How This Couple Paid off $204,971.31 in Debt

Recently, I decided to start a new series where I interview people who are doing extraordinary things with their lives. First up was JP Livingston, who retired with a net worth over $2,000,000 at the age of 28. Today’s post is about Claudia and Garrett, who paid off a crazy amount of debt and are…

Michelle Schroeder-Gardner

Last Updated: December 28, 2023

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Recently, I decided to start a new series where I interview people who are doing extraordinary things with their lives. First up was JP Livingston, who retired with a net worth over $2,000,000 at the age of 28. Today’s post is about Claudia and Garrett, who paid off a crazy amount of debt and are now living debt free!

This couple sold their 1,500 square foot home, sold 80% of their stuff, side hustled, paid off $204,971 in debt, and are now enjoying debt free living.Claudia and Garrett sold their 1,500 square foot house, downsized to a 500 square foot home, sold 80% of their belongings, side hustled like crazy, and were able to pay off $204,971.31 in debt.

Yes, they paid off over $200,000 in debt!

Due to that, I thought they would be great to interview for my series. Paying off that amount of debt and being debt free is no small feat.

Related articles that will help lead you to debt free living:

I asked you, my readers, what questions I should ask Claudia and Garrett, so below are your questions (and some of mine) about living debt free. Make sure you’re following me on Facebook so you have the opportunity to submit your own questions for the next interview.

Here is how Claudia and Garrett paid off over $200,000 in debt and are now living debt free. You can follow them at their blog Two Cup House.

How to become debt free:


Tell me your story and all about you and your spouse. How much debt did you have and what was your debt from?

Garrett and I live in Lancaster, PA.  We’re millennials–I’m 32 and Garrett’s 35.  We’re also outdoor enthusiasts.  We LOVE any and all outdoor activity, especially camping, hiking, and kayaking.

With respect to our finances, we were typical.  We went to college (with student loans), bought brand new cars shortly after graduation (with auto loans), and then mortgaged a home, which we remodeled using credit cards.  

At the start of our journey to debt freedom in 2015, we had a total of $204,971.31 in debt.


Why did you want to get out of debt fast?

We’re outdoor enthusiasts who weren’t spending a lot of time outside when we were in debt.  We spent a lot of time indoors, remodeling our home and working to pay on the debts we incurred because of our choices.

After a lot of soul searching about the things we wanted to be doing with our time, remodeling a house and working long hours were NOT on the list.  We longed to be outside, hiking and camping more often than we were.  We saw debt as the barrier to the lifestyle we truly wanted.  And that’s the moment in 2015 when we decided to pay off 100% of our debt.


How long did it take you to pay off your debt and reach debt freedom?

We started our personal finance journey in March 2015, so it took exactly two years to pay off 100% of our debt.


How did you manage to get out of debt fast?

We made a lot of changes right away.  The first few months were busy!

I left my part-time job in favor a full-time job, which helped increase our income.  Garrett worked extra hours on his full-time sales job, which is largely commission driven.

Then, we put our 1,500 sq ft house on the market.

We also started a side hustle leveraging my digital marketing & SEO skills to help us further increase our income.  We spent nights and weekends on our side hustle helping clients with their marketing needs.

Next, we took on mortgage to build a small, 536 sq ft house, which we moved into in September 2015.  (We also sold or donated about 80% of our stuff before we moved into our small house.)

Because our first house hadn’t sold yet, our debt ballooned to more than $240,000.  In this time, we were able to finishing paying off the $16,515.72 in credit card debt we had, which was exciting!

Once our first house sold in May 2016, our debt went down to $65,981.97.

With our side hustle and the reduced expenses from downsizing, we were able to pay off the small house mortgage in November 2016 and then the remaining student loan debt in March 2017.

Related post that will teach you how to get out of debt fast: How To Make Extra Money


Can you tell me about how and why you downsized, and how much money that saved you?

We used maybe half the rooms in our first house, so we had far more space than we really needed.  For example, we had a large eat-in kitchen, so we didn’t need a dining room and therefore, the dining room sat empty most of the time.  Our house just wasn’t a fit for our lifestyle.

And our house had what we considered to be a huge mortgage balance of about $155,000.  We decided we didn’t want to pay for space we weren’t using, so we downsized to a more affordable home that better fit our lifestyle.

Because of downsizing, our expenses are down by one-half to two-thirds in some categories.  Since we paid off all of our debt, our monthly expenses are less than one-third of what we had in March 2015 when we started this journey.


