How I Paid Off $38k in Debt; The Full, Unfiltered Story

I want to start with the number, because I think numbers matter.

$38,479.

That's how much debt I was sitting on when I finally stopped avoiding it and actually looked. Not a rough estimate. Not a "somewhere around." I opened every statement, added up every balance, and wrote it down in black and white.

It was a lot.

Before you ask; no, it wasn't all credit cards (although a good amount of it found its way onto the credit card). It was the thing that debt always is: a combination of decisions that each seemed fine at the time, slowly layered on top of each other until the total became something I'd rather not think about on a Tuesday afternoon.

So I didn't think about it. For longer than I'd like to admit.

Here's how that ends: it doesn't get better on its own. It gets worse. Interest is patient in a way that you and I simply are not.

This is the story of how I paid it all off in 3 years, without a windfall, without a side hustle that went viral, and without a single "just cut your morning coffee" piece of advice that actually helped.


Step 1: I stopped avoiding the number

The first thing I did; the only thing that actually started everything, was I sat down and wrote out every debt I had. Every single one.

Credit card balances. Any loans. Everything with a balance and an interest rate attached to it.

I put it in a spreadsheet. Nothing fancy. Three columns. Creditor. Balance. Interest rate. That was it.

The total was uncomfortable to look at. I looked at it anyway. Often. Something strange happened: it felt slightly better than not knowing. The monster under the bed is always scarier before you turn the light on.

What to do: List every debt you have. Don't estimate. Log in, look at the actual balance, write it down. All of them. The total number is not your enemy, it's your starting point. Your personal goal.


Step 2: I built a budget before I did anything else

Here's what I see people do wrong: they find out their debt total, panic, and immediately start throwing extra money at it without any kind of system. That works for about three weeks. Then an unexpected expense hits, there's no buffer, and the whole plan falls apart.

Before I paid down a single extra dollar of debt, I built a budget.

Not a "track your spending and feel bad about it" budget. A zero-based budget where every dollar coming in gets assigned a job before the month starts. Living expenses. Minimum debt payments. A small emergency buffer. And whatever was left after that became my debt attack money.

The budget did two things. First, it showed me exactly how much I actually had to throw at debt each month. Second, it stopped me from accidentally spending the money I needed for debt payments on things I didn't really need.

I found more money than I expected. Not a lot, but more than I thought I had. That mattered enormously in the early months when progress felt invisible.

What to do: Before you accelerate debt payoff, spend one month doing a proper zero-based budget. Know your exact income, exact fixed expenses, and exact leftover amount. That leftover number is your debt weapon.

*Not sure how to do a zero-based budget? I wrote a full beginner guide — [link to Post 2].)*



Step 3: I picked a payoff method and stuck to it

There are two main debt payoff strategies that actually work. You've probably heard of both.

The Avalanche method: Pay minimums on all debts. Throw every extra dollar at the debt with the highest interest rate first. Mathematically optimal; you pay the least interest overall.

The Snowball method: Pay minimums on all debts. Throw every extra dollar at the smallest balance first regardless of interest rate. Psychologically optimal; you get wins faster, which keeps you motivated.

I used the avalanche method because I'm stubborn about math. But here's the honest truth: the best method is the one you'll actually stick to for 1-3 years. If seeing small balances disappear keeps you going, do the snowball. The difference in total interest paid is real but smaller than you think; and worth nothing if you quit. The caveat here is if you have a very high interest credit card, that can do long lasting and meaningful damage, so fixing/eliminating that and/or its balance should really be your top priority. You can then pick your strategy from there.

I listed my debts in payoff order. I set up automatic minimum payments on everything. Every single month, every extra dollar went to the top target.

When that debt was gone, I moved to the next one. And the next. This is the part they call "the debt snowball effect" even in the avalanche method; as each balance clears, the minimums you were paying on it get rolled into your attack fund, which grows. Progress accelerates over time. It’s almost like compound interest in reverse :) You will find yourself looking for ways to pinch and save that little bit extra, its almost gamification of your debt payoff. More on that in the next section.

What to do: List your debts in either interest-rate order (avalanche) or balance order (snowball). Pick one. Automate your minimums. Attack the top one with everything extra.


