5 money bloggers reveal their debt conquering stories
By Dawn Papandrea
August 21, 2015
Got debt? Many Americans do, and a lot of it. According to Federal Reserve statistics and government data, as of July 2015, the average credit card debt among indebted households was $15,863, and average student loan debt was $33,090.
“I grew up not thinking twice about taking out loans, living paycheck to paycheck and living above your means,” admits Chonce Maddox, founder of MyDebtEpiphany.com. “I took out loans each semester in college to pay for tuition and various other expenses, and rewarded myself with a new car when I graduated. I definitely could have made better choices.” When her moment of clarity hit, she realized she didn't want to work tirelessly just to keep up with her spending, so she made some big changes.
In order to break your own debt cycle, get inspired by Chonce and her fellow money bloggers who've collectively conquered over $200,000 in debt and counting…
Debt load: Credit cards, student loans and a car loan, totaling $56,000
Payoff progress: Debt-free
How she did it: I used the debt snowball method, paying minimum payments on all accounts, but focused on paying extra on the smallest debt. By knocking out the smallest debt first, I was able to get some quick wins and a sense of accomplishment that I could actually pay off all the debt.
Blog inspiration: I started Every Single Dollar with the idea I could be that resource and teacher to other single women. I found there were very few resources targeting that audience.
Strategies to live by: All of my bills are on auto-pay, but I pay for all my groceries, entertainment and clothing out of cash. The rest of the money is earmarked for savings and is transferred to my savings account. This cash method forces me to stay on budget because once the money is gone, I'm done spending for the month. I learned to be content living on less.
John Schneider & David Auten
Debt load: $51,000 in combined credit card debt
Payoff progress: Debt-free
How they did it: Most people think they bring home more money than they really do. We encourage you to get the picture of how much you really earn. Once you know this, create a budget where you spend less than you earn. Automate your bill payments, including credit card payments, so there's minimal thinking and opportunities to cheat yourself.
Blog inspiration: While climbing out of debt, we found that many of our peers, friends and others were in the same situation. We want to help people avoid or get out of debt, and thus the reason we've written our books and have our website, videos and — coming soon — webinars.
Strategies to live by:
1. We never let the money we want to save go into our spending account. Set up a direct deposit to a separate bank, mutual fund company or brokerage firm that has no payment features, such as checks, debit cards, etc.
2. With credit cards, if we can't pay it off every month, then we don't use it. And learn to work the rewards — don't let them work you. The rewards don't always outweigh the costs, so make sure you have a strategy. We have used them to go to Australia, New Zealand, England, Spain, Mexico, San Francisco, San Diego, Philadelphia and North Dakota.
Debt: $30,000 in total debt from student loans and a car loan
Payoff progress: Maddox plans to be debt-free by May 2016.
How she did it: You'll need to make a few sacrifices and there's no real way around that. Make a list of the expenses/items you refuse to give up, and what you can give up in order to pay off your debt. Immediately start cutting the expenses that you are willing to sacrifice.
Blog inspiration: In a journalism class, our final project was to create a blog. The professor sent us links to some of the most popular blogs, and Get Rich Slowly was on that list. I instantly became hooked after reading all the personal stories and began soaking up all the financial advice I could. I adopted a whole new mindset and realized I could have a better, freer life by becoming debt free.
Strategies to live by:
1. Create a vision board or simply jot your goal down on a sheet of paper and place it somewhere prominent in your house so you will see it each day.
2. Surround yourself with people who will support and encourage you.
3. If you don't have an emergency fund already, save up at least one month's worth of expenses then use the rest of your money to plow through your debt.
4. And always wait 24 – 48 hours before making a purchase that is not budgeted for. You should also ask yourself if you can buy something used instead of new for cheaper.
Debt load: $81,000 for my undergraduate and graduate degree
Payoff progress: About halfway there; goal is to be debt free by May 2016
How she's doing it: Paying off debt is so much more than “spend less, earn more.” It's all about mindset and focusing on the positive. Also, giving myself a strict $100 budget for fun each month is working. I plan on significantly reducing my restaurant and happy hour expenditures.
Blog inspiration: I realized there was a lack of discussion around the emotional aspects of debt in the personal finance community. Debt can be very isolating and shameful. I wanted to create a space where people in debt could share their stories. I came up with the idea for “Dear Debt” letters to provide some catharsis for people. It's a way to dump debt and start to take back your life.
Strategies to live by: As she says in her blog, you have to really evaluate your priorities. “I know money is a tool to help you get what you want out of life. I want freedom and travel and adventure,” she writes. “I know I can have all of those things, while still setting myself up for a nice future, if I get out of debt ASAP.”
Debt load: $65,000 in student loans
Payoff progress: Debt-free. Eliminated $40,000 in a little over two years and has paid off the rest.
How she's doing it: I started with self-assessment and taking inventory about my financial triggers. When you know what money means to you, you can begin to assess whether or not your relationship with it is healthy or not. On a more practical note, track your spending for 21 days to really see how you spend and with that data, decide if you should adjust your financial behaviors.
Blog inspiration: Talking about money is not done much in the African-American community. I wanted to change that. There are more women serving as financial and emotional caregivers in their families; I wanted to provide tips and tools to support them.
Strategies to live by: I have what I like to call “The Financial Freedom Fund (FFF)” or “Save for a Sunny Day” fund, which is a cookie jar or a bucket that you dump your loose change into on a daily or weekly basis. That money allows me to indulge and splurge without debt. The cost of my splurge will be limited to how much money is in the fund.