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Episode: 283 - Crushing $185K in Debt on One Income

Introduction 

Have you ever heard stories of people paying off thousands in debt and thought, "Could I really do that?" For a long time, I felt like I would always be stuck in debt with no way out. But today, I’m excited to share how I paid off more than $185,000 in debt while living on a single income over the past six years. 

 

I’ve been on my debt-free journey since July 2018, and since then, I’ve paid off over $186,394 in student loans, car loans, medical bills, and credit card debt—all while on a single income. 

My Financial Beginnings 

It has been a challenging and rewarding journey, and I’m grateful Brad encouraged us to track our progress. Without that, I may have given up early on. When I first started, I was making about $13 an hour and barely scraping by. I maxed out credit cards to keep up appearances, showing a carefree life on social media while secretly dealing with panic attacks over my financial situation. 

Finding Help and Community 

The turning point came when I reached out to Brad, an old high school friend who was also on a debt-free journey. Instead of feeling judged, I found understanding, which made all the difference. I joined Roots, an accountability group filled with people facing similar struggles, and it became the safe space I needed to have open conversations, share ideas, and find solutions. 

Five Keys to My Success 

Here are the five key steps that helped me turn my financial situation around: 

Know Your Numbers: You can’t fix what you don’t see. I listed all my debts from smallest to largest and faced the total amount. I also started tracking my income and expenses to find areas where I could make changes. 

Put in the Work: Be ready to work hard, even if it’s not perfect. Changing spending habits took time, especially with my ADHD. But sticking to my budget, even when it wasn’t easy, was key. 

Get Support and Know You’re Not Alone: Finding Roots was crucial for me. It was the first time I felt like I could succeed. I had to let go of old habits and be open to new strategies. 

Take Risks and Have Faith: Sometimes you need to borrow belief from those around you until you find it in yourself. Whether it was applying for a new job or picking up side hustles, I took steps that felt risky but ultimately led to freedom. 

Show Yourself Grace: Mistakes happen. It’s important to acknowledge them, forgive yourself, and get back on track. 

Conclusion 

I hope my story can inspire and motivate you on your own journey to debt freedom. Remember, you’re not alone, and even though the path to financial independence is challenging, it’s completely achievable. Thank you for joining us today on the Debt-Free Dad podcast. Keep working toward your brighter, debt-free future! 

 

Resources Mentioned

Get better results with your finances in 30-60 days - GUARANTEED. Watch this video to learn how! - https://www.debtfreedad.com/payoff-debt-in-60-to-90-days 

Free Tools and Downloads at www.debtfreedad.com

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 Transcript: 

Kati Hatfield – Host
00:00
Do you listen to all the success stories on this podcast, where everyday people are paying off thousands of dollars in debt, and think, "There's no way I could do that"? I always thought I would keep drowning in debt, with no view of the shore in sight. Stay tuned to hear how I paid off over $185,000 in debt on a single income over the last six years.

Thank you for listening to the Debt-Free Dad podcast, where we help everyday people take control of their finances to live a happier, less stressful life. My name is Katie Hatfield, your host for today’s episode. I’ve been on my journey to debt freedom since July 2018, and in that time, I’ve saved and paid off over $186,394 in student loans, car loans, medical bills, and credit card debt—all on a single income.

It has definitely been a whirlwind, and I’m glad that Brad tells us to track our progress, or else I’d have probably given up after a few weeks. I still look at my numbers in disbelief every month and think, "Wow," especially because when I started this journey, I was making just about $13 an hour and barely able to pay my bills. I was consistently charging $500 to $800 a month on my almost maxed-out credit cards. Then, the AC in my 2002 SUV had just gone out—again. In July, in Florida.

I tried to buy a used car and got turned down by nine lenders. The dealership lied about my income just to push it through, but I had no savings or extra money to make a monthly car payment. I was convinced I’d soon be living in this new-to-me vehicle. My life on social media looked fun and carefree.