Step 4: I found extra money — but not the way influencers tell you to

Everyone will tell you to start a side hustle. Sell your stuff. Drive for Uber.

I'm not going to tell you that's bad advice. Extra income helps. But I want to be honest about the other side of that coin: most people who are already working full time and managing debt don't have a lot of spare capacity for a second job. The additional pressure, time and energy drain to hustle your way out of debt can make you feel like the problem is that you're not working hard enough; rather than that you just need a better system.

The extra money I found came mostly from the budget.

When I actually tracked where my money was going; not guessing, actually tracking, I found spending I'd completely lost awareness of. Subscriptions I'd forgotten. Habits that had gotten too expensive or frequent without me really noticing. Spending patterns that looked fine individually when considered inside the vacuum I had created but collectively added up to a lot.

I cut ruthlessly but not joylessly. I kept the things that actually mattered to me. I cut the things that didn't. I freed up a few hundred dollars a month. That was my accelerant.

If a side hustle is realistic for you, great! Add it. But don't let the absence of one be the reason you don't start.

What to do: Go through your last 3-6 months of bank and credit card statements. Categorise every transaction. Find the spending that surprises you. Cut one category that doesn't actually make your life better. Every bank I’ve come across allows you to export to csv file. Now, times have changed since I did this. I went line by line, and i highly recommend this approach, as it makes you relive and feel that expense, purchase, meal, or knick knack that was purchased. With AI, you can now chat GPT that shit, categorize it, group it , colour code it and do trend analysis…This also allows you to go back further for a larger representative sample. If you choose that route, promise me to take the time, and review the transactions. I created a plug and play spreadsheet to help you here: Zero based budget


Step 5: I dealt with the setbacks

I want to be honest about this part too because nobody talks about it.

There were months it went wrong. An unexpected car repair. A heavy phone bill. A month where the budget just didn't hold. Times when I moved backward instead of forward.

Every single one of those moments felt like proof that I couldn't do it. That the plan wasn't working. That I should just give up and go back to ignoring the statements.

Here's what I actually did: I took a breath. I recalculated. I kept going.

The secret to paying off debt over multiple years isn't that you execute the plan perfectly every month. It's that when you fall off, you get back on. The people who pay off debt aren't the ones who never have setbacks. They're the ones who don't let a bad month become a bad year. Like working out, consistency is key.

What to do: Build a small emergency fund before you aggressively pay off debt, even $500–$1,000 is enough to stop a setback from destroying your plan. When something goes wrong (and it will), treat it as a one-month pause, not a failure. Replenish emergency fund and rock on.


What I wish I'd known

Looking back, there are a few things I'd tell past-me:

The beginning is the hardest part, not because the math is hard, but because progress is invisible for a long time. Keep going. It compounds.

Your debt is not a moral failing. It's a financial situation. Situations can be changed.

The people who tell you it's simple "just stop spending money you don't have!,” have usually never been in a position where that felt impossible. Their advice isn't wrong, it's just incomplete. What you need is the system, not the lecture.

Finally: the day the last balance hits zero is one of the best days you'll have. Not because the number is magic, but because of what it means. It means you decided to change something hard, and you actually did it.

I did it. You can too.


*Ready to start? Grab the free budget starter guide, it's the first step I recommend to everyone. [Link to lead magnet page]*

*Next read: [Zero-based budgeting for beginners →]*

Zero-Based Budgeting for Beginners

The Method That Finally Made My Money Make Sense and made me a millionaire

I have tried every budgeting method.

The 50/30/20 rule. The envelope/Jar system. The "just check your bank account more often" method (not a real method; I invented it to avoid budgeting). The "I'll start properly next month" technique, which I used for approximately three years.

None of them worked. Not because the methods were bad, but because none of them actually told me what to do with my money before I spent it. They were all reactive ways of looking at what I'd already done and feeling bad about it.

Zero-based budgeting is different. It's proactive, and it's the only thing that's ever actually changed my financial behaviour in a lasting way.

Here's exactly how it works and how to set one up.


What zero-based budgeting actually means

The name sounds technical. It isn't.

