3 Families, 4 Months, $26,000 Paid

Unchecked spending and the overuse of credit are what landed these three military families in trouble.

The first step in their plan was to give up their credit cards. To participate in this challenge, all three couples were required either to cut up or store their cards. When you are in debt, you cannot continue to add to your problems by using credit.

Cutting off their credit supply forced the families to budget better.

"Not a lot of people can say that they are a cash-only family," Tarek Bathiche said, adding: "At the same time, it has been hard to discipline ourselves and our spending habits."

George and Kim Colón have found that paying off their debts with the lowest balance first has motivated them to stick to their payoff plan. With this strategy, you ignore the interest rates. You list your debts in order, starting with the lowest balance. You take all the extra money you can find by cutting your expenses or from a second job, or both, and then apply it to that debt, making just the minimum payments on the other debts. When you pay off the first debt, move on to the debt with the next-lowest balance and so on.

Their original strategy of paying off the highest-interest debt first does make sense mathematically. But people in debt often get discouraged and abandon their payoff plan when the list of debts remains the same for too long.

"We didn't see progress," Kim said. "Now we're just knocking them off."

By attacking the lowest-balance debt first, the Colóns and the other couples were able to cross off entire bills in a matter of months. That in turn motivated them to cut back their expenses even further and find more cash to throw at their debts.

"It was like we had a dark cloud over our heads," George said. "We see light now."

It's that same dark feeling of overwhelming debt that has forced Amber and Trenton Holmes to stick to their plan.

Unfortunately, they had some needed and expensive home repairs, which slowed them down a bit. However, the biggest impediment to their plan is their mortgage on a second home.

Like many people in recent years, the Holmeses decided to trade up to a bigger home. They thought they would have no problem either renting or selling their first home. They were wrong.