What is your response to people that say, “You should invest that money instead of paying off the debt, you’ll earn more in the long run…” etc.?

Given that we still have 30+ years left to invest before traditional retirement, we weren’t concerned about the 2 years we spent on paying off our debt.  Peace of mind meant more to us.  

Now that we’re debt free, both of us feel far less stress, so we know that we made the decision that was right for us.

Related: Free Debt Payoff Plan Worksheet


What’s the best way for a person to become debt free?

We started with goal setting.  Paying off debt is one thing, but what will paying off debt do for you?  What do you hope to do once all of your debt is paid off?  Having a clear “why” is critical to stay motivated.  Two years doesn’t seem like that much time, but in the midst of it, it can be challenging to stay focused.

Once you know what you’re working toward, start tracking your spending with Personal Capital and then set a budget.  

Over time, we were able to chip away at expenses we assumed were “fixed,” like cell phone bills and groceries by challenging what we were spending in each category.  And we only knew what we were spending because we tracked every single dollar in each category.


What sacrifices did you have to make in order to become debt free?

We didn’t make any sacrifices.  

Rather, we assessed every aspect of our lives.  Are we living according to our values?  Are we making progress on our goals?  Are we living the life we imagined?  Because we couldn’t answer “yes” to each of those questions, we began an introspective journey into why that wasn’t the case.  

Knowing our “why” helped us make big changes, not sacrifices, to achieve the life we wanted.


Often people paying off loads of debt feel they have to choose between “living life” and making payments. Were there any times during the journey that you chose to “splurge”?

Yep.  We took a vacation to the Smoky Mountains after year one.  We were quite frugal in year one and spent almost all of our free time on our side hustle, so this was quite the splurge for us.


Were there any months that you didn’t make extra payments at all?

Nope.  We made extra payments every month.  We just budgeted for the vacation ahead of time.


How did you stay motivated especially in our hyper-consumerism, debt is good society?

It became easier over time.  At first, others didn’t understand.  Everyone we know has debt, so pursuing debt freedom was a foreign concept to many.

Surrounding ourselves with others who align with our values, like living without debt, made the journey much easier.  Limiting our exposure to people who espouse the need for or desire to have debt made it easier to focus on our own journey.


Was going bankrupt ever a thought?

Nope.  We dug this hole…we were going to find a way out on our own!


What kind of help did you get – if any? Free rent from a family member? A friend throw you a side gig? So often it’s more than just discipline that gets you there. Do you have kids?

No kids.  No free rent.  Both of us worked full-time jobs during the journey.  

By leveraging my digital marketing skills, we did start a side hustle in 2015, which we grew into the business I (Claudia) have made my full-time focus.  Having a high-paying side hustle was critical to our ability to make large extra payments.


If you were starting back at ground zero, what would you do differently?

We made a lot of mistakes in trying to sell the big house, so we should have done more research into the things that are done to stage a home properly.  We might have even moved out of the house and into an apartment temporarily to “de-personalize” it, which could have helped sell the house faster.  If it had sold faster, we would have had more money available each month to pay off debt.

Other than the mistakes made in trying to sell a house, we wouldn’t change a thing!


What is your next financial goal?

We’re working toward financial independence, which (for us) is the ability to cover our living expenses with investment income, so we’re saving for the purchase of real estate to be able to do this.


What is your very best tip (or two) that you have for someone who wants to reach the same success as you?

I’ll reiterate a point earlier because I think it’s incredibly important: know what you’re working for, know your “why.”  Once you know what you’re working for, you’re more likely to make the changes necessary to stay committed to and achieve debt freedom.

At the start of the journey, we made a lot of assumptions about the things we couldn’t live without, like Netflix and Hulu.  Over time, in every category of our budget, we challenged our assumptions and whether or not the thing we were spending money on was actually moving us in the direction of our “why.”  Spending on things that align with our “why” has actually lowered our expenses, which continues to be a surprise to us!

What other questions do you have for them about how to become debt free? Are you interested in debt free living?

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Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. “At first, others didn’t understand. Everyone we know has debt, so pursuing debt freedom was a foreign concept to many.”

    This says it all right here. I was just checking out Rob’s article today at Mustard Seed Money and I’ll say the same thing here. I lived in an area where “status” was synonymous with “debt.” And not wanting to be in debt was a foreign concept as well. “Everybody has debt” is the rallying cry for the middle class.

    Way to pay off all of that debt and begin living the lifestyle that suits you! That’s awesome!