"Zero-based" just means that at the end of your budgeting process, the math works out to zero. Not that you have zero money; that you have zero dollars unaccounted for.

Every dollar you earn gets assigned a job before the month starts. Some dollars pay rent. Some pay off debt. Some go to groceries. Some go into savings. Some, and this is important, are specifically allocated for fun, so you don't feel like you're living like a monk.

The goal is that income minus all your assigned categories equals zero. Not because you've spent everything, but because you've told every dollar where to go.

When money has a job, it stops disappearing.

Why most budgets fail (and why this one doesn't):

Most budgets are built backwards. You spend the month, then look at the damage, then feel guilty, then vow to do better next month. Repeat indefinitely.

Zero-based budgeting happens at the start of the month. Before any money moves. You sit down, you look at what's coming in, and you assign every dollar a destination.

This means two things:

First, you make the conscious decisions when you're calm and rational; not in the moment, standing in a shop, deciding whether you can afford something without really knowing. You've already decided. You check the budget, not your gut.

Second, when you run out of money in a category, that's information. Not a failure. Not a reason to beat yourself up. Just data: that category needs more allocation next month, or spending in another category needs to come down.

It turns budgeting from a guilt exercise into a management tool. It guides choices.



How to set up your first zero-based budget. Step by step

Step 1: Write down your monthly take-home income

Not your salary. Not your gross income. The actual number that lands in your bank account every month after tax.

If your income varies (freelance, hourly, irregular), use a conservative estimate; your average low month, not your best month. You can always allocate extra money mid-month; it's harder to un-spend money you didn't have.

Step 2: List every expense category

Start with the non-negotiables; the things that happen no matter what:

- Rent or mortgage
- Utilities (electricity, gas, internet, phone)
- Groceries
- Transport (car payment, insurance, fuel, or transit pass)
- Minimum debt payments (every single one)
- Insurance (health, home, car)

Then move to the flexible-but-expected:

- Subscriptions (go through your bank statement — there are more than you think)
- Personal care
- Clothing
- Eating out / takeaway
- Entertainment

Then savings and financial goals:

- Emergency fund contributions
- Extra debt payments (above minimums)
- Savings goals

Then, and this is the part people leave out; fun:

- Whatever you genuinely enjoy spending money on
- Give it a real budget, not zero

Step 3: Subtract all categories from your income

Add up everything you've listed. Subtract from your income.

If the result is positive, you have unallocated money. Give it a job. Add to debt payments, add to savings, increase a category that felt too tight.

If the result is negative, you're over budget before the month starts. Cut something. Eating out is usually the first place to look. Then subscriptions. Then discretionary spending.

Keep adjusting until the number hits zero.

Step 4: Track throughout the month

The budget only works if you check it. Every time money moves, update your categories.

Spent $60 at the Grocery store? Take it from groceries. Went out for dinner? Take it from eating out. When a category hits zero, it's done for the month. You either stop spending in that category, or you consciously move money from somewhere else, but that's a decision you make deliberately, not accidentally.

You can track in a spreadsheet (I have an awesome one available for a cool $25), a notes app, or a dedicated budgeting app like Buddy, YNAB or EveryDollar. The tool matters less than the habit.

Step 5: Review at the end of the month

Spend 15 minutes at the end of each month looking at what happened. What categories ran out first? What categories had money left? What surprised you?

Then adjust next month's budget accordingly. A good zero-based budget takes about 3 months to calibrate. By month three, you'll have a version that fits your actual life, not a theoretical life where you never have unexpected costs.


The categories most people forget

In my experience, these are the ones that blow up budgets:

Annual expenses. Car registration, insurance renewals, subscriptions billed annually. These catch people off guard because they don't come up every month. Solution: add up all your annual expenses and divide by 12. Put that amount in a "sinking fund" category every month. When the bill arrives, the money's already there.

Irregular groceries. Most people underestimate their food spending by about 30%. Track it for real, for one month, before you set this number.

"Just one thing" spending. The random purchases that don't fit a category but add up to a lot. Give this its own line item. Call it miscellaneous, call it random spending, call it "life happens." Give it a real number.


What to do when you blow the budget

You will blow the budget. Everyone does, especially in the first few months.

