As a personal finance blogger, I share the juiciest details of my money mistakes with the Internet.
I’m known for being an industrious side hustler and burgeoning real estate investor, but the truth is, I have also struggled with recurring credit card debt. I got into a lot of credit card debt in college, but eventually was able to pay it all off over the course of 18 months, thanks to my first full-time job.
I took the slow and steady approach then, because that kind of income was new to me, as was building a budget and sticking to it while living on my own for the first time in New York City.
I was so proud to be debt-free after years of bad habits (including a shopping addiction I had to go to therapy for), and I remained debt-free with my credit cards safely in my freezer until I bought my first home in 2013.
Back in Debt Again
When it came to my first home purchase, I’d seemingly done everything right: I bought a home well within my price range, earmarked a windfall for the down payment, leveraged city and state down payment assistance programs to cover the closing costs and incidentals that come along with a first home purchase.
I bought a foreclosed home, which, after renovations, left me with a chunk of equity in the house. However, the renovations went over budget, and by January 2014 I was $9,000 in credit card debt.
Now, $9,000 isn’t an overwhelming amount of money compared to the debt some people carry, but for me, with my car paid off and no student loan debt, it felt big.
Still, I turned back to my trusty “slow and steady” method. I thought, “I’ve done this before, I should have no trouble doing it again!”
But it was different this time. I had a mortgage and needed to grow my emergency fund. I struggled to pay off my renovation debt for the entire 12 months of 2014, but ended the year $8,100 in debt.
The “Get Aggressive” Debt Challenge
As I began 2015 still in debt, I finally decided to get serious. But I also knew if I wanted to get rid of the debt once and for all, I’d need to get creative and try something new.
At first, I thought about paying off the debt in six months, but this seemed like forever to me.
Instead, I ran the numbers to figure out if I could pay off $8,100 in three months. It wasn’t likely, but with a lot of hard work and penny pinching, it was possible.
I kickstarted my progress by putting $1,000 from my emergency fund toward the balances, which meant I’d need to pay $2,400 each month to wipe out my debt by my self-imposed deadline.
Then I began to look at all of my monthly expenses. I couldn’t save much from my “fixed” costs like my mortgage and utilities, but if I did a “Spending Freeze” where I didn’t spend any money outside of groceries and gas, I could allocate $800 from my full-time paycheck — roughly half of it — to my debt repayment.
But I’d still need to come up with another $1,600 a month to meet my goal.
I sold items on eBay, babysat and did some paid voice-over work for a friend who needed talent for her business video. Basically, anything I could do to bring in a little extra cash, I did.
I didn’t buy anything aside from what was necessary. No shampoo if I ran out (I had to use the little hotel-size bottles I found in the back of my cupboard), no eating out (although in months two and three I gave myself $25 a week for “play money”), and no drinks out or fun events.
For three months, I had to hunker down. It actually wasn’t that noticeable, since my challenge went from January to March, the coldest months of the year, and I was working so much.
Why the Aggressive Approach Worked Best for Me
It all depends on your personality, but as someone who has never been able to stick to any type of restriction-based diet for very long, my idea to be aggressive with debt repayment seemed just crazy enough to work.
Paying off debt requires a lot of dedication and focus, and while it was tough to be so regimented for three months, I prefer that over torturing myself slowly and making small cuts over months and years of debt repayment.
By shortening the timeline, I was also able to focus on my goal to ensure success and save a lot of money in interest. This strategy helped me save about $100 per month in interest charges, or about $1,100 in 2015.
After all, you can do anything for three months, and now the debt is gone and I have my life back.
It’s been about four months since I finished the challenge, and I’ve since been able to use the debt freedom to begin working for myself full time. I built in rewards along the way, but my “big treat” to myself for paying off the debt was buying a few things for my house.
Could the Aggressive Approach Work for You?
Before taking on your own aggressive debt challenge, look at your habits in other areas of your life.
Do you prefer to be extreme for a short amount of time? Are you the type of person who likes to “just get it over with?”
If so, this strategy may work for you. Think about what you want to pay off, choose a timeline and monthly amount you can work with, and then brainstorm a payoff strategy around your schedule and lifestyle.
My aggressive debt challenge worked so well, I’m thinking about doing another 90-day challenge, maybe around getting to 20% equity in my home, or hitting a specific savings target. Either way, it feels nice to finally have my life back from credit card debt.
Your Turn: Have you ever tried an aggressive debt-repayment timeline like this? How did it go?
Lauren Bowling is the blogger behind L Bee and the Money Tree, where she shares the wisdom of her past money mistakes. Bowling’s expertise has been featured on Forbes.com, Business Insider, The Huffington Post, U.S. News and World Report, and Lifehacker (among others). She is also the host of the award-winning internet talk show, Awkward Money Chat. Find her on Twitter and Instagram — @lbeemoneytree.