    1. Yes! I have a post going live soon about the normalization of debt – can’t wait for it to be published 🙂

      1. Claudia @ Two Cup House

        Looking forward to the post! 🙂

      2. Amanda

        I am really looking forward to this post as well! Thanks!

    2. Claudia @ Two Cup House

      Thanks, Dave! Debt and status are the same thing where we’re from, too. It feels really good to be free to make some different choices with our lives. 🙂

  2. Thanks for sharing this story. It will be interesting to see if that small of a home will meet their needs for the next few years at least.

    1. I’m sure they’ll be fine. Me and my husband have lived in a tinier home for 2 years now.

  3. Tara

    While I love stories like these, it’s somewhat misleading to say you paid off $200,000 worth of debt when a big portion of that was selling a house and losing a 6 figure mortgage in the process. I applaud their efforts though in downsizing and in realizing what matters more in life. What is more amazing is that they were able to pay down a $60,000 mortgage in such a short time, although I imagine some of the proceeds from the sale of the old house did help. Also, congrats on the success of the online business!

    1. Monica

      Not misleading at all. A mortgage IS debt. It may not be what YOU’RE definition of debt is and may not mirror yours, but it IS debt nonetheless. And I’ve known several people who have paid off their homes early, you just have to have the strategy set ahead of time and stick to your plan. Google it and you’ll see how it can be done. Kudos to them for their determination and tenacity in strangling that debt that weighed them down.

    2. Yes, realizing what matters in life is an important step.

    3. Claudia @ Two Cup House

      Thanks, Tara! Unfortunately, we made $0 on the sale of our big house, so no proceeds to reallocate. *womp womp*

  4. Such an inspiring story. Downsizing can make a huge difference, AND it’s nice not having to clean so much!

  5. This is so inspiring! My husband and I just started our journey to paying off everything and I hope to one day be able to say the same. We have been taking actionable steps and this month we have been focused on removing all unnecessary expenses. Next month we will focus on boosting our side-hustle. It’s good to set real expectations and goals. I find that this helps a lot!

  6. Wow. Super impressive! Makes our goals and progress feel like we are slacking.

    1. Aww I’m sure you’re doing well!

  7. I would love to live a debt free life, but unfortunately, it doesn’t look like that will be happening any time soon. At least becoming debt free teaches you a lot, regardless of how long it takes.

  8. Loving this series Michelle! I love reading about people paying off debt and this is awesome!

    They made some fabulous, deliberate choices to become debt free so that they could focus on what’s important to them. To me, that’s what personal finance is all about.

  9. I do want to live debt free..My husband and I are around the same age as Claudia and Garrett, but with kids and I kinda always assumed that we couldn’t pay off our mortgage. Like it was too late for us since we decided to have a family, very early compared to our friends. The mortgage people never tell you how to pay off your mortgage as fast as you can, which I’d like to see changed. If we were told that, things would have been different.

  10. Cameron

    Thanks for sharing your story!

    Challenging assumptions is a great thing that I currently struggle with. It is great to see you were able to donate your things and live in a smaller home. I recently was able to cut cable by challenging these assumptions that I couldn’t live without it.

    Very inspirational story. I am working on decluttering my ‘things’ and reading this made me want to speed up the pace to be able to pay off more debts.

  11. Max

    I would like to hear more details about “we took on mortgage to build a small, 536 sq ft house”

  12. Rohit Malhotra

    Thanks for sharing the story. It is important to start with goal setting and making sure that you don’t have any debt with you. Great story!

  13. Eliza

    Thanks for sharing Michelle. I really like the attitude that once you align your ‘why’ it doesn’t feel like you’re making sacrifices. That’s exactly how it worked for my husband and I when we were paying off our mortgage. Our spending/saving level just feels comfortable.

    What’s more, I’ve come to realise that this idea is applicable to any area of your life where you’re trying to achieve something challenging, whether it’s getting fit, studying or a side project. To get somewhere, there’s always sacrifices to be made. If you can figure out how to make it feel like they’re not sacrifices, you’re onto a winner.

  14. Great example of getting clear about what’s important to you versus what society says will make you happy. Hats off to them! 🎉

  15. Very impressive! Love the idea of moving into a tiny home. Seems like ALOT of people are doing that to help become debt free.

  16. It all starts with goal setting! Keeping track of goals is so important when trying to crush debt. This is such an inspiring story. Hopefully, I’ll be in a position to get featured soon. 🙂

  17. Abigail

    Awesome Article & its truly Inspiring. Really gives me a push to move forward with my dreams – I am pretty much in the same situation as you were (though not as big a figure of debt that you had.)

    Thanks for sharing your story !