This New Year’s Resolution: Get Out of Debt6 min read

Step #1

We decided to use the Snowball Method to get out of debt.  There are quite a few methods out there, but we felt that the Snowball Method was the most advantageous to us.  The reasoning is that we needed the extra psychological boosts that the Snowball Method is known for giving.

Step #2

After picking the method, we listed out each of our debts in order, according to the way that the Snowball Method does it (If you ended up using a different method, list your debts in that methods' specific order).

Step #3

Next, we worked on our budget.  We worked on compressing our expenses and increase our savings each month.  This step took a lot of work...but after analyzing how we were spending our money, we realized that we actually had a lot more that we could save each month.

Step #4

Once we had worked on the budgeting piece, we started putting that lump of extra savings each month towards our debt, in a systematic approach.  We paid the minimum payments on each debt, except for the first debt on our list.

Step #5

After we finished off the first debt, we continued down the list by taking the minimum payment from debt #1 and added that amount into the extra funds that we had to pay our debts each month.  We continued in this pattern until we had all of our debts paid off.


If you are struggling with debt and you also need to make a New Year's resolution for 2017, why not tackle both at the same time?  Just imagine what being debt free would do for you and your family?!  I'm willing to bet that your life would look a lot less stressful and way more fun!

I'll finish with this final excerpt from my article:

"Now that we are debt free, our world has changed!  And I hope that your world can change too...Keep your head up and your shoulders back... be confident that you can get this done!"

I hope 2017 will prove to be a breakthrough year for your financial life.  Cheers!

Are you ready to finally take control of your finances? Let my budgeting spreadsheets help!

Just fill out the form below and I'll send you the link to get the same exact budgeting spreadsheets that I use each month!

Included in the workbook:


  • Monthly budget form
  • Breakdown of savings form (for your sinking funds)
  • Overview of your financial plan

I've been using these same forms since August 2011 and have grown my family's net worth 500% tracking our money using these forms!

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Jacob Merkley

I am an outdoor enthusiast. I love everything to do with being outside, but my favorite activities are snowboarding, boating, camping, and backpacking. I also love to read a good book, play the piano, binge watch a Netflix show, and spend time with my wife and daughter.Career wise, I spent six years in the accounting, financial, and retirement realms before I turned my attention to creating this website. I received my Bachelor’s Degree in Accounting in 2016. While I only took a few financial classes with my accounting degree, my finance smarts come from my dad, who taught me everything I needed to know about money when I was young boy. In fact, he had me investing my money in mutual funds before I was even 12! Through the years, I have learned other key life skills that have helped me become the man I am today.

Latest posts by Jacob Merkley (see all)

Posted in Budgeting, Debt Free Stories, Family, Family Finances, Finances, Guest Post, Paying Off Debt, Saving Money and tagged , , , , .


  1. You did awesome!

    The only debt we have is our mortgage at the moment. I cannot stand being in credit card debt–if I can’t pay it off next month, I won’t use it.
    Amber Myers recently posted…Because She Asked Me ToMy Profile

  2. Thanks for reading and commenting Amber. Nice job on having that mentality. Credit card debt can be really bad if you can’t pay it off. Great work on keeping your debt to just your mortgage!

  3. Congratulations on getting out of debt so quickly! I have used the snowball method myself and it really does work like a charm.

    • Thanks Brandi! It does work indeed! and thanks for the congrats.
      Jacob Merkley recently posted…Retirement: Your Permanent VacationMy Profile

  4. Congrats Jacob.

    I’m a big believer in the snowball method as well. It’s not always the mathematically correct method, but it definitely makes you feel so good as you pay off loans.

    Since the start of the year, I’ve been going back and forth on whether I should max retirement accounts or destroy my student loans. I’ve been reading a bunch about people tackling their debt first, and this post might just motivate me to make that decision.

    Thanks for sharing your story. $16k is a great accomplishment.

    • Derek, thanks for reading! The get out of debt vs. retirement is a big topic right now. For me, I like the idea of moving past paying other people, so that then I can REALLY start paying my future self. But I know that sometimes the math works out better when you contribute to your retirement. Such a hard choice! Good luck!

      • Hi Jacob. I am currently in the same situation you were. I am focussing solely on paying off over $20,000 in debt this year. My methods are the same as yours and I’m happy to report my first creditor will be paid off in April (can’t wait!!).

        For years I continued putting some money into retirement savings and struggled to pay off debt. In hindsight, I realize I used the “but I’m putting money into retirement” was a crutch and an excuse for me to not becoming debt free. Now that I’m focussing on debt only this year (with the exception of employer sponsored investments), I am finally gaining some ground and seeing a real impact on my net worth.

        I do understand that I may have been better off putting more money in investments as well as paying off debt. The added stress of having debt isn’t worth it for me though. Then again, I’ve been carrying this debt for many, many years. If I was more diligent when I was younger about both saving for retirement and paying off debt, I may feel differently. The amount I was putting into retirement savings and the type of investment I put it in has barely made a difference though. This was, of course, my own doing and my own shortcomings.
        For me, focussing on only one area, becoming debt free, is absolutely necessary before I can strive toward retirement (early retirement, that is).

