How I Ditched Debt: Money Under 30

In this series, NerdWallet interviews people who have triumphed over debt using a combination of commitment, budgeting and smart financial choices. Their stories may even inspire you to pay off your debt. Responses have been edited for length and clarity.

David Weliver paid off $80,000 in debt in three years

Like many college graduates, David Weliver joined the workforce with student debt and a low salary. He was also carrying thousands of dollars more in credit card balances.

Weliver's first job, which was at a finance magazine, taught him that toxic debt doesn’t go away on its own. Still, he didn’t address his own debt until he faced a painful choice: pay rent or a credit card bill.

For three years, Weliver attacked his balances. He consolidated payments, reduced his cost of living, took a higher-paying job, and worked a second job. The Maine-based blogger created Money Under 30 to document his journey and show others how to tackle debt.

Weliver and his wife, Lauren, now live below their means to support a family and stay debt-free.

What was your total debt when you started your repayment journey and what is it now?

In 2006, I owed $80,000: $25,000 in student loans, a $15,000 auto loan and $40,000 on credit cards. Today, my only debt is a mortgage, with a balance of $350,000.

How did you end up in debt?

Part of the reason I got into so much debt is because things got financially hard for my parents around the time I was going off to college. That led me to take on more debt because I didn't want to ask them for anything.

I accumulated debt very slowly, beginning during my freshman year of college. I took out student loans, but my real issue was credit cards.

I carried a small amount of debt on credit cards, maybe $5,000, all the way to graduation. The payments were manageable, and I just figured I’d get a good job and pay it off after I graduated.

I eventually left New York for a lower cost of living and a better job, but then I needed a car and borrowed more money for that.

There was no one thing that put me suddenly into $80,000 of debt. It happened gradually, one bad decision after another. Eventually you get to this point where you say, “I’ve got so much debt already, what’s another couple thousand?”

What triggered your decision to start getting out of debt?

One month, things got so tight I was forced to make a decision between paying rent and paying one of my credit cards. After years of carrying obscene amounts of debt, it was the first time I couldn’t meet a payment obligation.

Ironically, while I didn’t see the issue with borrowing so heavily, I felt immense guilt about missing a payment. The magnitude of my problem became apparent, and I realized that if I fell behind, I would never catch up.

What steps did you take to reduce your debt? What resources or services did you use?

I wanted to lower my annual percentage rates, but my debt was so high I couldn't get approved for balance transfer cards. My credit union gave me a personal loan at a lower rate, but the loan wasn't very big, around $5,000. I also got a loan for around $12,000, enough to consolidate my highest APR cards.

I made the fixed personal loan payments, and whatever was left over I put toward the higher-rate APR cards, which I paid off before the lower-rate cards.

Did you make any other changes?

I moved out of an apartment I had by myself into a much cheaper place with a few roommates. I changed jobs twice, and my annual salary increased from $35,000 to $50,000.

I worked nights and weekends at Starbucks and started what’s now my full-time business, Money Under 30. I started the site to write about my journey recovering from debt and learning to be responsible with money, but eventually it began to earn revenue, which helped me attack my debt faster.

What was your biggest challenge paying off debt and how did you stay motivated?

The biggest challenge was this feeling of missing out on a lot of life, my 20s in a way. It definitely felt like I was sacrificing those years when friends would go on trips or hang out.

Eventually, I quit the Starbucks job and just focused on living frugally and working hard at my day job to try and get promoted.

It was not easy — I was working all the time. But once I got a little bit of momentum, it got easier. I was able to pay off all of my debt in a little over three years, and I’m very glad I got out of debt at the stage of life that I did.

How has your life changed for the better since you got out of debt?

When I was in debt I was incredibly anxious. I worried about money all the time. I met my wife, Lauren, in high school, but we broke up when I was repaying debt. During that period, my life did not support a relationship — I was stressed, and it definitely took a toll.

Fortunately, we reconnected at a different stage of life and it worked out. Today, being debt-free, I feel like I can do anything with my life. I’ll never have to say “no” to a once-in-a-lifetime trip or career opportunity.

How do you remain debt-free today?

My wife and I approach the big decisions in life — buying a house or a car — the classic “living below your means” way. We look at what we could afford on our incomes and then scale it way back. By doing that with our biggest expenses, we’ve been able to save more than a year’s worth of expenses.

How to tackle your own debt

Weliver hustled to ditch debt. A few simple steps can get you started, too:

• First, commit to paying off debt. You need the motivation to develop momentum and a vision of living debt-free.

• Build an emergency fund. Saving is crucial to paying off debt, because an emergency fund will give you breathing room and stop you from turning to credit cards for unexpected expenses. Five hundred dollars in the bank can keep many small emergencies at bay.

• Compare debt consolidation options, including balance transfer credit cards and personal loans.

• Pick a strategy. The debt avalanche worked for Weliver, but your situation could be different. Size up your debts and pick a payoff plan that works for you.