How I Dug Myself Out of 25K of Debt in 17 months Working a Minimum Wage Job
I was in my mid-30s and thought I was “all good”. I had a full-time job (salary plus commission), I was making ends meet (barely), I had my car paid off and I was making my credit card payments on time every month! Sure, I had student loans and credit card debt looming over my head, but that was “normal,” right? Based on what I have learned on my journey to becoming debt-free, what is touted as being “normal” may not be the best…not for me, nor for anyone for that matter.
I never really understood what the saying “Come to Jesus” meant until I was highly pressured by my mother. She sat me down and lovingly forced me to see that everything was NOT “all good”. In a tear-filled confession, I admitted to my mom that the level of debt I had made me feel shameful and embarrassed. You’ve heard the old adage, “The first step to healing is admitting there is a problem.” I had the mindset of, “Sure, I have some debt but that’s NORMAL. Everyone has debt, right?” But after she basically coerced it out of me, I admitted to my mother that I had a problem. From that moment, my life would be forever changed.
Until I was forced to look at my financial situation for what it really was, I would never be the person I wanted to be — and I would never experience the success I so longed to have. Thus began my journey to financial freedom. I call this part of my life “Financial Rehab”. I was an addict of material consumption and personal gratification. I also wasn’t capable of discerning between a want and a need. “Can I afford this?” wasn’t even in my vocabulary!
Once I realized that I was on the road to nowhere, i.e. the road to B-R-O-K-E and being in debt FOREVER, I took up the offer from my parents to move across the country to live with them and FINALLY get my financial life in order! This is where my story truly begins. Stay tuned for Part 2 Financial Rehab.
The Journey to Financial Rehab Begins
After my “forced confession” to my mother, the changes really started! Over the next six weeks, I resigned from my old job, accepted a new job completely across the country, and packed up a lifetime of belongings into my 2011 Honda CRV. On a balmy January afternoon, I tossed one last box of essentials into the car, tucked my beloved 12-year-old dog, Mika, into the co-pilot seat, and started the 1,750-mile journey to a new life of financial health and wellness. Some anxiety but mostly excitement filled our hearts that day as we left the frozen comforts of snowy Minnesota to what would be our new home in sunny Arizona. When we left that day, I had no idea of the magnitude that one little choice would have on my life.
The three-day road trip was long and tedious, but we managed to make it to our new home in southern Arizona without any major detours or snafus — PRAISE THE LORD! As we pulled into my parents’ driveway, I knew I had started a journey that would forever change my life.
I had just three days to get settled in before I began my new job as a Spa Assistant at a luxury resort just a pond’s distance away from the Arizona/Mexico border. It was this job, which was low-pay, low-status, definitely NOT my dream job and definitely NOT as glamorous as one might think job that allowed me to become debt-free in just 17 months.
This article is the second installment in a series of seven. Stay tuned to find out how I learned to live on a shoestring budget and pay off 25K in debt in just 17 months.
Life Rehab in Motion — How I Lived on a Shoestring Budget
After I settled into my new life as a 30-something, single dog mom living with her parents, the reality of my situation began to sink in. Was I really doing this? Was I really living with my parents and giving up the beautiful, hard-earned freedom that I thought I once had (Insert freaked-out-face emoticon)? Am I really going to have weekly meetings with my parents to go over my budget and literally have to run every single penny by them before I spent it? Why, YES, that is EXACTLY what I was doing! It was this very honest, painful and humbling process that got me to where I am today; debt-free and actually saving and investing for retirement!
My new life was simple: going to work, helping my parents, learning how to manage my money wisely and stay on a budget. What is a budget, you ask? According to Merriam-Webster, a budget is defined as a plan for the coordination of resources and expenditures. I prefer to define it as a written plan of how resources will be allocated within a certain income level in order to both successfully pay for current expenditures and to save for future needs. Besides, when this plan is followed correctly, it will be the single best way to achieve ANY financial goal. Think of it as a step by step, CLEARLY DEFINED road map to financial success.
Budgeting was a HUGE factor that helped me become debt-free but it is only ONE factor. In upcoming articles, I will discuss other key factors that helped me on the journey to becoming debt-free.
This is part three of seven that outlines exactly how I paid off $25K in debt in less than a year and a half and as a single woman who was working a minimum wage job.
It’s Not Easy to Become Debt Free But the Steps to Get There Are Simple
In my last article, I discussed how a budget was the true game-changer in my path to becoming debt-free. Having a written budget allows you to tell your money where to go instead of looking at your bank account at the end of the month, scratching your head and wondering where all your money went!
You might think it’s completely impossible to do something like I did. Moving back to your parents’ house in your mid-30s is a pretty extreme change, I admit. However, I think it’s fair to say that embarking on a journey to become debt-free is going to require some SERIOUS sacrifice and change on many levels. Think about it, in ANY journey to a significant goal many changes will need to take place. Take weight loss, for example. Not only will you have to change your overall mindset, but changes around food, exercise, meal planning, etc. will all need to happen in order to reach a weight loss goal. It is the same thing in becoming debt-free.
Before writing this article, I reflected on what sacrifices I made that helped me to become debt-free. It’s weird because looking back on all of it, I don’t consider them “sacrifices”. I mean, yes, on a certain level, I definitely made sacrifices in order to achieve the goal of becoming debt-free, but I look at it as more that I made CHOICES, one at a time, that helped me to get closer to my goal.
Stay tuned for part five of this seven-part series as I describe the sacrifices and choices I made that helped me to pay off 25K in debt in just 17 months.