Here's what to do: note which category went over, move money from a less important category to cover it, and move on. Don't abandon the whole budget because one category failed.

The goal isn't a perfect month. The goal is a system you keep using. A slightly imperfect budget used consistently will change your finances. A perfect budget abandoned after two weeks will not.


A realistic first month

Here's what to expect: the first month will feel awkward. You'll forget to track some things. You'll underestimate some categories. You'll probably end the month slightly over in at least one area.

That's fine. That's information. Adjust, and go again.

By month two it'll feel more natural. By month three you'll wonder how you ever managed money without it.

The zero-based budget is the foundation everything else is built on. Debt payoff works better when you know exactly how much you have to throw at it each month. Investing works better when you've deliberately carved out money for it rather than hoping there's some left at the end.

Start here. Everything else follows.


*Want me awesome budget starter template? Grab it here, it's a simple zero-based budget you can fill in tonight. Get it here: Zero based budget calculator*

*Next read: How to start investing in your 30s →

How to Start Investing in Your 30’s, 40’s and beyond (No, It's Not Too Late)

Let me say this clearly, right at the top, because you probably need to hear it:

You are not too late.

I know, because I was you. I opened my first brokerage account in my 30s. I had read the articles. I had seen the compound interest charts that show you what happens if you start at 22 versus 32. I had done the math and felt the particular kind of dread that comes from realising you've already missed something.

Here's what I found out: the math that feels discouraging is also the math that shows you why starting now; today, this week, this month, is still enormously, life-changingly worth it.

This is what I wish someone had told me before I spent two years thinking about investing without actually doing it.

Why people in their 30s feel behind (and why the feeling is misleading)

The personal finance industry has a 22-year-old problem.

Almost all the standard advice; start your TFSA early, max your RRSP from your first job, let compound interest do the heavy lifting; is technically correct and practically useless for a 35-year-old who spent their 20s paying off debt, building a career, raising kids, or just surviving.

The "I should have started earlier" feeling is real. But it's also a trap, because the thing about compound interest is that it doesn't stop working when you turn 30. It just has fewer years to run. That's not a reason not to start. It's a reason to start now; because every year you wait is another year of growth you're leaving on the table.

A 35-year-old who starts investing today and invests consistently for 30 years will have significantly more money than a 35-year-old who waits until 40. Every year still matters. Every month still matters.

The best time to plant a tree was yesterday. The second-second-best time is today.


What I did when I started — and what I'd do differently

When I finally opened my brokerage account, I was overwhelmed. There were too many options, too many opinions, and too many people on the internet confidently telling me opposite things.

So I kept it simple. Simple turned out to be exactly right.

Here's what I actually did:

I opened a tax-advantaged retirement account first; a workplace pension/RRSP match if your employer offers one, or an individual retirement account (RRSP/TFSA in Canada, IRA/Roth IRA in the US, ISA in the UK, use whatever is available in your country). Tax-advantaged accounts mean the government is giving you free money in the form of tax savings. You always, (always), ALWAYS take the free money first.

I contributed at least enough to get my employer match, if one was offered. An employer match is a 50–100% instant return on your money. Nothing in the market will consistently beat that. This is the single most important action most employed people can take. Most reputable companies will do a 2-6% match. You get a tax deduction for both your contribution and your employers contributions (theirs also counts as taxable income) but free money is free money.

Then I kept it boring. I didn't pick stocks. I didn't try to time the market. I put my money into low-cost index funds; broadly diversified funds that track the overall market and I left it there. When I left an employer, I moved the money from their Institution to a discount brokerage, shed the mutual fund MER for low cost index funds and ETF’s and never looked back.

That last part is the hardest for most people. Doing nothing feels like you're not doing enough. But the research is overwhelming: most active investors underperform simple index funds and ETF’s over the long term. The boring strategy isn't the fallback strategy. It's the optimal strategy.


The basics you actually need to know

What is an index fund?

An index fund is a fund that holds a tiny slice of a large number of companies, often hundreds or thousands tracking an index like the S&P 500 (the 500 largest US companies). When the market goes up, your fund goes up. When the market goes down, your fund goes down. Over the long term, markets have historically gone up.

