How to Pay off $54,000 in Debt and Save $70,000 in Cash in 2.5 Years

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This debt success story features the journey of Allan Liwanag and his incredible walk from deep in debt to debt-free and stocked up on savings. 

Tell us a bit about yourself.

I am a budget analyst by day and a personal finance blogger by night. I am a father to my beautiful daughter, Adriana, and a loving husband to my loving wife, Ana Marie. I own a personal finance blog called The Practical Saver, which focuses on family, life, and money.

How much debt did you start out with?

I started with a debt of at $40K. This did not include the car loan I had to get when we transferred from Las Vegas to Maryland. In Las Vegas, my wife and I used public transportation. In Maryland, we have to use a private car because public transportation is not reliable. This car cost me $14K. In total, so altogether I was indebted to the tune of at $54K.

When was the turning point when you realized you were in over your head?

When I realized that it was really hard living in debt.

Back then, I was just starting to build a family. My wife was in the Philippines during the time when I amassed this debt. I realized that I didn’t want to put my wife and our budding family into an uncontrollable debt situation because I knew the horrible impact that debt could have on a family. I didn’t want to start a family living in a poor situation.

What plan did you formulate to pay it off early?

I planned to pay as much as I could using my salary and a bunch of incomes I got from side hustles or part-time jobs.

Since I didn’t have money saved in my accounts, I decided to focus on building my savings account at the same time while we were paying my debt.

My formula was simply putting more on savings and working with the creditors to pay my debt fast. Luckily, the creditors worked with me as I was able to make payment arrangements on all of my debt.

Allan and his family paid off 54k in Debt in just over two years.

Allan and his family.

What resources did you use to help you through this process?

Since I was really good with MS Excel, I used it faithfully for budgeting. I created my own spreadsheet and followed it exactly as how the income and expenses were laid out. I also used the debt-solving method known as Avalanche method. I paid off the debts with the highest interest rates while paying twice above the minimum amounts from the cards with lower interest rates.

I also opted to work on side hustles, which allowed me to generate more income for savings and debt repayment purposes. This additional income allowed me to pay my debt fast and save at least $70K in just 2.5 years.

We used The Debt Snowball to pay off $52,000 in debt in 18 months!

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What were the biggest roadblocks/setbacks you faced to paying it all off?

For me, the biggest roadblock/setback was living below our means and accepting immediate changes. We had been living in Las Vegas for a few months before we moved to Maryland. My wife was new in the United States and 3 months later we moved to Maryland. Basically, everything was new to us. We were in a different state, my wife was new in the U.S., I had a new job, and so many things that came all at the same time. I know that change is part of life, but these changes came all at the same time. They came when I was in deep debt. During those years, we were adapting to the changes so fast while we were living below our means. It was hard at first but we learned to appreciate it.

I can still remember, like it was just yesterday, the things that we did to make sure that we met our needs and still lived below our means. Here are the things we did:


  1. We cooked at home and stayed away from eating out for almost 2.5 years.
  2. When we wanted to eat restaurant foods, we bought the ingredients from the grocery stores and cooked everything at home. I found recipes online that replicated those meals offered in the restaurants.
  3. We planted and re-planted our vegetables so we didn’t have to buy them over and over again.
  4. We used coupons like crazy so that I learned how to become an extreme couponer in the process. Yes, I got to a point where I was able to get a lot of grocery items for free.
  5. I would go fishing and crabbing using my friends’ fishing rods and took home the food I had even when it wasn’t a lot.


  1. We went to thrift stores to buy the clothes we needed.
  2. I voluntary joined some community activities. As a token of appreciation, we were given clothes, some were new and some were old.
  3. Friends and family gave us clothes especially for our little one, even when we didn’t ask for any.
  4. We used old t-shirts and other clothes for other purposes. We used old clothing as rugs, kitchen towels, wipes, among others.
  5. We repaired my work clothes and used them for years. We bought dyes and other materials to make my clothes look new.

Furniture and Fixtures

  1. We looked at Craigslist and other advertisement platforms to get free furniture. I refinished them to make them brand new again and sold some of them for profit.
  2. We helped people move in or out of their apartments. I was either given money or furniture as payment for my work.