Becoming Debt Free Requires More Than a Good Budget
What does it take to become debt-free? In my experience, there are three key factors that need to happen in order to become debt-free and they are probably not what you think.
Sacrifice
This one may be obvious. It only makes sense that in order to become debt-free, some things would need to be given up; nights out with friends, that cute purse — dress — jacket you just can’t live without, that wine tour with the girls (insert tear emoji here) — sure those are obvious examples of items that need to be given up. In general, we need to stop buying things that we don’t need and going on trips that we can’t afford!
It sounds simple but it is much more difficult in the moment when we are standing in front of the aforementioned item and our hearts’ desires and emotions are screaming at us saying “You work hard. You deserve this.” Maybe it’s “But if I buy this shirt — dress — pants — whatever item I’ll have to do laundry less, therefore I’ll save myself time AND money by running the washer less — I’m a genius!” Or maybe it’s “It’s Friday, I’ve had a L-O-N-G ass week. I deserve to go out for dinner. I’m just too tired to cook. If I can’t treat myself once in a while, what good is all this money I’m making?” Does this sound familiar to anyone? Sacrifice and giving up on impulse buying and self-serving justifications is one of the keys to help you get out debt.
Change in Mindset
This, for me, was the hardest one of all! Until I was really focused on paying off my debt, I didn’t really think about the ramifications of my spending decisions. I wanted what I wanted and gosh darn it, I was going to have it! Who cares if I didn’t actually have money to pay for it? That’s what credit cards are for! Credit cards are the epitome of adulthood and the gateway to freedom, right?! WRONG! I was so wrong!
Those excuses mentioned above, if you haven’t guessed, were MY justifications to spend money that I didn’t have to fill a void of boredom and insignificance. I really needed to become more mindful when it came to how I spent my hard-earned money.
The best way for me to change my mindset around money was to ask myself this question: Is this a want or a need?
In the sixth part of this series, I will discuss wants versus needs and how knowing the difference between the two will help you to get out (and stay out) of debt.
Wants versus Needs — How Discerning Between the Two Will Help You to Become (and Remain) Debt Free
Knowing the difference between a want and a need is the third key to becoming and staying debt-free. Let’s discuss the difference between a want versus a need.
Needs are items that you have to have. They are things that you literally cannot go a long period of time without having. More specifically, it would be very difficult to survive if these basic human needs are not met.
In my opinion, the basic human needs for living are shelter, food, clothing, water, transportation, insurance and utilities. In this day and age, I would even consider a cell phone a basic human need. These items are essential for you to live and work.
Wants are items that help you to live a more comfortable life, things that you buy for fun or leisure. These items bring joy or enrich your life in some way. For example, you could not live without food and water for a significant amount of time whereas you could easily live without having the latest and greatest tech gadget. Other examples of wants are travel, entertainment, designer clothing, gym memberships and coffeehouse drinks. Of course, this list is not exhaustive of ALL wants as those will differ from person to person.
Another way to put it is that wants are things that enhance your life but you could get away without having them. Wants are things that can be cut out of your life and you would still be able to survive!
Knowing the difference between a want and need is one of the key factors that will help you get out of (and stay out of) debt. I challenge you to examine your own wants and needs and how your assumptions about them have led you to the financial situation you are currently in. Once you’ve evaluated your wants and needs, what changes can you make in order to improve your financial situation or begin your journey to becoming debt-free?
In my seventh and final installment of this series, I will discuss two final keys that will help us stay out of debt for the long run.
I’m Debt Free, Now What?
Now that we know that becoming debt-free will require sacrifice, a change in mindset and knowing the difference between a want and a need, what are the final keys to becoming (and staying) debt-free for the long run?
Accountability and a support system.
I know that there is NO WAY I would have been able to dig myself out of 25K of debt all by myself if I had no accountability or support system. It was BEYOND difficult to let my parents know how dire my financial situation really was. In addition, it was THE most humbling experience as a 30-something woman to meet with them each week to go over my budget and have them tell me what to do with my money. Even though I knew in my heart that it was the best thing for me, I will admit that some of those meetings were heartbreaking and tear-filled. Even though it was my mom who ultimately shed light on my true financial situation, my parents were the biggest accountability and support system of this entire process. I literally could not have done this without their tough love and unwavering support.
Aside from the lessons in budgeting and behavior change, I have learned that money management is a mindset and it’s very emotional. The first step is awareness. It takes time to recognize and change our behaviors in order to make the changes that we want to see. (In fact, this is true in all aspects of life, not just money management.) I was lucky enough to have a mom who loved me enough to encourage me to tell her the truth about my financial situation. If she hadn’t opened the door to the conversation and pushed me to tell her what was really going on, I don’t know where I’d be financially right now. I am confident that I wouldn’t be debt-free and saving at the level I currently am. Thank you, Mom!
That being said, if you are in a place where you are wanting and are truly ready to pay off your debt, the first thing you need to do is start a budget and find an accountability partner and support system. Depending on your situation, it may be the same person!
I know it may seem daunting and hopeless, but with commitment, intention and a little faith, you CAN become debt-free. If I can do it as a single person working a minimum wage job, I KNOW you can do it, too!
Now that I have shared my journey, I’d like to help others become debt free and reach their financial goals. I’d love to hear feedback as to the best way I can help others. Would a book, website, or online coaching program be helpful? Are there other ways I can help you? If you would like to partner with me, please leave a comment below and tell me how I can be of help to you. Let’s get together and knock out the debt once and for all!
