They cut out their credit cards

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The Moment: In the early 1980s, the Downies routinely carried a balance of $3,000 to $4,000 on credit cards. Then a friend asked Mike to review his financial situation to figure out how he could save money. Mike's analysis revealed that the friend was spending more than $3,000 a year on credit card interest, money that could have been going toward savings.

"It was a real eye opener to see how much money we were losing to our credit card debt too. We decided to stop giving away our cash to interest payments," says Mike.

The Method: The Downies went cold turkey. They removed their credit cards from their wallets and closed all 10 of their store credit cards. They put off unnecessary spending, quit smoking and stayed home more often. That gave them an extra $250 a month, which enabled them to pay off their cards within a year. Today, they use cash or checks, balance their checkbook religiously and keep one no-fee credit card for emergencies.

Best Tip: "We joined a credit union, which gave us access to good rates on personal loans, which we could turn to for emergencies instead of credit cards," says Mike.

The New Life: The Downies say paying off their credit cards two decades ago was a key factor in their ability to retire early. "I'm convinced it allowed us to retire three years earlier than we would have been able to otherwise," says Mike, who retired at 60 five years ago. "Instead of spending $50 a month, we were saving $50 a month. Over the years, that really adds up."

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