In March 2015, I had so much debt I felt like I couldn’t breathe.
I had spent the previous two years building my Etsy business into a physical store, working as a freelance writer and jetting off every other month to visit my fiancé. I finished my Master’s degree after four years of night classes.
From the outside, my life looked great. I was in charge of my career and my education. I was in love. I was a strong, relatively independent woman.
And then it all fell apart.
How I Got $50,000 in Debt
Honesty time: This wasn’t my first debt rodeo.
In 2011, I paid off about $8,000 in credit-card debt, the remnants of a divorce and a few years of car repairs and insurance I couldn’t afford. Selling the car helped, but keeping up a consistent side hustle got me out of the hole.
This time was different.
I took out loans for graduate school while still paying off undergrad.
During a brief panic, I’d rented an apartment that cost $400 above my budget.
I used my modest savings to expand my online vintage resale business to a physical store. I shared the small space and employed help for only a few hours each week. But poor foot traffic and unexpected utility costs seemed to doom the venture from the start.
In December 2014, I sobbed as I pulled together cash from my nearly-empty personal accounts so I could run payroll for my one employee. I had to shut it all down.
It was the ugliest of ugly cries.
A few months passed before I had the strength to tally it up. I had $19,324 in personal debt, $5,146 in business debt, and my student loans added up to $27,209.
The grand, humiliating total: $51,679.
My last round with debt wore me down, but this time it broke me.
I hated my debt so much I wrote the amount in Sharpie on a yellow square of paper and stuck it on the bookshelf next to my bed. “$51,679” was the last thing I saw before I went to sleep and the first thing I saw when I woke up.
But being aware of your debt doesn’t make it go away — it just makes you feel awful about your entire life.
I felt like I couldn’t go out with friends or buy a cup of coffee. I felt like I couldn’t admit to anyone how much financial trouble I was in.
The weight of my debt pressed down on me so hard, sometimes I couldn’t even get out of bed.
I knew I couldn’t get out of debt by wallowing in it. But turning sorrow into action is harder than it sounds.
How I Paid Off $30,435 in 18 Months
Stop buying lattes! Make your lunch!
I was hungry for advice, but felt like I’d heard it all before. Here’s what really helped me pay off more than half my debt in 18 months.
1. I mentally separated my student loans from my consumer debt.
Student loans are the pits, but I knew from the get-go they’d be a long haul.
My interest rates were steady at 6.8%, so I made my student loans a low priority. I’d focus on my credit cards and personal loans, and worry about student debt later.
Of course, I still made the minimum payment on my student loans. Doing so paid off my undergraduate loan balance — $2,364 — during the course of my 18-month debt diet.
2. I did the math (over and over and over).
As I made plans to close my business, I scrambled to figure out how I’d make enough income to cover my expenses and minimum debt payments each month.
I started applying for full-time jobs and made calculations based on my target salary.
If I could get a job that paid between $50,000 and $60,000 per year — likely, based on my experience and location — and I kept my expenses down, there was a strong possibility I could pay down my personal and business debt in about two years.
It was a great plan, but I didn’t get any of the jobs I interviewed for.
I couldn’t wait for a job offer to start making progress toward my financial goals. I would have to get creative with the math and find a way to make full-time freelancing work for me.
3. I hustled my butt off.
I wasn’t a new freelance writer, but I stepped my game way up in 2015.
I started pitching articles to new outlets to boost my portfolio, regardless of whether they paid well.
I worked at a local letterpress shop two days each week, packaging stationery while listening to podcasts about how to grow my freelance income. When I worked at my own shop on the weekends as I counted down the days until the end of my lease, I focused on moving as much merchandise as possible.
I wasn’t shy, either. I told my friends and colleagues I was looking for work, but left out the factoid that my debt gave me panic attacks.
A shop neighbor asked for help re-organizing her online storefront and offered to pay by the hour. I did a couple of odd jobs for people in exchange for cash.
No job was too small.
And then the work snowballed. I took a long-term freelance gig editing blog posts, and reconnected with another previous client who needed a ghostwriter.
A nonprofit I’d worked for part time years ago called to ask if I could step in as a temporary assistant.
“Sure, if I can start in three weeks,” I said.
“No, we need you to start tomorrow,” was the response.
I took the job and spent the next few months juggling two 20-hour per week positions, my shop, my stationery gig and other freelance assignments.
I thought I might die of exhaustion. But as the money flowed in, my panic slowly receded.
I could get out of this.
4. I talked to a credit counselor.
I’ve read Dave Ramsey, I’ve read Suze Orman, and heck, I write for The Penny Hoarder. But I wasn’t sure if I was doing all I could to reduce my debt.
I set up a free phone consultation with a nonprofit credit counseling service near me.
My counselor asked me about my financial situation and the amounts and interest rates for my banking, credit and loan accounts. She also pulled my credit score and asked about my estimated tax payments as a freelancer.
The bad news: there wasn’t much I could do to reduce my debt or make it easier to manage through my counselor’s organization. My interest rates were already low, and I was making at least the minimum payments.
