They cut out their credit cards

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The Moment: Three years ago, Jason and Molly Corbett had about $12,000 in debt - $4,000 of that from credit cards. After Jason began listening to radio shows and reading books on personal finance, he decided it was time to pay it off.

"We thought we made enough money and it seemed ridiculous to carry this debt," he says. Jason came across people tracking their weight loss on line and decided to start tracking his debt loss the same way, through a blog he started in April 2005, No Credit Needed.

The Method: "We didn't cut our credit cards up or cancel our accounts. We just put them in our wallet and decided not to use them," says Jason. By February 2006, the entire $12,000 debt was gone, and the Corbetts had built an emergency fund to cover six months of expenses. They use an envelope system, putting cash aside at the start of each month for the kid's lunches, groceries and baby sitters. They use debit cards for gas, and pay their bills online.

Best Tip: "The challenge after you get out of debt, is to be responsible with the money you're saving," says Jason. "You can overspend using a debit card too."

The New Life: "Not using credit cards forces me to stick with a budget and analyze whether I want to buy something," he says. "We never worry about late payments or rates changing on our credit cards." The Corbetts contribute the maximum to their retirement plans and IRAs and have educational savings accounts for their children.

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