She Strengthens

Breaking Free from Debt: My Journey to Financial Freedom

I should have been on top of the world when I graduated from college with an accounting degree. Instead, I was consumed by the weight of $30,000 in student loans. The thought of carrying that burden for years to come was daunting. But I knew I had a choice: accept debt as a normal part of life or take control of my finances. I chose the latter.

The Sacrifices Were Worth It

Throughout college, I had worked as a nail tech to make ends meet. After graduation, I landed a staff accountant job, but I continued working at the salon to put every penny towards my debt. It wasn’t easy – I sacrificed time with family and friends, and worked 70 to 80 hours a week. But 10 months later, I had paid off all $30,000.

The Biggest Mistakes People Make When Paying Off Debt

As I shared my success with friends and family, they began asking for help creating their own debt repayment plans. Through my experience, I’ve learned that there are common mistakes people make when trying to pay off debt.

Waiting for More Money

Don’t wait until you earn more to start paying off debt. Income isn’t always linear, and even if your income increases, your spending habits might too. Focus on setting aside a portion of your current income for debt repayment.

Lack of Intensity

If becoming debt-free isn’t your top priority, you won’t see results. Be willing to make sacrifices and take drastic measures to reach your goal.

No Strategic Plan

Create a plan to tackle your debt. Write down every debt, balance, and interest rate, and prioritize them from highest to lowest. Focus on one debt at a time, and automate your monthly payments.

Not Applying Extra Payments Correctly

When making extra payments, specify that you want the extra cash to be applied to the principal, not interest. Use a sample letter from the Consumer Financial Protection Bureau as inspiration.

Paying Off Debt Before Creating an Emergency Fund

Before paying off debt, create a “Oh no!” fund of about $1,000 to cover unexpected expenses. This will prevent you from racking up more debt when emergencies arise.

Treating 0% Financing as Not Being in Debt

Don’t be fooled by 0% financing – it’s still debt. Treat it as such, and make timely payments to avoid back-charged interest rates.

Paying Off Debt Only to Get Back into Debt

Break the cycle of debt by changing your mindset. Don’t pay off debt just to finance another purchase. Focus on achieving financial freedom and peace of mind.