After getting myself into close to $10,000 of credit card debt in 2013/2014 when I renovated my first home, I at first stuck my head in the sand and vowed to the readers of my blog I was going to pay it off in 2015. I had put off repayment for a while (almost a year) and wanted to be targeted and aggressive, so I set the challenge of paying off the debt in 90 days to both challenge myself, and because I wanted it gone for good.
I tracked my progress: Day 30, Day 60, and Day 90.) And by the time it was over I was debt free. Three Months. No small feat. It's the most aggressive goal I've ever set for myself, and one of the few that I've actually kept and completely smashed. Here's how I tackled my own aggressive debt pay off plan and paid down over $8,000 in 90 days.
I Brainstormed New Ways to Approach My Goal
I knew I needed to do something drastic -- but making significant sacrifices for an entire year felt like a real drag (spoiler alert: paying off debt is ALWAYS a drag, which is why you should avoid getting into it in the first place.) Twelve months also seemed so, so, so incredibly far away. A whole YEAR before I could jump up and down about being debt free? Puh-lease.
I have a very short attention span. I'm also the type of person that likes to get the painful bits over with right away. At the beginning of January I went through a really bad break up, and through that felt inspired to bare down and focus on something...anything...else.
Could I pay all my debt off in a month? No, it just wasn't realistic.
What about six months? I could, but that still seemed like a lifetime.
What if I got really serious and paid it all off in three months? With my birthday being in March it seemed like a great thing to gift myself, and once I ran the numbers...it was possible. Not probable. But possible.
*I have to mention here that yes, I know for some, paying off debt uber aggressively isn't sustainable, which is why I encourage others to do what is best for them.
There are many out there struggling with tens of thousands in consumer debt, or student loans. I get it. Still, what if by being aggressive you could retire a significant chunk of your balance, no matter how much you owe? That could make a huge difference, and save you tons of money on interest. That's all I'm sayin'.
How I Arrived at My Number
With my target date in sight I then began to work backwards.
$8100 divided by 3 (for # of months) = $2700 in debt payments each month.
That still seemed like a good amount, so I moved $1,000 that I could spare from my emergency fund (read here why I believe it is important to build an emergency fund before paying off debt) to jump start my debt repayment.) That money left me with $1000 in the bank by the way, but with the balances accruing interest, I felt my emergency cushion was better spent retiring debt.
This brought my total each month to roughly $2400, which is still high, but do-able. $1200 every two weeks, or an extra $600 a week.
I then took a good, hard look at my expenses and started slashing left and right. Doing a spending freeze and only giving myself $100 each month in "play" money meant I could allocate $800 from my full-time, bi-weekly paycheck to my debt repayment each month after my expenses and automatic savings withdrawals.
So after all that, I needed to "find" an additional $1600 each month. Here is where it gets interesting.
Earning More vs. Saving More
I've always been a huge proponent of the idea that penny pinching is an absurd waste of time. Sure, saving money is good sense, but spending hours and hours of your precious time to bargain hunt and only slightly lower your bottom line? Ri-dic-u-lous. As a freelance writer, I make more hourly than I could ever save by bargain hunting.
I was already saving as much as I could from my full-time paycheck, so I turned to my side hustle as a freelance writer and marketing gun-for-hire to ramp up extra income. I hassled a few clients I hadn't heard from in months. I got on Upwork and found a handful of new (and surprisingly well-paying) clients. I thought about new streams of revenue for my business, and so I started offering blog coaching for beginner bloggers and businesses.
But leveraging your side hustle isn't the only way to make extra money.
I sold some of my old stuff on Ebay. I started offering "sponsored content" to brands (something I usually don't do -- but hey, it is working out), and I even did a little voiceover work for a video my friend was making for her business. I also opened up two new checking accounts just so I could get $300 in bonuses, which went straight to credit repayment. Basically I sat down, wrote a list of all the (legitimate) ways I could make extra money, and I did them.
Anything I could do to bring in extra dollars, I did. Some of it wasn't always top of mind, but having a big brainstorming session at the beginning of January before I started paying back the debt helped me get creative.
Tips to "Ease the Pain"
I employed the use of vision boards to help visualize being debt free. I also built in "rewards" for myself each time I was able to contribute my bi-weekly debt payments. These steps may seem insignificant, but I've tried to accomplish goals without them before, and this time it was much easier with these helpful reminders along the way.
Even though it would have accelerated my debt payoff, I still made regular contributions to my savings (pay yourself FIRST people!) to my emergency fund on top of my aggressive debt payments. For those who were wondering, this is how I was able to fund an emergency cushion and leave my job around the same time I finished with my debt repayment. Without massive debt minimums to pay, I finally found the financial freedom I needed to start working for myself and being my own boss.
Get competitive with yourself. I'm a money nerd, but it was almost fun to look at my checking account balance on February 15, see I needed 2-300 more dollars to hit my weekly $600 goal and start hustling my pants off to make it happen.
The Benefits of My Debt Payoff Journey
The mainstream benefits of paying off debt are numerous: my credit score went up, I have more money and freedom in my monthly budget, and it is four (yes, FOUR!) less monthly payments to worry about.
But personally, my debt journey has opened up a lot of new avenues.
I ramped up so many new clients that I was able to leave my full-time job and start working for myself.
I was also holding onto a lot of financial and emotional baggage from the purchase of the home, the fallout with my contractor that ended up costing me so much, and the dissolution of my engagement in the Fall of 2013. It's a small shift, but with the debt gone I no longer have to think about that dark time in my life on a daily basis and can finally put it behind me once and for all.
My mother always used to say, "you can do anything for 30 days," which is true. Which means with enough grit and determination you can definitely do anything for 90. Even though I only had to sacrifice my high-falutin' lifestyle for 90 days, it still taught me new things about what I can live without.
And perhaps best of all -- I became incredibly financially empowered after my 90-day challenge. Some may think that since I already write a personal finance blog that preaches financial empowerment I was already money minded, but being able to retire debt so quickly reminds me that I can be focused and motivated and accomplish great things when I'm not distracted, when I prepare, and when I push myself. This is a great thing to remember as I begin working for myself where the money isn't always reliable and I have to rely on myself to make things happen.
But seriously, go do something you think can't be done, whether it has to do with money, fitness, relationships.... whatever. Sure it may seem tough at the beginning, but do it anyway. The future you in 90 days will thank us both.