We talked about strategies to build up my emergency savings, but for the time being, I just had to keep pressing on.
The good news, though, was that this meeting gave me a confidence boost.
My counselor was kind and assured me that although my debt felt insurmountable, I was still making strides toward a healthy financial future.
5. I played the balance-transfer game.
I’ve missed payments on only a handful of bills in my lifetime.
But the one time I forgot to pay my airline-points credit card, my interest rate shot up from 13% to 25%. The card also had my highest balance, which meant my minimum payment shot up, too.
I routinely received balance-transfer offers by mail, so I took advantage of them by moving the balance from a high-interest-rate card to a card offering several interest-free months on that balance.
The longer the interest-free period, the better.
Paying down a huge amount of debt seems much more manageable when you’re paying down the principal instead of an outrageous interest rate.
With some savvy balance-transfer moves, I paid off $17,800 in credit card and personal loan debt interest free.
Transferring a credit-card balance incurs a fee, but the additional one-time 3% charge on my bill was easier to battle than than an ever-growing balance.
I also learned a big lesson about tracking billing due dates and payments.
After my interest-rate flub, I set up a simple Google spreadsheet called “Big Scary Debt List.” I opened it almost every day to track due dates, record payments, and run endless calculations to maximize my efforts.
6. I compromised.
I hate living underground. Basements are dark, and I’m a sun worshipper.
I’m also stubborn, but my sudden circumstances convinced me to compromise.
In October 2015, shortly after we moved from super-expensive Washington, D.C. to Baltimore, my fiancé broke up with me. Cue the sad trombone, because I was a wreck. (Again. You thought 2016 was bad? Please. My 2015 was the pits.)
I was lucky I had emotional support from friends and family, and emergency savings in the bank. This definitely qualified as an emergency.
After a few weekends of searching, I signed a lease back in D.C, where costs were high — but my network was strong. As I mentally prepared to turn 30, I moved into a basement bedroom in a house with two roommates I didn’t know.
But I couldn’t beat the price: $955 plus utilities in my favorite neighborhood, where studio apartments typically start at $1,300. Compromising on housing saved an “extra” $400 a month to put toward my debt.
7. I celebrated my wins.
Just because I made a concerted effort to pay down my debt doesn’t mean I didn’t have any fun.
Once I started making progress to reduce my balances, my outlook improved. I was single for the first time since college. I was ready to let loose a bit.
I watched my wallet, but I didn’t completely lock down my spending. I let myself go to baseball games, attend concerts, pay for a gym membership and have a glass of wine (or two) at happy hour.
I actually traveled a ton in 2016, flying several times for work projects and even more to visit family and friends. I even spent a week in Iceland. After paying off about $11,000 of debt in 2015, I felt justified in spending about $1,000 on an international vacation.
(Note: I took that vacation before I ended up with a $10,000 tax bill. Sigh.)
8. I hustled some more.
People still ask, “How many jobs do you have now?” (Spring 2017 answer: two!)
At my busiest, I had six regular freelance or contract gigs. I negotiated a rate increase with my “breadwinner” client and rarely turned down an extra assignment.
Don’t think I sat in front of the computer all day. I spent a week dog-and-house sitting to make an extra $450. I helped my friends run their craft show booths for $100 per day.
Working so much wasn’t always pretty. I even started spending money so I’d have more time to focus on work and earn income to put toward my debt.
I spent many nights at my co-working space until the lights switched off at 11 p.m. — then I went home and worked at the kitchen table. I got groceries delivered at 7 a.m. I took Uber to client meetings to save time, instead of riding the bus.
When I went to happy hour with friends, I set a phone alarm to remind myself to go home to do more work.
Even as a full-timer at The Penny Hoarder, I still work with one of my favorite freelance clients. Those extra few hours spent working each week make a significant contribution to my ongoing financial security.
9. I made many, many payments.
There’s usually no penalty for paying your credit card bill more than once each month. Rather than waiting for the due date to roll around and hoping I’d have the money, I made payments about once each week toward each of my accounts.
Every time I got paid, I sat down and used my spreadsheet to decide where I wanted to put any “extra” money. If I knew a zero-interest promotional period on a credit card was near its end, I put as much as possible toward its balance.
Those modest achievements every week helped motivate me even more.
10. I made goals for the future.
I didn’t spend every penny on my debt, which is why I’m letting my student loans hang out with me for a few more years.
Instead, as my debt dwindled, I put more and more of my income toward my savings and retirement accounts so I’d have a safety net for the future.
As of January 2017, I have $20,000 of student loan debt.
My loan provider estimates my final payment will occur in October of 2023, but I’m working on a plan to beat that date by a few years.
Beyond that, I don’t owe anything to anyone.
I even made a huge purchase — a car to get around my new home in Florida, where I moved after taking a full-time job at The Penny Hoarder.
It’s like I’ve been here before, but I’m doing it smarter this time.
Your Turn: Have you battled credit card debt? What are your favorite strategies?
Lisa Rowan is a writer and producer at The Penny Hoarder. She’s been down here before, and she knows the way out.