How Budgeting with Friends Helped This Single Mom Pay Off $14,000 in Debt

Candace Collins and her daughter.
Courtesy Candace Collins

Candace Collins, 35, says relying on friends to point out her bad spending habits has helped rid her of $14,000 in credit card and student loan debt over the last five years.

Collins currently owes $62,000 in student loans that have interest rates of between 4.6% and 6.8%.

In 2014, when she was deepest in the red, Collins owed $76,000. That total included both her student loans, as well as credit card debt of $3,000 across three retail credit cards with interest rates of nearly 26%. Some of her credit card accounts went into collection, which damaged Collins' credit score.

The debt spiral: Student loans plus spending sprees

Collins, who lives in Austin, Texas, began spiraling into debt when she started college in 2002. Her student loan debt grew quickly, as she took out loans to cover not just tuition, but also books, supplies, and some living expenses. It took Collins six years instead of four to graduate from Toccoa Falls College with a bachelor's degree in communications, so the amount she borrowed crept even higher than expected.

In her third year of college, Collins says she was advised to get a credit card to build up her credit score, which seemed like a smart financial decision at the time: "You go to a store and they tell you you're going to save 10% on the spot if you open up a credit card account, so why wouldn't I?"

After graduating, Collins scored a position as a management trainee at a retailer called The Buckle. In just 10 months, she was promoted to store manager and was earning $50,000 annually. Her newfound success, she explains, led to more spending: "When I got my first taste of earning, I lived for myself and I blew it."

When I got my first taste of earning, I lived for myself and I blew it.
Candace Collins
Austin, Texas

When she became a mother in 2014, Collins realized her spending and borrowing habits were out of control: It "forced me to go 'Holy crap, I gotta get it together,'" she tells Grow.

Now Collins says she is paying for what she spent.

The anti-debt strategy: Enlisting financially savvy friends

The new mom started on a mission to achieve financial freedom. Collins says that, in the months following the birth of her daughter, she twice tried creating a budget and sticking to it—but failed both times: "I would waver off the plan because it got too hard and I didn't hold myself accountable."

It wasn't until her third attempt, when she enlisted the help of friends, that she started chipping away at what she owed.

Collins moved out of retail and started a job as a ministry coordinator for young adults at Hill Country Bible Church, where she was mentored by Donna McNally, whose husband DeWayne was an executive pastor. Collins eventually formed a close friendship with both McNallys. Their connection came with some perks: Donna and DeWayne both studied finance, and DeWayne currently runs the church's finance team. They felt confident in their own money management skills and were eager to share their knowledge.

The McNallys created a plan for Collins and used a spreadsheet that broke down her spending into categories. They gave her a budget to follow for each one. She began recording her purchases to ensure she was sticking to the plan and so she could visualize where her money was going.

Candace Collins' wallet after budgeting.
Courtesy Candace Collins

They also wanted to help Collins start recognizing unnecessary purchases, so they had her show them all of her receipts. "My palms would sweat when I would send them receipts for things I knew were out of the budget," Collins remembers.

"They would ask me questions and try to help me keep my eyes on the prize. One time, DeWayne said, 'You paid $130 to have your house cleaned, do you think that's something you could have done yourself?' That helped me start thinking through my purchases."

Based on the feedback Collins received, she began to realize where she was overspending. Dining out a lot and spending on purchases like handbags were some of her weak spots. Most of her shopping sprees, Collins realized, were a result of her efforts to "keep up with the Joneses."

I knew growing up that we didn't have a lot and I wanted to shake up the financial habits in my family tree. I want to make sure, when she's on her own, she's not living paycheck to paycheck like me.
Candace Collins
Austin, Texas

Spending within her means is still something Collins struggles with, but her budget helps keep her in line.

Collins just made her final consumer credit card payment, eliminating her $3,000 retail debt. All in all, she has eliminated $14,000 worth of credit card debt and student loans over the last five years.

And when Collins has money leftover at the end of the month, she'll contribute more than just the minimum balance due to pay off her student loans, too, ASAP.

The debt-free celebration: Magic at Disney

When Collins has wiped out the remaining $62,000 she owes, she plans to treat her daughter to a trip to Disney.

"She's the main reason I started this financial journey," Collins explains. "I knew growing up that we didn't have a lot, and I wanted to shake up the financial habits in my family tree. I want to make sure when she's on her own, she's not living paycheck to paycheck like me."

Candace Collins and her daughter.
Courtesy Candace Collins

The opportunity: Peace of mind & paying it forward

For now, Collins is content with having peace of mind. For instance, she's on a cellphone family plan with her best friend's family. Her friend, Beth Wilson, makes the monthly payments online. Before deducting Collins' portion, Wilson used to have to check if there was enough money in Collins' account.

Now, Collins says she keeps a $100 buffer in her account so that she doesn't run into overdrafts: "That is the financial freedom I'm striving for."

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