2 of 8
Lance Pickett
Lance Pickett
Lance Pickett, 32, and his wife put their "wants" on a Dream Board while they pay off their debt, and they track how close they are to paying off their mortgage.
Strategy: Live without the little things
Advice: Don't go too far -- like trying cloth diapers to save $60

My wife and I owed $18,000 in student loans, $6,000 in car loans, $2,000 in credit cards and $152,000 in my mortgage.

We were living paycheck to paycheck and I was tired of seeing my bank account zero out every month. So we wanted to get out of as much debt as possible as soon as possible. We started by saving an extra 1/12th of our total required expenses -- like mortgage, utilities and Internet -- each month, in order to have one month worth of bills saved up at the end of the year. Then we got excited and doubled that. In three years we had six months of living expenses and threw that into a high interest CD at 5%. That really got us going, seeing the money grow -- and we became obsessed with eliminating debt.

We just really took a look at what we need and only spending money on those things. I used to eat out a lot and that cost me $200 a month. Now we invite friends to "eat-in" at our house. We have a garden and purchase produce from co-op programs. Before we became debt-obsessed we would also get nice Christmas gifts for each other, but now we limit each other to $50.

Now, if there's something we want we put it on our "Dream Board," a cork board by our bedroom door that we see everyday. And it will stay there until we're debt free. It also has the loan schedule for our house, and each month we scratch off a month. Next to the schedule, we post our ultimate "want" that we agree to purchase -- with cash of course -- once our house is paid off. I have a 2010 Camaro waiting for me.

Cutting back so much has been hard, but we've learned a lot along the way. My wife learned some things are worth paying more for after trying to use cloth diapers -- which most people use as burp rags -- pinned inside training pants with plastic pants over them for our two kids, all so that she could reuse the diapers and not spend $60 a month on Pull-ups. As a result they both got horrible rashes, so we switched to a cheaper brand of regular diapers.

Altogether, we've paid off around $90,000 since 2005.

NEXT: Jowharah McNeil
Last updated October 21 2010: 12:29 PM ET
What to do with $1,000 now Given the uncertain economic picture, you probably have a chunk of change squirreled away. Here's how to best use that cash. More
11 ways money buys happinessSometimes a small splurge is all it takes to feel rich. Here's how 11 readers get the most happiness for their buck. More
9 smart new ways to manage your $$ At Finovate, 56 companies vied to be the next big thing in personal finance. From pay-by-smartphone to smarter banking, here's what was new and cool. More
  • Find Homes for sale
    Real estate and homes for sale on Trulia

  • Property Type
  • Find a home in:
  • New York | Atlanta | Chicago | Los Angeles
  • Washington D.C | Houston | Philadelphia | More options
Special Offer

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.