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.

These newlyweds paid off $20,000 in NEARLY 18 months

Like many students, Joanna and Johnny Galbraith relied on loans to help finance their education. Between a summer internship in New York City and earning degrees from Brigham Young University — Joanna’s in English with a minor in editing and Johnny’s in communications — the pair accumulated $20,000 in student loan debt.

Johnny and Joanna Galbraith try to track all their spending in real time.

As newlyweds and recent graduates, the young couple left Utah for New York a second time in 2010, with their debt in tow. But they were determined to create an attack plan and get out of the red. After 18 months of careful spending and expense tracking, the couple defeated their “debt monster.”

Joanna and Johnny have since co-founded an online business and share their insights and experiences on Our Freaking Budget, a financial blog for millennials.

Here’s how they tamed their debt, related to us via email and phone.

What was your total debt when you started your repayment journey?

Joanna and Johnny: Graduated with $20,000 in student loan debt.

What is your total debt today?

Joanna and Johnny: We made our final debt payment and zeroed out our loan accounts less than 18 months later in December 2011.

How did you end up in debt?

Joanna: Like most young Americans, we wanted to get an education and didn’t have the means to pay for it. I didn’t have financial aid or financial support from my parents, so I accrued a few semesters’ worth of debt prior to meeting Johnny and getting married while still in school.

We kept our modest newlywed lifestyle in check, but we were forced to take out additional student loans to cover the cost of a summer internship in New York City. Next thing you know, we were walking with our diplomas in hand and $20,000 of debt to our names.

What triggered your decision to start getting out of debt?

Joanna and Johnny: Once we got our first real jobs out of college, we felt a strange anxiety every time we’d get our paychecks and realizing that we technically owed that (and a whole lotta other paychecks) to someone else. We read Dave Ramsey’s “Total Money Makeover” and immediately felt an urgency to get the debt monster off our back. … We just really liked the psychological benefit of doing the debt snowball method for paying off our debt. It felt like we were having little victories along the way and it helped keep us motivated.

» MORE: Find out when you’ll be debt-free

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

Joanna and Johnny: Well, we did what any other indebted newlywed couple would do — move to the most expensive city in the country … kidding, but not kidding about moving to NYC.

Despite wanting to hunker down for the next 18 months in Utah where we could reap the benefits of a low cost of living and accelerate our debt repayment, Johnny got a great job offer in the Big Apple and we couldn’t say no. But that didn’t stall our getting-out-of-debt plans.

We found a cheap closet — I mean, apartment — walked or rode public transportation everywhere, brought lunch to work, met up with friends after dinner at expensive restaurants, and took advantage of every free cultural experience NYC had to offer.

… We were definitely tracking every cent. At the time it was on the computer and we would just record our expenses at the end of the day. Once smartphones started to be more of a thing that everyone had, we did start using an app called HomeBudget.

Nerd tip

Track your monthly expenses to learn where your money is going. Try to reduce spending on “wants” so that you can allocate more money toward necessities, savings and debt repayment.

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

Joanna and Johnny: We credit getting out of debt to budgeting. And every good financial outcome and opportunity can be traced back to that time of our life. It made us feel empowered and capable of putting money toward our retirement, children’s 529 plans, buying our cars with cash and even starting a business from savings. Money (or the lack thereof) no longer controls us. Now, we control our financial future.

What lessons or habits have stuck with you?

Joanna: We still try to track all of our spending in real time. We call it “active budgeting.” Also at the beginning of each year, we make a financial plan for ourselves, an overall picture of how much money we’re going to try and save and how much money we’re going to try to earn, and what we need to do to make up the difference between how much we hope to save and what our expected expenses are going to be.

What advice would you give to other borrowers?

Joanna: You’re not going to be perfect each month at [paying off debt]. There are going to be months where you feel like you really failed at your budget and you overspent or you lost track. … But just consistently trying and making sure you look at each month as a blank slate is going to ensure that you’re successful in the long run.

Budget your way out of debt

The Galbraiths say budgeting was the key to eliminating their five-figure debt. Follow their lead and build your own budget. NerdWallet recommends factoring in other goals, such as contributing to savings and retirement funds, while you pay down debt.

If you have student loan debt like they did, use a student loan calculator to estimate your monthly payments and work this amount into your budget. 

If you can’t prevent student loan payments from draining your funds, explore additional ways to find relief, such as:

  • Refinancing: This option can save you money by swapping your current loan with a lower-rate loan
  • A student loan repayment or forgiveness program: These programs adjust your payments based on your job or monthly income, if you’re eligible. However, these apply only to federal student loans.
  • Other options: Ask your lender about the repayment options available to you as a private-loan borrower

Have other debts? It might make sense to consolidate or combine several debts into one new one with a lower interest rate. A 0% balance-transfer credit card or a personal loan are two consolidation methods that can help you.

Lauren Schwahn is a staff writer at NerdWallet, a personal finance website. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.



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