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
- The Totally Awesome Debt Freedom Planner
- For more help, and a step-by-step process to get started, enroll in Brad's FREE online course, LIFE WITHOUT PAYMENTS.
Free Tools and Downloads at www.debtfreedad.com
Connect With Brad
- Website - https://www.debtfreedad.com
- Facebook - https://www.facebook.com/thedebtfreedad
- Private Facebook Group - https://www.facebook.com/groups/lifewithoutpayments
- Instagram - https://www.instagram.com/debtfreedad/
- TikTok - https://www.tiktok.com/@debt_free_dad
- YouTube - https://www.youtube.com/@bradnelson-debtfreedad2751/featured
Thanks For Listening
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Transcript:
Kati Hatfield:
Do you listen to all the success stories on this podcast, where everyday people are paying off thousands of dollars in debt? But you think there's no way I could do that. I always thought I would just keep drowning in debt with no view of the shore in sight. Stay tuned to hear how I have now 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, and I've been on my journey to debt freedom since July of 2018. And in that time I have saved and paid off over $186,394 in student loans, car loans, medical bills and credit card debt, all on a single income. 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 complete disbelief every month and go 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 pretty much always maxed out credit cards. And 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 flat out lied about my income to push it through finally. 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.
Kati Hatfield:
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, while enjoying the sun, sand and palm trees. But I was living well beyond my means, spending money I did not have and stressed to the max. No one knew that I was starting to have massive panic attacks and losing sleep over how to make ends meet. Money is one of those taboo topics and I was just ashamed and embarrassed that my dirty little secret would be found out Now. I've actually known Brad since freshman year of high school and I'd been following his journey of getting out of debt. I was embarrassed of my own situation, but I needed help and reached out to him. I was met with understanding and not ridicule. That was a pleasant surprise.
Kati Hatfield:
Then joining Roots, the accountability group is full of people in similar situations, willing to be transparent and honest and discuss solutions and tips to shift my sales, which made a huge difference. See, a lot of people were going through debt with a partner, whether they're on the same page or not, but they also typically have two incomes. I didn't have anyone else to bounce ideas around and definitely no one else bringing income into my household, so this group was a place where I could talk freely about my situation and get so many great ideas on changing my behaviors and mindset without feeling like I was being judged as a failure. Hashtag WWBD what would Brad do became my mantra, especially when I was shopping, which was a little bit of a problem. Waiting 24 hours to avoid those impulse buys, not wandering the aisles of Target daily, starting to meal prep and meal plan and using cash at the grocery store these were all huge wins. As I started to get some traction and celebrated these small wins, it was refreshing. I could catch my breath, I started to believe that I could actually do this and, as my belief grew. My confidence grew.
Kati Hatfield:
I applied for a new job and I got it. It started at $40,000 a year with some possible bonuses, and I committed at least 80% of any bonuses I earned would be going towards making sure my emergency fund was in good shape and paying off debt. I also used the same strategy with tax returns, cash I got as gifts, anything extra. I have gotten several promotions over the last four years and raises to go along with them, and if I had not been working on improving my mindsets and behaviors, those raises would have just been squandered on useless crap and I'd have just fallen into more debt. Thankfully, with Roots, I had a good plan in place to not fall backwards. Along with my full-time job, I started a cooking business about three years ago that helps bring in extra income. So you might be wondering what were the biggest changes I made, and I've tried to narrow it down to these five main points.
Kati Hatfield:
One know your numbers. You need to make a list of all your debts, from smallest balance to largest. Total it up. And yes, it is going to hurt. And yes, it is going to hurt. Ignorance is bliss, but it's not going to help you improve your life. Now write down your monthly income versus what you're spending on a regular basis. You're probably not going to love the difference between those numbers, but when you know where your money is going, you can see where you can make some changes and track your progress. You'll be amazed over time. It's easier to stick with the process if you see actual progress with those numbers.
Kati Hatfield:
Number two be willing to put in the effort, even if you can't do it all 100% perfectly. I wish I could tell you this all just worked itself out in my brain overnight and it was super easy to see huge results. But I didn't get into hundreds of thousands of dollars in debt overnight and you can't expect to undo it without rolling up your sleeves and making some major changes. I also struggle with ADHD and find it extremely hard to focus on something I don't truly enjoy. Plus, I usually only want to do it if I can get it perfect in the first or second try. Month after month, I still consider my budgets to be crappy, but I have learned to let it go and at least put in the effort, even if it's not 100% that first try. In six years I have never had a perfect budget If you're not willing to put in some work. You can't be upset or blame someone else or make excuses that this just doesn't work. You actually have to do something.
Kati Hatfield:
Number three you have to be willing to admit that, while you may have gotten yourself into this mess, you're definitely not alone in your struggle, and it's a sign of strength to seek help. You might like to think, oh, I know what I'm doing. But if that was really true, wouldn't you have already gotten out of debt on your own by now? I have actually tried several times to get out of debt and just kept falling back into my old habits and spending behaviors. Joining Roots was the first time I've truly felt that I could be successful and stick to the process, but I had to put some of my former beliefs and thought processes aside and be willing to listen to some other options in order for it to take hold in my brain, and I actually kind of enjoy it now.
Kati Hatfield:
Number four you have to be willing to take a leap of faith. We believe you can get your finances in order and we're cheering you on. Borrow some of our belief until you start to believe in yourself too. Maybe you want to apply for that new job or pick up a side hustle or some gig work. Yes, it might take some extra time commitments to still be working on paying off your debt, but it also doesn't have to be forever. Think of it as short-term pain, long-term gain. You're just making these temporary sacrifices to get you towards your overall goal. And number five give yourself grace.
Kati Hatfield:
The concepts to get out of debt are actually pretty simple, but it's not the easiest to implement. In fact, I would probably say this is some of the hardest work I've ever done in my life. But, as I said before, I've never gone through one month of finances and thought, wow, I stuck to my budget 100% this month or, woohoo, I did not screw up. We all make mistakes. We slip back into those old habits or spending patterns. But once you learn the basics and recognize when you've gone off track, it's a little easier to acknowledge where you screwed up, stop in your tracks and then correct your future course of action. I hope this has helped you in just thinking about some of the ways that you can work on your journey to debt freedom. And until next time, thanks for joining us here on the Debt-Free Dad.
