The situation: Brian racked up $35,000 in credit card debt by mid-2009. Add in two student loans, a new car loan and several credit cards, and he had accumulated a total of $109,000 in debt by the beginning of 2010.
His strategy: Track your expenses. As of October 2010, Brian had paid off $22,000 of his total debt over the course of 24 months just by looking closely at where he was spending money.
To stay organized, he set up two checking accounts and two savings accounts. He deposits $250 into the first checking account every two weeks (when he gets his paycheck) to use for everyday expenses. When it runs out, he doesn't go out.
He put another $250 into the first savings account as an emergency fund. Every five paychecks, he removes $1,000 from the account and applies it toward his credit card debt. Finally, he deposits $100 into the second savings account every paycheck.
His advice: Don't limit yourself too much, or you will give up.
How he's doing now: Brian has now paid off a total of $23,000 of his debt since the beginning of 2010 -- meaning he has paid off about $5,000 since October of 2010.
"I know it's not a lot compared to my previous pay off amount, but a lot has happened in the last year," he said. Not only did he move across the country for a new job, but he also got married. "Those two things alone took a large chunk of my debt reduction money out of play."
Living expenses at his new place are much lower, so he says he will be able to contribute more toward his debt reduction efforts. And, he said, his system of multiple checking accounts helped him curb his spending habits so much that he was able to pay for the move in cash.
From sleeping in offices to following senior citizens to restaurants in order to find the best "early bird specials," these people will do almost anything to save a buck.