02:16
A few years prior, I had left a long-term relationship, moved across the country from Wisconsin to Florida, and was working at one of the happiest places on earth, enjoying the sun, sand, and palm trees. But I was living way beyond my means, spending money I didn’t have, and was stressed to the max. No one knew I was having massive panic attacks and losing sleep over how to make ends meet. Money is such a taboo topic, and I was ashamed and embarrassed that my dirty little secret would be found out.

I’ve known Brad since freshman year of high school, and I had been following his journey of getting out of debt. I was embarrassed about my situation but needed help, so I reached out to him. I was met with understanding, not ridicule—a pleasant surprise.

03:13
Joining Roots, the accountability group, was a huge turning point. It’s full of people in similar situations, willing to be transparent and share solutions and tips. This made a big difference for me. A lot of people go through debt with a partner, whether they’re on the same page or not, but most have two incomes. I didn’t have anyone else bringing income into my household or bouncing ideas around with me, so this group became a place where I could talk freely about my situation and get great ideas without feeling judged as a failure.

"Hashtag WWBD: What Would Brad Do" became my mantra, especially when I was shopping, which was a bit of a problem. Waiting 24 hours to avoid impulse buys, not wandering the aisles of Target daily, meal prepping and planning, and using cash at the grocery store were all huge wins for me. As I started to gain traction and celebrated these small wins, I was able to catch my breath. I began to believe that I could actually do this, and as my belief grew, so did my confidence.

04:38
I applied for a new job and got it. It started at $40,000 a year, with potential bonuses, and I committed to putting at least 80% of any bonuses toward my emergency fund and paying off debt. I also used the same strategy with tax returns, cash gifts—anything extra. Over the last four years, I’ve gotten several promotions and raises, and if I hadn’t been working on my mindsets and behaviors, those raises would have been wasted on useless stuff, putting me further into debt. Thankfully, with Roots, I had a solid plan to avoid going backward.

Along with my full-time job, I started a cooking business about three years ago to bring in extra income. So, you might wonder, what were the biggest changes I made? I’ve narrowed it down to five key points:

05:47
1. Know your numbers.
You need to list all your debts from the smallest balance to the largest. Total it up, and yes, it’s going to hurt. Ignorance is bliss, but it won’t help you improve. Now, write down your monthly income versus what you’re spending regularly. You probably won’t like the difference, but once you know where your money is going, you can start making changes and track your progress. You’ll be amazed over time.

06:32
2. Be willing to put in the effort.
Even if you can’t do it perfectly, you need to try. I didn’t get into hundreds of thousands of dollars in debt overnight, so you can’t expect to get out without rolling up your sleeves and making big changes. I have ADHD, and it’s hard to focus on things I don’t enjoy. I also like getting things perfect on the first try, but I’ve learned that progress matters more than perfection. In six years, I’ve never had a perfect budget, but I put in the work regardless.

07:48
3. Admit that you’re not alone.
While you may have gotten yourself into this mess, you're not alone in your struggle, and seeking help is a sign of strength. If you really knew what you were doing, wouldn’t you have already gotten out of debt? I tried several times to get out of debt on my own but kept falling back into bad habits. Joining Roots was the first time I felt like I could actually stick with the process and be successful.

08:38
4. Take a leap of faith.
We believe you can get your finances in order, and we’re cheering you on. Borrow our belief until you find your own. Apply for that job, pick up a side hustle, or take on a gig. Yes, it might take some extra time, but it doesn’t have to be forever. Think of it as short-term pain for long-term gain.

09:22
5. Give yourself grace.
The concepts for getting out of debt are simple, but they’re not easy to execute. This is some of the hardest work I’ve done. I’ve never had a perfect month where I stuck to my budget 100%. We all make mistakes and slip back into old habits. The key is recognizing when you’re off track, stopping in your tracks, and correcting your course.

I hope this has helped you think about how you can work on your own journey to debt freedom. Until next time, thanks for joining us here on the Debt-Free Dad podcast!

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