        Thanks for the article! I enjoyed it. 🙂

  5. Steven, thanks for sharing that. I think it’s awesome you took Dave Ramsey’s course. I’m a big fan of him as well.

    I feel like you’re exactly right. We were throwing money at our student loans about six months ago and it was definitely working. For some reason, I keep flip flopping back to investing – I seem to like it better.

    I’m starting to feel like the market is overvalued and it might be a better gamble to tackle the debt now. I’ll probably read through your post and the forums a few more times. I’ll let you know how it goes.

  6. Congrats on being debt free! This is a helpful post. I really like your New Year Resolution Poem the top. Great post!

  7. Getting out of debt is a great feeling! Thankfully the only debt we have these days is our mortgage

    • Congrats Courtney. That is an awesome place to be at. You are definitely ahead of the curve! Keep up the great work.

  8. What a great plan to get debt-free. Really appreciated your poem. Its was practical and inspiring.
    The Travel Ninjas recently posted…9 Romantic Things To Do in Bali That Don’t Break the BankMy Profile

    • Thanks Caitlin. The snowball method really really works. There are other methods, that can definitely work for some people, but I’ve always found that the psychological effect is worth it! Thanks for reading.

  9. What a great idea to help tackle debt problems! We too have been in debt for years, but as of this year we’re not thanks to my husband’s budgeting skills.
    Elizabeth recently posted…Curried Butternut Squash SoupMy Profile

    • Nice job Elizabeth (and husband). Keep up the great work on your finances, and thanks for reading!

  10. Great resolution. I think prioritizing your finances is such a great way to start off the new year. It’s not a good feeling to be in debt!

    • Divya, you are right! I had such a bad feeling when we were still in debt. I can’t tell you how wonderful it is to make money and know that it’s ALL coming to me! I don’t owe anyone a cent. Thanks for reading.

  11. I am in debt at the moment and its not a nice feeling. I definitely feel that spreadsheets could help me manage my finances more!
    Ana De- Jesus recently posted…Why Legally Blonde’s Elle Woods Is My WCWMy Profile

    • Ana – I’m sorry you aren’t feeling well about your current situation with debt. It’s not a fun place to be, and having been there, I know how you feel. Spreadsheets can definitely help you manage your finances more, I absolutely agree.

      Hang in there, and make sure you make a plan to work down your debt. I used the debt snowball method, but there are other methods out there too. If you can get focused, and have a plan, you too can one day be there! Good luck! I know you can do it.

  12. What an interesting post! The snowball method really works. Congrats that you got out of debt eventually!:)

    • Thanks Chi Le! I agree, the snowball method is great. Mathematically, the Avalanche method is better, but I’ve always felt that the psychological win is better for me than the math working out in my favor. Thanks for reading!

  13. Absolutely loved this post. My husband and I paid off 40K in 9 months and also just introduced our little babes into the world (4 months old).

    We follow Dave Ramsey.

    Our goal this year is to save as much as we paid in debt last year! Cheers! 🙂

  14. Great resolution! I’m bookmarking this for future reference. This needs to be something that hubby and I focus on this year.

    • Thanks for the read and promise to come back and work on this with your hubby. Being on the same page together is a big plus!

  15. This is such an amazing resolution to have. I know that there are so many people that also would love to be able to get out of debt.

    • Thanks for reading! Everyone can get out of debt…sure it will take longer and more will power for larger debt balances, but it IS possible!

  16. I know that we were right there with debt not too long ago and it can be frustrating. I think that sharing this with others could make them feel like there is some hope.

  17. I dont’ have much debt, just trying to get rid of my student loans. I had never heard of this method before, but I might have to try it out now!

    • Krysten, thanks for stopping by! Definitely give it a try…even if you don’t have a lot left, it’s worth a shot. The beauty of this process was that it helped my wife and I to feel like our actions were purposeful and we were in control. It’s a great feeling with debt.

  18. I believe people give up too easily. Saving’s really feasible especially with how you guys structured it here. It’s always an extraordinary pleasant feeling when you rise up from debt!

  19. I like it. The idea of breaking down your debts and your expenses will give you a better view of how you’re going to budget your money. I think this is a pretty cool system.

  20. These are indeed great suggestions. Indeed being debt free leads to a stressfree life. A life to enjoy without getting into financial stress.

  21. It feels awesome to be able to get rid of your debt and without any help as well. I’m sure this plan is going to help a lot of people. It’s nice to know that you can save more for your family.

  22. I love your poem. especially 1st para is awesome. I have started following budget from this year and I hope I keep up with that.

    • Thanks for reading Urvi. Staying with a budget it the first part. Once you feel like you have that down, you can create a savings plan, work on debt, retirement, and finally invest. Good Luck!

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