A couple paid off their $234,000 mortgage in 5 years and are on track to be millionaires in their 30s. Here are the savings and investment strategies they use. (2024)

They haven't always been in control of their finances. Brennan graduated from college in 2014 with a finance degree, a couple of major expenses, and no immediate income. He had an accounting job lined up, but it didn't start until eight months after graduation. He was living at home to save on rent and kept his day-to-day expenses low. As for his debt, though, "I was literally borrowing from my fiancée to pay down my student loans, the ring, and my car," he said.

He started working as a CPA in 2015 and was able to make minimum payments on his loans, but further extended his debt when he and Erin, who works in interior design sales, bought a $233,700 home in 2016.

"There was this period where we were just floating and trying to make ends meet and pay the minimum on everything," said Brennan. After a year of hardly making a dent in their debt, the couple decided to buckle down.

The first step Brennan took was learning more about personal finance. "We had this problem and I wanted to solve it, so I went to Google, I went to YouTube, I read books."

Brennan and Erin, both 30, are not only debt free today, but have over $750,000 in assets, including their home, retirement accounts, and other investments. Insider reviewed copies of their mortgage statements and investment accounts that showed these details.

Here's how the couple paid off their six-figure debt and plan to hit a net worth of $1 million in 2022.

Using the debt snowball method to get out of the red

Brennan and Erin started by getting organized and laying out on paper exactly how much debt they owed, along with the interest rate on each account. They also reviewed their spending from the past couple of months to understand where their money was going and where they could cut back in order to free up more cash.

"Little things added up​​ — eating out, house supplies, random spends at Target or Kroger," said Brennan. Simply by combing through their credit card statements, they found about $1,000 in miscellaneous spending each month that they could redirect to their loans.

They used the "debt snowball method," which involves tackling your smallest debts first. You pay the minimum payment on each debt except for your smallest one — on that one, you pay as much as your budget allows you to each month.

It's not always the most cost-efficient method, since you're not prioritizing by interest rate and could be saving your high-interest debts for last, but the idea is that you gain positive momentum by checking debts off the list.

Brennan and Erin's smallest debt was the $3,500 bed they bought when they moved into their house. They paid that down and then moved onto the $3,800 engagement ring. After that they paid off their cars and Brennan's student loans, until all they had remaining was their mortgage.

Paying off their mortgage in 5 years

When it came time to pay off their house, they'd already freed up a ton of cash by eliminating all of their other debts. Plus, they'd increased their income significantly. They negotiated raises at work and both earned extra income on the side: Erin designed kitchen spaces for clients using a software program called 2020 Design, and Brennan picked up construction gigs. They also sold old clothes on Poshmark.

Their biggest revenue stream came from Budgetdog, a company Brennan started in 2019 to help other people gain control of their finances. It started as an Instagram account that gave finance advice from a dog's perspective and evolved into a lucrative business that brings in up to $28,000 a month from client consultations, course sales, book sales, and promotional and affiliate revenue.

"Our income increased, our living standards stayed exactly the same, and our debt payments were gone, so we had a huge cushion and that's when we started attacking the home," said Brennan.

The amount they put towards their mortgage each month depended on their income. In June 2021, one of their highest-earning months with Budgetdog, they threw an extra $30,000 at the mortgage, Brennan said.

They made their final payment in August 2021. A month later, they had their first child and Brennan quit his CPA job to be a stay-at-home dad and run Budgetdog full-time.

Paying off the home was "anticlimactic in a sense," said Brennan. "You've been working on this goal for years. It's an automatic thing, putting in extra money towards it every single month, and all of a sudden you write a $9,000 check at the bank. It was absolutely mind-boggling. But then we got back to life. We were like, 'What's our next goal?'"

Saving up to 86% of their income and hitting $1 million in 2022

Now that the Schlagbaums are completely debt-free, they have a significant chunk of extra cash each month.

"September was the first month that we didn't have a mortgage and we saved 75% of our income," said Brennan. "The second month we saved 60%, the third month we saved 80%, and the fourth month, December, we saved 86%, which is a record high."

They keep some of their savings accessible in a checking account, but invest most of their money for the long-term. They have a handful of retirement accounts — two IRAs, a solo 401(k), Erin's employee stock ownership plan (ESOP), and a pension plan from Brennan's old company — as well as two health savings accounts (HSAs), and a brokerage account. They invest in index funds and ETFs. The only individual stock they own is Meta (FB) and it's a small allocation, Brennan said.

They have a small amount of money invested in crypto, he added. "I think a very small allocation, 2% to 5% of your portfolio, is a smart play. If you lose 100% of it, it's not going to hurt you, but you have the opportunity for significant gain by getting into the space."

Plus, they've already opened three investment accounts for their four-month-old daughter: a Roth IRA, a brokerage account, and a 529 plan.

Their current net worth, which includes their investments, cash, and real estate equity, is about $780,000, Brennan said. They're on track to hit $1 million by the end of 2022. "But we also realize it's a long game and if we don't do it this year, it's not the end of the world."

Becoming millionaires won't necessarily change their lives, he added. "Our money is tied up in long-term investments anyway — it's not liquid — so we're just continuing to set our goals each month, follow our regular budgeting process, and we'll continue to grow our wealth with time."

Setting specific money goals

Writing down clearly defined goals has been crucial throughout their journey, from paying down six-figures of debt to building a six-figure portfolio.

For example, when Brennan and Erin were paying down their debts one-by-one, they set a specific minimum dollar amount they had to put towards whatever debt they were focusing on at the time, say $2,000. They treated it like any other fixed cost, like insurance or internet. Then, they could work backwards and figure out exactly how long it would take to eliminate that debt assuming they contributed the $2,000 each month.

What tended to happen was they would find extra money to throw at the debt, pay more than the minimum they set each month, and hit the goal earlier.

Setting a minimum gave them flexibility within their budget for discretionary spending. "We were still living life," said Brennan. "If we wanted to get a massage one month, we didn't skip that stuff. But at the same time we were very set on our goals, so when we had extra money, it went to our debt."

Today, he prefers using a whiteboard to track their money goals. It includes their one-, five-, and 10-year goals, plus his daily schedule. "When I put something on there, it will get done."

There's no secret to what he and Erin have achieved. "I don't have some magic pill and I'm not a day trader trying to sell a get-rich-quick scheme," he emphasized. "It's consistency and intentionality. It's long-term wealth. Just go through the fundamental process and you will become wealthy."