Monica Louie: How We Paid Off a $52,000 HELOC (and More) in Less Than 2 Years Monica Louie: How We Paid Off a $52,000 HELOC (and More) in Less Than 2 Years
In less than 2 years, Mike and Monica Louie paid off their student loans, their HELOC, and part of their mortgage. Here is how... Monica Louie: How We Paid Off a $52,000 HELOC (and More) in Less Than 2 Years

This article is part of our highlight May Money Stories series. This month we are featuring guest bloggers who will share their own true money stories and their personal journeys to overcoming debt. Please check back to our blog every Tuesday of this month to read our latest guest feature.

Between August 2013 and August 2015, my husband, Mike, and I paid off $120,000 of debt on a single, middle-class income. We paid off both of our student loans, a home equity line of credit (HELOC), and part of our mortgage. Plus, we added $40,000 to savings.

Here Is How We Did It…

When we were newly married, Mike and I bought what we thought was our dream house in 2009. It was an awesome deal because it was a short sale so we jumped on the opportunity. Six bedrooms and all the upgrades we could want. It was in a safe neighborhood next to the elementary and middle schools. We imagined raising our future kids in this home, and we pictured them walking to school one day. When we moved in, I told Mike that I never wanted to move again. I envisioned us living there until we became empty nesters.

Never say never.

In 2011, we were blessed with our first child — a boy named Jayden. That’s when I caught the bug. The bug that so many of my friends had caught when they became first-time moms. I desperately wanted to be home with him. I didn’t want to put him in daycare for 50 hours each week and only get to spend a couple of hours with him each day before bedtime. But financially, we couldn’t make it work. I had to bring in an income.

To reduce our monthly expenses, we paid off our cars as quickly as we could. At that point, I was able to transition to working part-time, which was the perfect compromise for the time-being. By the time a year went by, my husband earned a promotion, and we found out that I was pregnant with our second child. We built up our savings, and we were finally at a place financially where we could afford for me to stay home full-time.

We Saved so I Could Quit My Job

Wednesday, May 1, 2013, was my last day of work. I was excited and nervous all at the same time. Excited to be able to spend more time with my son before our daughter was born later that year. And nervous that my desire to be home with our kids could potentially cause financial hardship for our family. By the end of June, we realized that the path we were on was headed in the wrong direction. We saw our savings dip, and we knew we had to make a change before we depleted our savings entirely. Before I left my job, we ran the numbers, and my husband’s income should have been enough to cover our expenses. So I knew we had to keep a closer eye on our spending.

With my background in finance, I took it upon myself to learn how we could be smarter with our money. We had always been pretty frugal, but we knew we could do better. That’s when I threw myself into the personal finance world and came across a story of a young family — very similar to ours — who paid off all of their debt including their mortgage! I knew if they could do it, then so could we!

We Made a Goal to Become Debt-Free

My husband was on board, so we decided to make it our goal to pay off all of our debt, including our mortgage, by the time we turned forty — in eight years! In August 2013, we started our debt-free journey with a total of $320,000 of debt — $38,000 in student loans, $52,000 on a home equity line of credit (HELOC), and $230,000 on our mortgage. We used the debt snowball method to pay off our student loans first since they had the smallest balances, and then we tackled our HELOC. We opened the HELOC in 2010 because we had some existing debt that we wanted to pay off. The bank suggested that a HELOC was a better option for us than a home equity loan because the home equity loan would have slightly more upfront costs and requirements.

However, we didn’t realize that our HELOC had an annual fee and that the interest rate was variable — until we started our debt freedom plan and began paying attention to the details. And we noticed that as the economy rebounded, our interest rate slowly increased. While a HELOC cost a little less comparatively up front, a home equity loan generally comes with a fixed rate and could’ve saved us a bit more money in the long-run.

>> Calculate and start accessing your home equity

To pay off the debt quickly, I started tracking every penny we spent and created a detailed budget. We cut expenses where we could. We canceled services that we didn’t need, and Mike started taking the bus to work to save on gas. We also focused on bringing in extra income. Mike worked overtime whenever he could. And we sold things left and right, including a car and a motorcycle. And we had an ultra-successful garage sale that brought in $1,600 in one weekend!

