The Zero-Based Budget That Helped Me Pay Off $87,000 in Debt in 26 Months

Here’s how assigning every dollar a job helped me eliminate debt and rebuild my financial future.

Getting out of debt starts The simple budgeting system that helped me eliminate debt. Andy Dean Photography/Shutterstock

Twenty-six months ago, I was carrying $87,000 in combined debt: $31,000 in student loans, $24,000 on credit cards, $18,000 on a car loan, and $14,000 in medical bills. My minimum monthly payments consumed $1,870—nearly 35 percent of my take-home pay. The weight of it affected everything: my sleep, my relationships, and my ability to imagine a future beyond the next payment due date.

Today, the balance is zero. I did it using a modified zero-based budgeting system that forced every dollar to justify its existence. Here’s exactly how it worked.

What Zero-Based Budgeting Actually Means

The concept is simple: your income minus all planned expenditures (including savings and debt payments) equals zero. Every dollar has an assigned purpose before the month begins. There’s no “leftover” money floating around to be spent impulsively.