When my wife and I graduated college 5 years ago, we entered the working world with a little over $75,000 in debt. Like many in our generation, that number mostly consisted of student loans and some auto loans. “Normal debt” as our culture has come to call it.

But here is the the thing about debt – it’s not normal.

We think it’s normal because banks, auto companies, and retail stores spend money on marketing financing options. We think it’s normal because the people who use debt say the predictable “you’ll always be in debt” line to make themselves feel better. And we think it’s normal, because if you look at the statistics, most people are in debt.

If you look at the reality of living with it though, you’ll see why debt is nothing more than a tool for building stress and materialism in your life. 

Here is what we know about debt:

  • You are more likely to purchase items you can’t afford.
  • You are more likely to spend more money than if you were paying cash.
  • You are less likely to think over a purchase, likely purchasing items you don’t need.
  • Monthly payments tie up your monthly budget, reducing your cash flow and options.
  • Somebody owns your debt, and can come after you for missing payments.
  • Excessive debt can cause psychological stress.

Debt Free Living is Simple Living

Understanding that debt is against simple living is important.

How simple your life is will be determined by how many “needs” you have, your freedom to make decisions, and control over your own future. Debt limits all of these factors by either the payment plans that follow a purchase, or the overconsumption that it encourages.

If you are truly looking for a simple life, being debt free should be a one of your goals.

How To Get Out of Debt

Between the burden that our debt placed on our monthly budget, and our goals of wanting to start a family in a couple of years, my wife and I knew that we needed to get out of debt. We wanted to live a simple life, and debt was not apart of that picture.

Immediately following graduation, we began aggressively paying down our debt. It wasn’t “fun”, but it was incredibly satisfying. It took just about 2.5 years, and we were finally debt free. The skills we learned to get out of debt have enabled us to continue on to build our financial net worth and give us more options in life.

Here are the 5 steps we followed kill our debt:

  1. Debt-Free Mindset – The first and most important part of getting out of debt is to change your mindset. You need to hate debt. Understand that it is holding you back, and that it is something you don’t want in your life. It’s limiting you.
  2. Plan Your Attack – Organize your financial life by doing a review of what you own, and what you owe. Write down all of your debts and assets to start organizing your attack. Once you have all the information, plan the attack. I recommend the snowball method, also advocated by Dave Ramsey, of paying down your debts from smallest balance to largest. Each time you pay off a debt with extra payments, roll those payments into the next highest.
  3. Monthly Budget – Your monthly budget tells your money where to go. Budgeting is critical for getting out, and staying out, of debt. By assigning tasks to your money, you are going to be able to more effectively use your resources to pay down debt. For more info on budgeting, visit my post on how to do a simple budget.
  4. Increase The Intensity – Somewhere about a year into paying off our debt, we ratcheted up the intensity. When you start making progress on paying off debt, you realize the freedom that comes with it. With progress under your belt, continue to squeeze money from your budget, and increase your income.
  5. Stay Debt Free – Way too many people become debt free, then fall back to the usual “I can afford that payment” mentality. You need to continue having a debt free mindset, and not even consider financing as an option for purchases (except a house).


  1. Don
    February 10, 2018

    I have found budgets don’t work. Setting up a bunch of categories and assigning a bunch of money to each detracts from the ultimate goal. Simple rules work best, such as…pay yourself first, live well within your means, buy used, eat real food, get up and walk, no more than three years income for a house, no more than six months income for a car, pay with real money, make your needs few and supply them yourself. Be gentle toward others. The debt relief may take a little longer, but think of the reduced stress, and pride in the accomplishment. Have a great day!

    • James
      February 12, 2018

      Don, I have friends that fall into the same category as you. They are naturally frugal, or “fiscally intelligent”, people that can abide by sound financial principles by default. I still think a budget is useful, but there is a less impactful benefit for somebody who is already on a good financial path.

  2. Robert Sadler
    February 15, 2018

    I’ll be honest. I’ve never found budgeting to be very helpful in getting out of debt. I’ve found budgeting more useful in avoiding debt. But every time I’ve gotten out of debt its been because of a large balloon payment – a bonus or a windfall or some kind that I use to pay off a lot of debts.

    I hate debt but sometimes its unavoidable. My debts have always accumulated when I have been unemployed for a while. In my view the best way to get out of and stay out of debt is to increase your income and get control of your income.

    • James
      February 16, 2018

      No doubt that increasing income can help with paying off debt. That said, there are many high-income households who are still bogged down with debt.

      While budgeting might not work with everybody, it’s an effective way to have some intentionality with the money you make.

  3. Secret Agent Woman
    February 24, 2018

    I came to this post via the link in your most recent one about not buying shit you don’t need. I have to admit, I’m not a budget person. But I’m frugal and a super planner in other ways. When I remarried in 2016, my husband had credit card debt and I made paying it off a priority. Last year I designated as our “Year of Financial Solvency” and set 7 goals which included paying off that debt, funding retirement accounts, and so on. We met every one of them and are on track for wrapping up the mortgage in a couple of years. But I just can’t make myself do a budget. I believe that it is a useful tool for many people, but I guess since I’m so disciplined with my money, I just don’t need it.

    • James
      February 26, 2018

      Congrats on your success! You are proof of the power of intentionality (laying out a plan and following through). While I do know people that are naturally frugal and don’t budget, I still recommend budgeting to everyone. Just like you are being intentional with your financial goals, a budget is how you are intentional with every dollar that you earn.

      Check out my post on budgeting about doing a zero-based budget. I also HIGHLY recommend using a program like YNAB, which is mentioned in the bottom of the article – https://simplelivingdaily.com/how-to-do-a-simple-budget/

      A very important result of budgeting is that it makes it much less stressful to spend money. When you budget for things, you can spend guilt free, save for rainy days, and get a realistic picture of your cash flow.


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