We made considerable progress through 2014, and by January 2015, we paid off almost $75,000 of debt!

In order to keep us on track to be 100% debt-free by the time we turned forty, we set big goals for 2015. Our plan was to pay off the remaining amount on our HELOC and boost our emergency fund to $25,000. That meant we had to come up with more than $40,000! Unfortunately, by May 2015, our progress had slowed. We paid off almost $90,000 of debt since we started our journey, but we were running out of things to sell.

We Decided to Sell Our “Dream” House

That’s when we decided to sell our house. It was a tough decision, but when we weighed the pros and cons, we were confident that we were making the best one for our family. The truth was we weren’t using two of the rooms, and the value had appreciated tremendously since we bought the house six years earlier. So we had a lot of equity we could tap into to reach our goals faster. We did a quick search online and realized that we could find a smaller house in a nice neighborhood close by. And less house would mean less upkeep, lower taxes, and lower utility bills.

In August 2015, we sold our six-bedroom house and bought a three-bedroom house. By doing so, we were able to pay off the remaining balance on our HELOC, lower our mortgage balance to $200,000, and put $40,000 into savings! In two years, we paid off $120,000 of debt on a single, middle-class income! And we now live in a home that is better suited for our family and our financial goals.

We’re still working on paying off our mortgage by the time we turn forty. But we already feel like we’ve broken free from debt. We realized that getting out of debt rapidly would save us hundreds of thousands of dollars in interest. And we knew we could sleep better at night without the payments. Becoming debt-free, aside from our mortgage, has given us peace of mind and a sense of security that would be impossible to achieve with a bunch of debt weighing on our shoulders. When we pay off our mortgage, we’ll celebrate by taking a family trip to Disney World. And we’ll be able to save for our kids’ college funds and our own retirement savings much faster.

This is our story, but I firmly believe that anyone can do this.

Debt does not have to last forever. While debt can be useful when needing to make a major purchase, it is definitely possible to eliminate it quickly, especially when you have a specific goal and a plan to get you there.


Explore your Debt Consolidation options.


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Monica Louie

Monica Louie

Monica Louie is professional finance blogger and runs the blog She is a financial coach who helps young families break free from debt and achieve financial freedom. With a bachelor’s degree in finance and her 10+ years of experience in financial services, Monica took control of her family’s financial situation when she left her day job to stay home with her two young children. Since then, she and her husband paid off $120,000 of debt in two years on a single, middle-class income.

  • Erin Lynch

    Kudos to you and being debt free by 40! This article is a bit scary to me, as we just closed on our “dream” house. But we’re going to do our best to pay it off as quickly as possible… I’m just going to need to keep checking in with your posts for more inspiration!

    • Monica Louie

      Thank you, Erin! Congratulations on buying your dream house! I love that you plan to pay it off early! That’s definitely the way to go!

  • Lindsay

    Great article! What a great success story 🙂

    • Monica Louie

      Thanks so much, Lindsay!

  • Create/Enjoy

    Monica’s story is inspiring! Great example of how you can achieve financial goals!

    • Monica Louie

      Thank you so much! It was an honor to share it here.

  • Catherine

    There’s so much you learn once you begin paying close attention to the details! We’re in the midst of figuring those out and deciding how to best protect our financial future.

    • Monica Louie

      That’s the perfect first step, Catherine!

  • Jenni

    Such an inspiration. Debt is a hard one and reading how other people break free from it, even if they are in different financial situations than myself, it is a helpful way to check alternative routes to being debt free.

    • Monica Louie

      Thanks, Jenni! That’s why I am so honored to share our story. It was another family’s story who influenced us to make a change, and I’m hoping ours will help others, as well.

  • Marlynn [UrbanBlissLife]

    a wonderful inspiration! I love how specific and honest Monica gets, which is so helpful.

    • Monica Louie

      Thank you so much, Marlynn!