Living Beneath Your Means: How Two 23-Year-Olds Paid off $30,000 in Debt in One Year

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Today I have a phenomenal guest post from one of my readers and long-time friend, Laura Cooper. She and her husband live near Denver, Colorado and have paid off a ton of debt in just a year! She’s here to tell their story and how they did it. 

I will never forget the very first moment we added it all up. My student loans, plus my fiance’s. As we looked at the final number, my eyes grew wide and filled with tears. $90,000 in debt? What were we going to do?

My then-fiance and I are both financially responsible, risk-averse, wise people. We dislike debt, work hard, and save money. But private college is EXPENSIVE, and a story like ours is not unusual for people our age.

We got married in July of 2016, saddled with this huge amount of student loan debt, with one goal: Pay it off! After just one year, we’ve hit a significant benchmark: we have paid off $30,000 of our loans!

And guess what? We’re not rich! Our combined income is around $75,000 a year (pre-tax), so we had to design our budget so we were living on 40% of what we earned. And now we’d love to share some of our tips and tricks on how to live beneath your means.

One quick disclaimer: Both my husband and I are fortunate to have bachelor degrees and good jobs right out of college, plus, we don’t have children yet. I know many people living in paycheck to paycheck situations for various reasons, and I recognize that not everyone has the ability to live on less than half of what they make! However, I still believe that the following strategies and principles can be helpful whatever your situation – there’s always room to tighten something in the budget.

Part 1: Set Yourself Up For Success

Living beneath your means requires discipline. If you’re going to be successful in motivating yourself to achieve your goals, you’ll have to cultivate a fundamental mindset of intentional discipline. Here are four steps to help set you up for success:

Step 1: Set Your Goal

Ask yourself: Why am I doing this? What is the motivating force driving me to live beneath my means? Is it getting out of debt? Retiring early? Being able to pursue a dream or passion of mine? Determining this gives you a reason to change your lifestyle.

For my husband and I, we want the flexibility and freedom that comes with being debt-free. That goal is so important to us that we’re motivated to make sacrifices now in order to reap the rewards later.

Step 2: Change Your Budget Mentality

Many people I talk to are afraid of budgeting. They see a budget as a complicated, daunting document or a set of rules that keep you from having any fun. If this is you, I encourage you to challenge your mentality!

A budget isn’t a restrictive set of rules, but rather a tool to help you achieve the kind of life you want. You can create a budget that is extremely detailed or more basic. You design it exactly how you want to meet your needs, your wants, and your personality, and if it isn’t working for you, just revise and modify it.

Step 3: Track Your Money

For one month, pay detailed attention to where your money goes. Figure out exactly how much you make in a month, and figure out exactly where it ends up. If you’ve never done this before, the results may surprise you! Many people feel very tight on money, but once they start tracking their finances, they realize that there actually IS room to tighten up.

Tim’s note: I like to use You Need A Budget. They offer a 34-day trial to check ’em out. Signing up through my link will get you an extra month for free after subscribing. Sweet!

Step 4: Determine What You Won’t Sacrifice

Living beneath your means does not mean sacrificing everything you love. Remember, a budget is about achieving your goals – both long-term and right now. If skiing or scrapbooking or coin collecting is an important hobby to you, there’s no reason to give that up completely. Just make sure to factor it into your budget.

Stephen and I love to travel, so when we designed our budget, we made sure we included a generous category for travel. Because of that, we were able to take an 8-day vacation to Europe in May, without derailing our plan to pay off student debt.

Part 2: Slash Spending and Save $$$

Alright, here comes the nitty-gritty work. Are you ready to dig into your budget and do some slashing? If so, ask yourself: What am I willing to sacrifice now to achieve my long-term goals? And get to work!

While I can’t make these tough decisions for you, let me tell you some of the strategies we’ve used that have worked really well:

1) Shop Online & Save

Look at Reviews – The top reason I shop online is for access to reviews. Reading reviews on sites like Amazon (or a quick Google search of the product) helps me know if what I’m buying is worth it. This is especially helpful for larger purchases, like electronics or furniture. Sometimes, it’s worth it to invest in a higher quality item that will last – and the internet is a great way to determine what these products are.

Use Ebates – Ebates partners with hundreds of major retailers to offer you cash back on most online purchases, and they send you a check with your savings every three months. I usually get a quarterly check for around $100. Get the Chrome extension and Ebates will pop up a cash back notification anytime you visit the website of a partner retailer! Sign up here.

Find Promo codes – Before I confirm an online purchase, I always do a quick search for promo codes for that company. You can often find a coupon for 15% off, a free shipping deal, or something similar that will bring the cost down.

2) Travel Smarter

Hopper – If you have a trip with specific dates coming up, just plug the information into this mobile app and select “watch flights”. Hopper checks flight prices daily across a wide number of airlines and compares them with historical flight price data. It sends you a notification when prices drop and even gives recommendations on when you have the best deal and should book.

Take advantage of online comparison tools to save money on big travel expenses!

Skyscanner – My favorite Skyscanner feature is the “cheapest month” option. If you have a destination in mind but flexible dates, this is a great way to find a steal on vacation tickets. My husband and I got our round-trip plane tickets to Amsterdam for about $400 on this site.

