At 21 years old, Lauren from Financial Best Life accrued $10,000 in debt. She suffered from a shopping addiction and spent nearly $200 a week on clothes.
She says, “if you add the numbers up… that’s close to $800 a month on clothes, or $9,600 a year.” She sought out professional help, kept her addiction at bay and paid off the debt in 2011 — a monumental effort that I could write a whole profile on.
But I’m fast-forwarding to 2013. Lauren bought her first home in a small community southwest of Atlanta. It needed renovating and her real estate agent recommended a contractor she knew from church. Sounds safe, right?
The home needed $58,000 in renovations. “As a foreclosure, the home had sat vacant for almost a year and all of the copper in the home was gone,” recalls Lauren. “It also needed a complete re-do of the plumbing, HVAC, and electrical systems to bring the home up to code.”
The contractor seemed like a pleasant man or as Lauren says, “He seemed super nice at the time and like he really went out of the way to ‘hold my hand’ through what started out as an exciting project and time in my life.”
He actually practiced shady business techniques. Almost every job he took on failed inspection and went over his initial price. This pulled Lauren back down the debt pit.
“I funded the renovation with a 203k loan, but went over and had to raid my savings account to finish the project. Having no savings cushion then led me to lean on my credit cards for ’emergencies’ in the Fall of 2013 and by New Year’s Eve 2014, I was 8,432.16 in debt.”
But this time it wasn’t her fault.
The “spending freeze”
By 2015, Lauren prepared herself for a full-on debt repayment assault. She swore she’d pay off the debt in only three months. You read that correctly: $8,000 in three months.
It required careful planning. She took $1,000 from her savings and figured out that she must pay $600 a week on the debt. And the plan would only work if she conducted a “spending freeze.”
She initiated the spending freeze and allocated only $25 a week for “fun” money. “I had to get creative,” says Lauren. “I said no a lot, invited people over more and I did my spending diet in the winter. It’s a great time because people don’t want to go out because of the weather and after the holidays many people are in the same ‘I don’t want to spend money’ boat.”
She didn’t buy anything except groceries or gas. I especially like this little anecdote from her freeze days: “I remember running out of shampoo half way through and using travel sizes I’d gotten from hotel stays.” Paying off her debt remained priority number one.
Besides the strict freeze, Lauren also increased her income using side hustles. She “hassled a few clients” she didn’t work with in months, found new freelance writing jobs and thought about new streams of revenue for her business.
“Paying off debt quickly is possible, but only if you find additional ways to earn an income,” says Lauren. “I started offering blog coaching for beginner bloggers and businesses. My coaching methodology is now offered as a course.”
Great advice. And Lauren overcame all her debt troubles and carefully planned out her financial successes without a background in personal finances. Impressive.
After going through Lauren’s amazing stories, I asked her for some personal finance advice. She says:
- When paying off debt, rewarding yourself is so critical. I recommend that once you pay off a card — spend no more than 5 percent of the balance you just paid off on a little “treat.”
- Side hustles are the only way I could make $8,000 in 90 days happen. There are so many ways to make an extra $100-200 a month in your free time. Find your side hustle magic.
Check out Lauren’s blog and defeat your debt.
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