Growing up, I often heard my family say things like, "You'll always owe someone," and "Student loans are good debt," which made debt seem like an inevitability. My journey into the red started when I was an 18-year-old, first-generation college freshman taking on student loans to pay for tuition and housing at a private, out-of-state university.
Over the years, I took on way more debt than I could afford — that, paired with poor basic money management skills, meant I ended up stressed, depressed, and even at risk of losing my job a few times. For a long time, I thought I would always be in debt.
By the time I finally had enough, it was 2018. I was in over my head to the tune of about $189,000. I had $4,000 left on my car loan, $50,000 in credit card debt, and roughly $134,000 in student loan debt.
I was heading in the right direction and had paid off nearly $16,000 in 2019, when I got hit with a $21,000 tax bill for outstanding tax returns. It was a setback that left me full of self-doubt. I considered quitting my debt payoff journey again. But this time, I didn't.
Since 2019, I've paid off $70,000, including my car, my outstanding tax debt, and most of my credit card debt. Here are steps I took to help me feel more confident about my money and finally get on the path to becoming debt-free.
It is easy to feel overwhelmed by debt. I certainly was. But I knew that I wouldn't be able to move forward without having a clear sense of how much I owed. In 2018, taking the time to list out all of my debts was one of the hardest things I've ever had to do. It was sobering to see the total amount, but it was also liberating to get all of that mess out of my head.
Understanding exactly how much I owed and who I owed it to, and finally seeing this information in front of me, made deciding on my debt-repayment strategy and putting that plan in place a little easier.
There are two common debt repayment strategies. The snowball method involves tackling your debt starting with your smallest balance, while the avalanche method involves tackling your debt starting with your highest interest rate debt.
Knowing how I had struggled in the past, I wanted to start seeing progress in the very beginning, so I started my journey using the snowball method. Paying off six figures of debt is going to take some time, so paying off small debts to help build up the momentum for the long haul made sense to me.
In February of 2020, I switched to the avalanche method to tackle some of my credit card debt. By shifting my repayment strategy to pay off this card, I was able to lower the principal balance faster and therefore pay less in overall interest.
Both snowball and avalanche are effective strategies to paying off debt. You can't go wrong. My best advice is to choose the strategy that best meets your needs wherever you are on your financial journey.
Video by David Fang
Debt payoff and budgeting often go hand in hand. I tried doing one without the other in the past, but I didn't get very far. But what's more important than simply being on a budget is being on a realistic budget that works for you. To me, a realistic budget not only aligns with your financial goals, but it also takes into account your income, needs, and wants.
When I first tried living on a budget, it was too strict and all that did was lead to overspending. I would end up transferring money out of my savings to cover my purchases, which made me feel bad and like I wasn't good with money.
With that first, well-intentioned but too-strict budget, I felt deprived, and that was part of the reason why it didn't work. There was no room for fun activities like baseball games, random trips to Starbucks, or happy hour with friends. While I knew this journey would require sacrifice, I felt like I was only working to pay my bills, and I was losing motivation fast.
Video by Tala Hadavi
About three months in, I added a "fun money" category to my budget and found that it made sticking to my budget and debt payoff plan easier. I don't spend as much on fun as I used to, but knowing that I have money allocated to do whatever I want with it made me more intentional about how I spent that money, and it minimized the likelihood of overspending or going deeper in debt.
With that in mind, I was able to create a plan that helped me feel more in control of my money and made it easier to direct it where it needed to go.
I started side hustling in 2017, and my gigs have included being an Instacart shopper, working the front desk at an indoor cycle studio, taking surveys, product testing, and selling my unwanted items online.
I saw a huge difference in how quickly I could pay down my debt with additional income that I could dedicate solely to making extra debt payments. There are so many side hustle options out there, you just have to find one that works for your lifestyle and interests.
Video by Mariam Abdallah
Remember that it is also OK to put side hustles and projects on the back-burner when they are no longer serving you. After working 8 to 9 hours at my full-time job and then going to the cycle studio to log an additional six hours almost five days a week over the course of six months, I was burned out.
I decided to leave that gig at the end of February 2020 and focus on side hustles that I could do from home. Nearly a year later, I'm still confident about that decision.
When I feel overwhelmed, I take the time to write down everything that is going on. Seeing the situation on paper always helps me focus, like when I got that unexpected tax bill in 2019. It took me some time to process but revisiting my debt plan and seeing everything laid out helped me reconfigure the order in which I would pay off my debts.
I put my trust in myself and in my plan and kept moving forward. One of the key ways I do this is by celebrating my wins. I started using color coded charts to track my debt payoff progress early on, and I keep them in a binder. When I'm feeling discouraged or need a quick boost, I open that binder and remind myself of how far I have come.
Video by Courtney Stith
No matter where you are with your money goals, it is always a good idea to periodically step back and reassess as your circumstances change. I took a break from making extra debt payments for a month last year after paying off my credit card in November. I only paid the minimum payments on my remaining debt.
The money that I would have used towards extra debt payments I put towards other savings goals like adding more to my emergency fund and beefing up a couple of sinking funds. This pause gave me an opportunity to breathe, look back at what I had accomplished that year, and gave me a taste of what debt freedom would feel like. All of this gave me the momentum to continue slaying debt in 2021.
Ultimately, my best advice is to take care of yourself, hold space for your feelings, and make time for the things you enjoy. That is what will make a financial journey sustainable in the long run.
Nika Booth is a money coach, speaker, personal finance content creator, and founder of Debt Free Gonnabe. She's on a journey to slay her six-figure debt and created Debt Free Gonnabe to document and share her journey and teach others how to manage their money and pay off debt. She has nearly 40,000 supportive friends on Instagram and won the 2021 Plutus Award for Best Debt Freedom Content. Nika's work, including her hilarious yet relatable Instagram Reels and TikToks, have been featured on Vox, Real Simple, Mic, xoNecole, and more.
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