3) Cut Entertainment Costs with Creative Planning

Here are my top tips on saving money while still having a blast: Scour Groupon for great deals on entertainment and things to do. Check local entertainment calendars for free and cheap events (we’ve been to high school plays, free museum days, concerts, improv shows, and art classes). And don’t forget to take advantage of free outdoor entertainment, like hiking, sledding, geocaching, playing sports in the park, or picnicking by a river.

4) Buy second-hand

I estimate that 80% of our clothes and home decor come second-hand. It is possible to buy used and still be on-trend!

Here’s my process: On select Saturdays, when Goodwill is having their 50% off sale, I skip my local Goodwill and head straight for one in a ritzy Denver suburb for clothes shopping – there are way more fashionable options there. I also browse second-hand boutiques and shop off local Facebook groups for items that are a little more recent.

When I need something new, specific, or an investment piece, I shop at Ross or TJ Maxx to save some money. And, to further save money, I stick to basic wardrobe essentials that can be dressed up with statement pieces.

5) Eat out less

We pack our lunches every day. It’s healthier and saves a lot of money over time.

We also are intentional about only eating out once a week. When we do eat out, we prioritize using gift cards/Groupons, catching happy hour specials, and exploring “hole-in-the-wall” places that are usually much cheaper (and tastier).

Our #1 eating out money saving tip? Skip the extras and opt for the entrees. With US restaurant portion sizes, these are more than enough to fill us up. We’ve found that two entrees + tip costs only half as much as an appetizer + drinks + entrees + desserts + tip.

6) Is it REALLY necessary?

Many things that we’ve come to accept as “necessary” today really aren’t. Skeptical? Read a blog or two by someone who travels around the world full-time, and you’ll learn quickly just how little you actually need.

Cutting out “necessities” is very difficult, especially if you’re used to a certain lifestyle, but I challenge you to take a hard look at your spending habits and be willing to sacrifice.

A few “necessities” we’ve given up (and lived to tell the tale):

Cable TV (we have Netflix and a $15 satellite that picks up about 40 local channels)

Gym Memberships (I opt for bodyweight exercises, YouTube workouts, jogging, and hiking)

Car Payments (We always buy our cars used, which means no monthly payments. It helps that my husband knows how to work on vehicles!)

Part 3: Stay on Track

Even with our best efforts to stick to a budget, it’s easy to fall off the wagon. Here are four steps to staying on track long-term:

Step 1: Get Your Friends Involved

One big challenge many people on a budget face is this: what do you do when your friends ask you to go out to dinner, or on an impromptu adventure that isn’t in your budget? This is a tough one because having fun with our friends is very important to us!

How we do it: Rather than withdrawing from friends or declining invites, we have been intentional about sharing openly and excitedly about our budget and our goals. Our friends have been very supportive, and are quick to suggest entertainment options that fit our budget, such as hosting board game nights, going out for appetizers instead of a meal, and using Groupon deals.

Step 2: Check In With Your Goals

It’s hard to stay motivated when you lose sight of your long-term goals. So stay focused on them!

How we do it: At the end of every month, I calculate how much debt we’ve paid off cumulatively. Rather than focusing on how much debt is left, we choose to celebrate what we have accomplished!

We also make sure to dream about the future together – what will we do when we’re out of debt? We’ve imagined buying a beach house in Santa Barbara, backpacking through South America, starting a non-profit organization…Of course, who knows if we’ll do any of those things, but dreaming about the possibilities keeps us excited and motivated.

Step 3: Resist Lifestyle Inflation

“Lifestyle Inflation” is what tends to happen when your income goes up: you increase your spending to match. You get a raise, you buy a new car. The next raise, you hire a professional cleaning service for your home. Then, maybe you switch jobs with a higher salary and you start using a personal trainer. All of a sudden, things that were once luxuries now seem like necessary parts of your routine, making it very hard to rein in your spending or adjust if your financial reality changes.

The next time your income increases, challenge yourself not to increase your spending in any category. Put all that extra money towards your financial goal. I promise, it’s worth it!

How we do it: We live in a small, one-bedroom apartment. We don’t love the size of our kitchen, and it would be nice to have a second bedroom, so we were planning to upgrade when our lease was up in June. But, as we talked about it, we decided that even though we could afford it, we really didn’t need the extra space. We chose instead to renew our lease. The $200/month we saved by not upgrading went straight to student loans.

Step 4: Reward Yourself

The absolute best way to stay on track with a tough budget is to reward yourself along the journey.

How we do it: Every time we pay off one of our student loans, we celebrate with a nice dinner out at a favorite restaurant and a $50 splurge purchase for each of us. When we pay off our loans in full, we’re planning to take a “dream vacation” as a reward…although we’re still debating about where that will be!


So, that’s it. That’s how we designed a tough budget, stuck to it, and still had a great year without sacrificing the things we love. We think you can do it, too!

What’s your goal? Are you willing to live beneath your means to get there quicker?

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Hey! I'm Tim.

I’m an expert budgeter, author, and Certified Financial Coach. My mission is to not only teach you money principles, but to teach you how to mold them to fit who you are and build the life you want. I don’t like typical money advice. I’ve tried to fit into a mold by using typical money advice and I had less control of my money and went further into unnecessary debt. Now, I live to teach others how to break the mold in their own lives and find their version of financial freedom. Read more about me.

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  • Budgeting principles from the five best budgeting methods
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  • How to implement your selected principles into your own budget
  • BONUS: Case Study of what budgeting principles I implemented in my own budget (and how!)

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