How to Erase $70,000 in Debt

In early 2006, Jaime Tardy, 29, of Turner, Maine, resolved to wipe out $70,000 in debt as quickly as possible so that she could quit her job and start a family.

In early 2006, Jaime Tardy, 29, of Turner, Maine, resolved to wipe out $70,000 in debt as quickly as possible so that she could quit her job and start a family. By April 2007, she and her husband were debt-free -- and had $23,000 in the bank.

How did you rack up $70,000 in debt? I had two student loans totaling $26,180 after graduating from the Rochester Institute of Technology, and my husband, Matthew, and I took out a $24,560 home-equity loan to cover a portion of the down payment on our house. The loan had a variable interest rate, so it was as bad as credit card debt. We also had a $19,300 car loan.

Why did you decide to pay it off? Paying off the debt was the first step toward reaching my goal of working from home part-time and starting a family. Having a reason to pay it off that was bigger than myself made it a lot easier to make the sacrifices. Once we were ready to take the leap, we wanted to do it as fast as possible because getting out of debt isn't fun.

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How did you do it? We traded in the new Honda Civic that we had bought two months before for a used Jeep Cherokee, and we sold our other car. We canceled our cable and got a cheaper cell-phone plan, and we budgeted only for necessities and $25 a month each for spending money. We found better deals on homeowners and auto insurance.

Surely a strict budget can't account for everything. We took on extra work to bring in more income. In my job as project manager for a video-on-demand company, I was paid $40 more a day to work on-site with cable companies. So I traveled a lot and worked 70 hours a week. My husband, who is a performing artist, was doing Web and graphic design on the side. We made $140,000 in 2006 and lived on about $40,000 of our post-tax income.

Did you get any help? I read every personal-finance book I could find. And I called personal-finance radio host Dave Ramsey during his show for advice. I had enough money in my bank account to pay off our last loan -- we owed about $23,000. But I was due to have a baby in December, and I didn't want to part with that money. He suggested we keep the savings in case we needed it for medical bills.

And you were able to quit your job? I went back to work for a little more than two months after my maternity leave, then quit my job and paid off the last loan in April 2007. And we still had $23,000 in the "baby fund."

What's your next goal? Someday, I'd like to have a net worth of $1 million. You might as well aim high. Each year I figure out what I need to do to push toward that goal. I'm making good money working part-time as a business coach for entrepreneurs, and Matthew's income has gone up every year. I write about it on my blog,

What's your best advice? A lot of us think we have to have jobs we dislike because we need the money, but that puts money in control instead of you. Figure out the life you love to live, then make your million.

Read more stories of financial success:

How to Build a $1 Million Business

How to Stash $1 Million+ in Savings

How to Pay for College on Your Own

Lisa Gerstner
Editor, Kiplinger Personal Finance magazine

Lisa has been the editor of Kiplinger Personal Finance since June 2023. Previously, she spent more than a decade reporting and writing for the magazine on a variety of topics, including credit, banking and retirement. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.