  1. We chose to use Netflix and Hulu instead of going out to watch movies and pay for extras like popcorn and soda, among others.
  2. We cooked restaurant foods at home by using ingredients from our pantry and from the ones we bought from the grocery stores.
  3. We invited our friends and family to visit us and have fun with them in the form of board games, trivia games, and others. Sometimes, we invited them or they just came to our apartment for normal social gatherings.
  4. We would go to state parks and have fun with people we met there. My kid loved going there because she got to play with other kids.


  1. Since public transportation was not reliable where I live, I had to buy a car. My wife and I shared the car. Most of the times, I would use my bike to go to work except during extreme weather. This saved us a lot of money by not paying for two car loans, insurance, repair, and maintenance, among others.


What were you doing for a living while you were paying off the debt?

My day job was a budget analyst. Kinda awkward, right? I was a budget analyst but my personal budget and finances were in not-so-nice shape. After work and on the weekends, I did a lot of part-time jobs. I remember buying or getting old furniture and selling them as refinished, revitalized furniture. I tutored high school kids, helped renters move in or out of their apartments, did other people’s tax returns, among others. Anything that I was good at and could make money, I did it.

How long did it take you to pay it off?

It took me 2.5 years to pay off my debt. In those 2.5 years, I was also able to save at least $70K. I know the number because I started with close to $0 in my bank account.

How did your life change once you paid it all off?

My wife and I felt relieved and free at last from the horrors attached to debt and the sacrifices we had to make to get through this debt-laden phase. The lessons we learned from paying our debt truly helped and continuously help us to be better at managing our finances. The lessons we learned serve as the foundation for a better financial future for our family – especially for our daughter.

What practical tips do you have for people looking to pay off their debt?

Hmmm. Can I say a lot? I can say that these tips helped us go through a difficult phase in our lives. The lessons we learned from paying the debt helped us become better people in the process. Here are my tips for those who are looking into paying off their debt:

  1. Work as a team. Often times, in bad situations like this, it is so easy to blame the other person. My wife and I learned to face the challenge without blaming each other. We figured out that it was in our best interests to work together and not work against each other.
  2. Communicate with the lenders. A lot of people told me that credit card companies are the most vicious entities out there. I say not really. When you work with the creditors, tell them your situation, and show your eagerness or take full responsibility for paying your debt. They will work with you. I know they worked with us through the debt-repayment process. You can also consider refinancing your debt with SoFi to pay it off faster too.
  3. Count your blessings. Many times, we tend to look at our faults and mistakes more than we look at our blessings. My wife and I learned to appreciate, be happy, and be thankful for what we had and didn’t have. We kept a positive outlook even when the situation we were in was bad.
  4. Take matters one day at a time. It is easy to look forward and question what your future would look like. For us, we took things one day at a time. We realized that we must face the present in order to move on to the future. As cliché as it may sound, this is true. You can never have a better future if you present is filled with uncertainties and hopelessness.
  5. Be happy. No matter what life throws at you, just be happy. Remember that we all go through ups and down in life. It doesn’t mean that you’ll be experiencing all the downs forever.

To learn more about Allan’s journey and to hear his tips for dumping debt and building wealth, go to his website, 

Note: This is part of a series called “Debt Success Stories” which features people who were able to pay off a significant amount of debt. If you have a Debt Success Story I would love to hear about it. Please visit the contact page to let me know the details.

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3 responses to “How to Pay off $54,000 in Debt and Save $70,000 in Cash in 2.5 Years”

  1. FinanceSuperhero says:

    Deacon, thanks for asking Allan to share his story. I found it fascinating and highly motivating. I am eager to share my story in a few months when Mrs. Superhero and I rid ourselves of our remaining non-mortgage debt. Until then, I will sit back in awe of you both.

    • Deacon Hayes says:

      You’re absolutely welcome. It would be awesome to share your debt success story as well, so definitely let me know as soon as you knock out all the debt!

  2. Michael says:

    Hi Allan,

    It is amazing to see the different side gigs you did and the measures you took to live below your means to pay off debt.


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