How One Pay Raise Can Lead to Debt Freedom

May 19, 2017

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My day had come. I had put in the extra effort and made a true impact on multiple important pieces of business I was working on. It was time for a pay raise.

It was early 2010 and I had worked up the courage to ask my manager for the compensation I thought I deserved. As they say, “the squeaky wheel gets the grease,” right? I find this saying to be true, but you also better be a pretty damn impressive wheel! Given that sentiment, I had made sure that I was going above and beyond the call of duty before I requested the raise.

After writing a letter outlining the positive changes I had made to our business and having an in-person discussion reviewing my salary requests, it was time to hear what management had to say. I walked into one of our office meeting spaces and sat across the table from my supervisor. I looked across the table at him and he looked back at me. From the smile on his face, I knew this was going to be a happy message for him to deliver.

“For your hard work and dedication to the company for the past three years, we are increasing your salary from $60,000 to $70,000. A 17% raise!”  



This was exactly the news I was waiting for! I could not contain my excitement. My face was glowing with pride. I thoroughly thanked my supervisor and let him know that I would continue to meet and exceed my yearly goals in the future.

For a 28-year-old guy, this was an incredible moment for me. $10,000 freaking dollars! I felt rich! I felt like I had REALLY made it!

What to do with an extra $10,000?

After a celebratory dinner and cocktail with my fiancée and a good night’s sleep, I woke up thinking about this new-found money coming into my life. What could I do with it to make a big impact on my future? How could I use it to start my marriage off on the right foot?

Prior to this big moment, I had made a few bonehead money moves like …

1. Using my Home Equity Line of Credit (HELOC) as an ATM to go on tropical vacations as I pleased …

Jamaica Me Broke Mon
Jamaica Me Broke Mon

2. Buying my fiancee’s engagement ring on borrowed student loans

The Day of our Engagement
Will you marry me? And my debt?

3. Going into $40k of student loan debt to get my MBA

MBA Graduation
Congrats on the MBA (Many Bills Arriving)!

Although these purchases, moments and experiences brought me a ton of joy, the “I want it now” nature of them left me with a sizable amount of debt. Around this time in my life, I had around $30,000 that I owed in student loans and through my HELOC.

On top of that, my house was WAY underwater. I owed about $175k on a house that was valued at $155k! (Ugh, I thought becoming a homeowner was what I was SUPPOSED to do!)

My net worth at the time was around -$50,000. Yes, that's a negative symbol.

As much as I REALLY enjoyed vacations, eating nice dinners and partying with my friends, I was now more excited about ridding debt from my life and increasing my net worth. I had a choice really … Take this new $10,000 raise and keep spending and living for today or make a change and plan for the future.

The Anti-Overnight Success Story

Luckily, I had gotten hooked up with a smart woman who didn’t have any debt in her life. Nicole and I were in lockstep when it came to eliminating my debt. I’d love to tell you that it was all eliminated from my life overnight, but in all honesty, most difficult feats take time, dedication and a lot of trial and error. It was no different for us.


With that $10,000 pay increase, I started ratcheting up my debt payments on both my student loans and my HELOC. I made some positive progress on the debt as a single guy, but when Nicole and I got married, we really started clobbering it. Double income! Woo hoo!

Almost immediately after our wedding in May, the HELOC was eliminated from our lives. Gone! Paid off! Bye-bye!

Our next goal was to completely pay off Nicole’s 2008 Audi A4 that she had been leasing and completely pay off my student loans. In September 2010, the car balance was $20,908 and my student loan balance was $27,124. Our goal was to pay it ALL off in one year.


By the time September 2011 rolled around, Nicole was the proud owner of an Audi A4 and I was free and clear of my student loan debt!

Here are the details of how we paid off that $48,032 of debt in 12 months.


We were having so much fun with this debt destruction game of ours that we thought … “Wouldn’t it be cool if we didn’t have a mortgage? We could have so much more money to travel, save for retirement and fund our future children’s college funds!”

That big dream became our north star for the next 5 years. We did our best to save up as much money as possible so we could have big down payment on our next home. 


After saving up a 43% down payment, we bought our forever house at the end of the year. We committed to each other that we’d have our 15-year mortgage paid off in only 5 years.  

After moving into our new home, there were a few other major things that happened in our life this year. I changed jobs, Nicole became pregnant with our second child and we decided that 2014 would be the year that she would stay at home with the kids. The curve balls kept coming, but we were ready.


We stuck to our complete debt freedom plan and continued to clobber our mortgage principal over the next 3 years. Our family grew from two to four (Zoey is now 5 and Calvin is turning 3 this weekend).

Hill Family 2016
Nicole, Zoey, Andy and Calvin

Today, our mortgage balance stands at $31,306. We’re set to pay off our mortgage by the end of this year. 1 year ahead of schedule! 

Were we able to completely rid debt from our lives overnight? Oh no … It took 5 years of dedication, focus, monthly budgeting sessions, failure, educating ourselves, patience and true marital partnership to get here.

Living for Today with the $10k

I could have gone in the complete opposite direction as well. In 2010, when I got that raise, I could have EASILY decided to upgrade my car, my clothes and my overall lifestyle. That $10k would've gotten eaten up easily!

And then when the next raise came around, I would level up my lifestyle again! The debt and my accumulation of “stuff” would continue to pile up while my net worth and my family’s future would suffer. Keeping up with the Joneses, right?!

After making my own personal money mistakes and after these past 7 years of financial progress, I say forget the Joneses. They’re probably drowning in debt.

What would your life be like with no debt?


Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.


    • Thanks for the compliment Lance! It’s the wild roller coaster of life. We’re excited for the next twists and turns coming up.

  • What an inspiring story! Sometimes all it takes it one good move to snowball into years of advantage! It’s easy to let raises turn into lifestyle creep. It’s awesome that you are one year ahead of schedule on your mortgage pay off!

    • Thank you so much Jax! It’s been a long road. I checked out your site too. More degrees than a thermometer?!? Ha! I love when people can mix a sense of humor in with personal finance!


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