For this week’s debt success story, we welcome LaTisha Styles, a motivational speaker, blogger and spokesperson specializing in simple finance for millennials. I know her story will encourage and motivate you.
Tell us a bit about yourself:
I am a 30-something millennial blogger that is passionate about success for others and myself as well. I grew up in a lower income middle class family and I always knew that I could achieve more. I was the first person in my immediate family to graduate college and quickly learned that a degree does not guarantee success. After a year of working full-time in retail and the food service industry, I decided to go back to school. I graduated again, this time with a finance degree and began my journey to financial success. These days I write about my experiences and strive to help others at my blog, Young Finances.
How did you acquire $32,000 in debt? What did that debt consist of?
My first dollar of debt came in the form of a student loan. I borrowed to finance college but I wanted to live a good life. I opened my first credit card at the age of 18 and I began shopping and using the credit card to pay for everything I always wanted to have. For me, every impulsive ‘want’ was instantly a ‘need’ with my handy credit card. By the time I decided to pay off all of my debt, I had about $22,000 of credit card debt and about $10,000 left on a car loan.
What did it feel like to have that much debt?
Being in debt was depressing. I saw friends buying their first homes, or paying cash for cars and I felt like I was being held back from the life I really wanted. I knew that in order to reach my ultimate financial goals I would have to make immediate sacrifices now so I could enjoy abundance later.
How long did it take you to pay it all off?
It took me three years and one month to pay off the car loan and all of the credit card debt. I combined a lean budget with extra income from my side hustle and worked to pay everything off. I also partnered with a reputable consumer credit counseling agency that created a three-year plan for me to stick to. They also contacted my creditors and they were able to get interest rate and fee concessions as well.
What resources did you use to help you through this process?
I created a financial plan and relied on my budgeting spreadsheet to keep track of my income. I knew that if I had extra money coming in I could use it to pay more of my debt. I titled my budget “3 Year Budget”. I knew that after the three years ended I would be able to create a less restrictive budget. That kept me motivated.
Did you face any challenges along the way?
The hardest part of it all was redefining how I spend money. I had to teach myself to live within my means. I used an all cash budget to do this. That also meant that I missed out on some events with friends because I had to stick to my budget.
What were you doing for a living while you were paying off the debt?
I began paying off my debt after I got my first full time job with a financial advisor. I worked back office and then spent my evenings and weekends working on Young Finances which began to build a steady income. It was nice to use that money for fun or put it towards extra debt payments.
How did it feel once you paid it all off?
When I made that final payment I have to admit that it felt a little weird. I had a ‘now what?’ moment. After paying such a large portion of my income towards debt for so long, it was odd to rearrange my budget to exclude that expense. I still have a way to go before I am completely debt free because I have student loans to take care of. That is my next goal and my new focus.
What practical tips do you have for people looking to pay off their debt?
Be honest. Be honest with yourself and understand that it is going to take time. Pull together all of your debt and then think about how you want your financial picture to look once the debt is gone. For me, I wanted freedom. I wanted to be able to walk away from a job I disliked, freedom to find a passion, and freedom to travel. Freedom. That is what motivated me. Find your motivation and keep it in mind. Reward yourself at milestones. Keep track of your progress. It all adds up.
What steps are you taking now to stay out of debt or to build wealth?
These days I have two credit cards, one for business and one for personal expenses. Both offer cash back rewards and I pay them off in full each month. It’s nice to get paid for borrowing money instead of the other way around. I still maintain my impulse shopping rules and I keep an eye on my accounts everyday. I like to see my financial picture so I can make changes before it’s too late. My next goal is to continue building my business and passive income from investments. It’s a slow process but much quicker without the drag of expensive credit card debt.
To learn more about LaTisha and her journey toward financial independence, you can visit her at her blog, Young Finances.
Refinance Your Student Loans or Credit Card Debt
With the average credit card interest rate around 15%, this could save you a ton of money over the long haul. SoFi will refinance your credit card debt to as low as 5.99% so that you can pay your debt off even faster. Use this link to get $100 cash back if you get approved. They also refinance student loans to as low as 2.355% APR.