You're not betting on one company. You're betting on the general progress of the economy. That's a much safer bet.

**What is compound interest/compound growth?**

It's growth on your growth. Your investment earns a return. That return gets added to your balance. Next year, you earn a return on the larger balance. This repeats. Given enough time, the growth accelerates significantly. Starting at 35 instead of 25 means fewer years of compounding; but 25–30 years of compounding is still a lot of compounding. This is still probably the most visited site in my browser history: https://www.getsmarteraboutmoney.ca/calculators/compound-interest-calculator/

How much do you need to start?

Less than you think. Many index funds and brokerages have no minimum investment. You can start with whatever you have. The amount matters less than the habit. Start small, invest consistently, increase your contributions as your income grows. Here are a few of the more common starting places. I will get a very small referral fee if you use my links.

https://wealthsimple.com/invite/

https://start.questrade.com/

my referral code for questrade: 896107843498182 Please do use it if you’re opening account, it costs you no extra!

What about market crashes?

They happen. Regularly. The market dropped significantly in 2008, 2020, and several other times in between. In every case, it eventually recovered and went on to new highs. If you look at any stock market graph from the start of stock market graphs, they eventually all go up and to the right (not individual stocks, but overall market graphs. This is a key detail).

For a long-term investor, which you are, if you're in your 30s investing for a retirement 25–30 years away; a market crash is a sale. You're buying the same assets at a lower price. The investors who panic and sell during crashes are the ones who lock in losses. The investors who hold, or better yet keep buying, are the ones who come out ahead. Perhaps the greatest investor of all time (Warren Buffet) has an infamous quote: “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

This is easy to say, but genuinely hard to do when your account balance drops 30% in a month. The answer is to research your purchases, understand what you own, and that will give you the confidence to believe in the long-term trajectory, and not look at your account every day.

A step-by-step starting point for late starters

Step 1: Clear high-interest debt first

If you have debt with interest rates above roughly 6–7%, paying that off is almost always a better return than investing. A guaranteed 20% return (eliminating a 20% interest credit card) beats an uncertain 8–10% market return.

Exception: always contribute enough to get your employer match before paying down debt. The match beats everything.

Step 2: Build a small emergency fund

Three to six months of expenses in a separate high interest savings account before you invest aggressively. This stops you from being forced to sell investments at the worst possible moment because you needed the cash. Making it harder to get at means you’re less likely to dip into it in a pinch.

Step 3: Open the right account

Use tax-advantaged accounts first. In Canada, that means TFSA (tax-free growth, flexible withdrawals) and RRSP (tax deduction now, pay tax on withdrawal in retirement). Contribution room varies — check yours on CRA My Account or your tax return.

In the US: Roth IRA (tax-free growth, pay tax now) or traditional IRA (tax deduction now). If you have an employer 401(k) with a match; use it.

Step 4: Choose simple investments

For most people starting out, one or two broadly diversified low-cost index funds is all you need. Look for:
- Low management expense ratios (MER) under 0.25% is good, under 0.10% is excellent
- Broad market exposure; total market or S&P 500 index funds
- Consistent contribution plan; invest the same amount every month regardless of what the market is doing

Step 5: Automate and mostly ignore it

Set up automatic contributions so the money moves without you having to decide every month. Review your portfolio once or twice a year, not every day. Resist the urge to react to news and market movement. Let time do its job.


The mindset shift that changed everything for me

The biggest thing that changed when I started investing wasn't the money.

It was the feeling of being on the right side of the equation.

For years, I felt like money was something that happened to me; debt that accumulated, bills that arrived, balances that crept up. Investing was the first time I felt like I was doing something intentional and forward-looking with my finances.

Even in the early months when the account balance was small and the growth was invisible, something was different. I was building something. Slowly, imperfectly, later than the internet said I should have; but building.

That feeling compounds too.

You are not too late. You're just getting started. And getting started even now, even here, is the whole thing.

*First step: get the free budget starter guide so you know exactly how much you have to invest each month. [Link to lead magnet]*

*Also read: [How I paid off $38k in debt — the full story →]*

***I'm not a licensed financial advisor. This content is for educational purposes based on personal experience