The #debtfreecommunity on Instagram is rapidly growing and so many millennials are becoming debt free. If you’ve been following me for a while, you know I’m on a journey to becoming debt free. Through this community, I’ve sesrched for, found, and still searching for single black moms who are either debt free or working towards becoming debt free. Our guest on the blog is one of these moms who has recently become debt free, and here is our interview.
1. First, tell me a little bit about who you are, where you’re from, what you do, number of kids, all that you would like to share.
I’m in my mid-thirties, mother to a pre-teen girl and reside in California. I work at a major tv network assisting with developing entertaining and educational tv concepts and programming. I’m currently at the low end of totem pole but rapidly working my way up the ladder!
2. How did you accrue your debt? (Credit cards, student loans, personal loans, car loans, etc.)
My debt came from the usual suspects. Credit card, car payment and student loans. When I began my journey in 2014 the breakdown looked like this;
• Credit Card- $4,000
• Car Loan- $26, 315
• Student Loan- $27,465
I decided to follow the snowball method and tackle the smallest debt first.
3. What was your final straw to make you start tackling your debt, and what kept you motivated on the journey?
I was making decent money, for me, at the time. About 50k a year, yet I didn’t have anything to show for it. Yes, I had nice clothes, nails and hair done, and I was just learning about building wealth. I was contributing 10% to my 401k and additional funds to my HSA. The lightbulb hit when I started reading getting interested in purchasing real estate, specifically a multi-family unit. After tons of reading and research I learned that purchasing something of that caliber as a single woman and mother with no substantial savings and a ton of debt would be extremely risky, that it was a risk I was not willing to take. So, I decided to become debt free, build my emergency fund and then save for my property. I want my purchase to be a blessing and not a curse.
4. What are some things that you stopped doing or deprived yourself of on the journey?
EVERYTHING! One thing that stands out the most was the decision to stay in my one-bedroom apartment. Once things financially started to pick up, I wanted to move into a bigger place so my daughter could have her own bedroom and we can live more comfortably. To keep my debt payoff momentum going I decided to stay. Housing is one of your biggest expenses so keeping that at a bare minimum is what allowed me to progress during my journey. Now that I’m debt free I have no desire to move, and I’m able to tackle my other financial goals rapidly as consequence to that. To be completely transparent most of the deprivation came from simply not having any money. Over the course of my 4-year debt payoff journey I was laid off 3 times. I went from making 50k a year to 30k to 15k a year. Thankfully I was diligent with paying off my debts (credit card and car at that time) that I only needed to pay for basic living expenses which included rent, internet, cell phone, tuition and food. When my income finally did increase it was easy to forgo birthday parties, events, concerts, spa days, hair appointments, restaurants, shoes, and weekend getaways. I saw how easy it was to go broke and I was determined more than ever to finish off my student loans and save.
5. What are some things you did to assist in paying off your debts?
I worked and sacrificed. I didn’t side hustle because that was time and energy that prevented me from performing exceptionally well at my place of employment and would prevent elevation. I did work overtime whenever I was able. I would dabble in focus groups but that wasn’t very lucrative. I made a budget, cooked at home, started an Instagram account to share my journey with like-minded individuals since I had no one in real life I could relate to. I also started my account to document my journey so that when things are at a halt or I get discouraged I could look back and see the ground I’ve covered and muster up the motivation to continue.
6. Did you have a support system and how did people around you react when you said you were starting this journey? Did anyone understand?
My boyfriend at the time was a huge support to me. Mainly because he was getting out of debt as well. My friends were supportive by being offended when I turned down invites. Some even offered to find free to stuff to do and at times would treat me. My mother respected what I was doing and was amazed at the numbers I was throwing towards debt each month. When I explained to people why I was putting myself through such drastic measures it made sense and people understood. However, it’s very difficult to put into action. Lastly, my baby girl was my support system. She understood why she couldn’t do certain activities, why we couldn’t get hot lunch anymore or why we ate the same foods over and over. She would remind me that we had peanut butter and jelly sandwiches at the house when I wanted to stop and get food on the way home.
7. Are there people in your inner circle who you have inspired to do the same?
I inspired mother to be more aggressive with paying off her credit cards. She’s not gazelle intense but she’s moving. She’s also been thinking about paying her house off in 7 years instead of 15 so she can be debt free when she retires. Other than my mom, I’ve helped a few friends complete a budget to at least see where their money is going and how they can cut back and save.
8. What was your feeling when you pressed the submit button on that final payment?
Words can’t describe the feeling. There were times when I wanted to give up and stop, especially after the layoffs. I had to take on jobs that paid practically nothing and rely on government support to get by, which I’m so grateful the option was there. Once the day finally came, that I would be making my final debt payment, an unexpected tear came down my face ( I know it sounds a bit melodramatic) but it came from a sense of relief and actual peace. I didn’t expect to be emotional. It’s probably one of my greatest accomplishments, and for my daughter to not only see but experience the ups and downs and then witness the end was just amazing.
9. Now that you’re debt free, what are your money goals? Will you still budget? Will you invest? Save?
I still budget and track my expenses. Now that I’ve gotten a raise so to speak, it’s even more important to assign each penny a job. I’m finally able to put into action what motivated me to get out of debt. I’m currently on month 3 of my 6-month emergency fund. I’m contributing 6% of my income into my Roth 401K, and in April I will save for 2 months to pay for a Disney Cruise that my daughter and I will be taking in September (Our 1st out of state vacation together). Once my emergency fund is complete, I will up my retirement contributions to 15% and will begin saving for my investment property, which I hope to buy in 2021.
10. Thinking into the future, how will you help your child(ren) when it comes to managing money and not taking on debt?
I’m placing a big emphasis on school and education right now, so that she can obtain scholarships to attend college. Whenever she gets money some goes to savings, giving and she can spend. I also have her plan out her month with events and activities she wants to attend, and she’ll budget and spend money according to what she has left in her spending pouch. I’m proud to say this experience has taught her a ton about not only budgeting but the dangers of debt and the rewards of building wealth.
11. What are some last encouraging words that you have for other single moms out there who are embarking on this journey to living a stress-free, debt-free life?
JUST DO IT! It’s so fulfilling and worth it. Although my daughters father financially supports her there are many times when I wished that I didn’t NEED his support. Now, that I’m debt free, so much money has been freed up to continue offering her a great quality of life.