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How I Paid Off $50K of Debt in Less Than 3 Years

03/25/2015 09:03 am ET | Updated May 25, 2015

By Christine DiGangi, Credit.com

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Graduating from college debt-free feels really good. When Ja'Net Adams got her degree from South Carolina State in 2003, she was one of those fortunate students who started her adult life without debt, and things went along really well for her.

She got married. They bought a house. They bought a new car. They had their first child. Then, in 2008, she lost her job.

Adams and her husband sat down to assess their financial situation, and they had to face a harsh reality: They had just lost nearly 75 percent of their household income, and they were $50,000 in debt.

"I'm a warning sign to people of what can happen after graduation," Adams said. She always considered herself a financially conscientious person, but their debt came down to some misunderstandings and a couple of bad decisions.

Her Strategy for Conquering Debt

Rather than focusing on the past, Adams and her husband immediately changed their habits so they could work toward a financially stable future. This time, when they sat down to figure out their debt, they also made what Adams calls a "Dream Sheet," a list of their short-, medium- and long-term goals, as motivation for sticking to tough changes they needed to make.

They tracked their spending for two weeks -- everything, down to a pack of gum at a gas station -- before reconvening and figuring out where to cut expenses.

It was easy to decide, even though it would be an extreme adjustment: No eating out. Get rid of cable. Reduce the minutes on the cellphone plan.

After about five months, she was working again, which was a serious improvement on their income of unemployment benefits and her husband's starting salary as a teacher. They also started working side jobs: Both went to college on athletic scholarships (tennis for her, basketball for him), so they made money coaching kids.

It took only 2 1/2 years from the point Adams lost her job for them to pay off the student and auto loans.

What She Learned

Adams, now 33, attended college on a tennis scholarship, and she thought her husband (they're high school sweethearts) was also free of student loan debt because of his basketball scholarship. It was only after they got married that she learned that he had $25,000 in federal student loan debt. They made the payments without issue, but looking back, Adams said they should have communicated and attacked the debt more aggressively.

Instead, they traded in one of their vehicles and got a new car for $25,000.

"We could have given that money to the student loan payment," Adams said she realized later. "We could be further along financially if we hadn't made those mistakes."

The other mistake? Building a home with a no-money-down mortgage. They could have saved a lot of money by staying in their $800-a-month apartment (two bedrooms, two bathrooms, utilities and cable included), rather than taking on a home loan with private mortgage insurance (not to mention the student and auto loan debt they could have tackled with their savings).

Even though they never had trouble making their loan payments, Adams said they could have been smarter about their finances, and they could have more in savings by now. Still, she's happy they turned things around when they did.

"I'm thankful for losing that job, because it set me on the path to where I am today," Adams said. She now owns her own financial consulting business, and she speaks to college students all over the U.S. and Canada about money and debt. She just wrote a book -- "Debt Sucks!" -- geared toward young adults. She may be thankful she lost her job, but the experience was "hard and devastating," she said. That's why she wants to educate others.

Going Forward Without Debt

Adams considers her family debt-free, even though they still have mortgage payments. At the time of her pivotal unemployment, she had just gotten back from maternity leave, and she made a vow to herself that her next child wouldn't be born into debt. She was able to reach that goal, as well as a few others.

They have revised their original Dream Sheet (which they laminated and keep on the refrigerator as a reminder of what they're trying to achieve through their sacrifices), and right now Adams and her husband are working to pay off their house in the next 10 years, as well as save so their children can go to college and graduate debt-free. One of their previous goals on the Dream Sheet was to build a savings account for their oldest son, and as he turns 7 this month, he'll add some of his birthday money to the account. Keeping their goals in the forefront of their minds has helped them stay on track.

They also realized they had to share their goals with others. That made it easier for them to stay on track, because their friends and family knew about their goal of becoming debt-free.

"There were some people who laughed at the time, but now they're asking me how to get rid of debt," she said. "It's taken the stigma off it -- we have to talk more about money."

Paying off debt not only frees you up financially, but can also help you build your way to good credit. Keeping credit balances low or paid off and making all debt payments on time can help raise your score over time. To see how your debt is affecting your credit, you can see your credit scores for free on Credit.com.

States With Highest Average Student Debt - TICAS - Class Of 2012