well.

This is the end of the yellow brick road. If you want to read more articles mosey on over yonder.