I Paid Off $40,000 Of Debt In 18 Months: Here’s How

Finance

There's been a lot going on in the world over the past year. From group chats to social media to the constant news cycle, there's a million issues being discussed on a daily basis. It's overwhelming. In particular, there are so many issues being discussed within the Black community; yet, we're not talking enough about our finances. We should be.


Last month, I celebrated a major milestone. I paid off $40,000 in 18 months. There were so many sacrifices I made within those 18 months to achieve this goal. I made being debt-free a priority. Our biggest tool to building wealth is our income. When your income is being divided and sent to multiple banks, companies, etc. with debt payments, you're preventing yourself from building wealth. In fact, studies show that most self-made millionaires (not Kylie Jenner), the real ones, live a debt-free lifestyle.

We live in a system of oppression that has hindered us from accumulating generational wealth. Everyone wants to "get money;" yet, so many of us are living paycheck to paycheck. While, there are many factors that impact our finances, there are certainly habits and mindsets that we've embraced that do us a disservice.

I knew when I graduated from Spelman in 2013 that I wanted to save money and build generational wealth. My parents grew up poor in the South Bronx and worked really hard to make sure my circumstances were different, but I knew that I was different from many of those women at Spelman. My family wasn't upper-class, and it was clear in the conversations of how people spent their summers, where they travelled, college funds, etc. I was well-aware of the sacrifices my family made to send me to Spelman and I wanted to use my education and network to achieve financial freedom.

At 27 years old, I am proud to say that I have achieved that financial freedom. I am debt-free!! I paid off $40,000 in 18 months following Dave Ramsey's Seven Baby Steps, which I strongly recommend. The baby steps are free to access. No excuses. Here's the key things I learned while following Ramsey's plan:

Income Is Key

Getty Images

When I first graduated college, I was working for a large PR agency and was largely underpaid. I chose not to defer my student loans. I was living paycheck to paycheck and struggling with a $500 lease payment for a brand-new Mercedes-Benz. I transferred from Atlanta to Los Angeles and received a raise. However, I was still underpaid. I was struggling to make minimum payments and using credit cards for everything. The debt started rising. Here's a rough estimate of my debt breakdown at that time:

  1. $35,000 (Mercedes Benz Lease)
  2. $10,000 (Credit Cards)
  3. $15,000 (Student Loans)

I knew that income was the issue. I simply did not make enough money for the lifestyle that I lived. I was driving a $35,000 car making $45,000 a year. AND I didn't even own the car. I needed to increase my income and get rid of the car ASAP.

Luckily, the lease was up for the vehicle. I turned it in and purchased a USED Honda Accord for $19,000. Vehicles are NOT an investment. They depreciate in value. It does not make sense to drive an expensive car unless you can afford it. Leasing vehicles are irresponsible, especially when in debt and end up costing way more than the vehicle. The total costs of your vehicle/s should not be more than half your income.

Next, I needed to find a new job and increase my additional income. I knew that going to work for a company/brand would pay more than an agency. I was recruited by a major beverage brand and negotiated a $20,000 raise off that transition alone. I busted my behind the first six months, proved my value and received another raise. THIS started my debt-free journey. I began the journey 18 months ago making $80,000 with the following debt breakdown of $40,000:

  1. $19,000 (Honda Accord)
  2. $11,000 (Student Loans)
  3. $10,000 (Credit Cards)

Income is KEY to paying off your debt. At some point, we have to take accountability for the many loans, credit cards, etc. we sign up for. Education is an investment, and you should have a return on your investment. Taking out $100,000 in student loans does not make sense when your trajectory for your career is only going to deliver at max $60,000 in the first five years. We must make smarter decisions when it comes to taking out student loans.

I see the jokes about student loans being with you forever. I do not accept that.

For every monthly student payment I made, that could've been going into an investment account. I refused to be 40 years old, paying off student loan debt.

In addition to the raise that I received, I stepped my side hustle up or as I like to call it, my second career. I am passionate about both. In addition to serving as a consultant/analyst, I am an entertainment journalist and correspondent.

I started booking more hosting gigs, brand ambassador gigs and increased my writing opportunities. I increased my additional income significantly. I even went as far as to work mall shifts at a local mall near my day job. I worked 9am – 5pm, then headed to the mall for part-time shifts from 6pm-11pm, and then I would write articles and host red carpets on the weekends. ALL of that extra income went to my debt payments. I was EXHAUSTED, but I had my eyes on the prize. I knew that it was a short-term sacrifice that would pay off.

Pay Your Debt FIRST

You can ease your way into debt, but you can't ease your way out of it. While beginning my aggressive debt-free plan I treated those major payments (as much as $2,000 a month) as a "necessity." Rent, Food, Utilities, Transportation, Debt Payment. That was my order. I didn't even give myself an opportunity to spend the money on anything else. As soon as I was paid, I went in that order. NO exceptions.

Use The Snowball Effect

Dealing with bills

Getty Images

A key differentiator from Dave Ramsey's plans and other financial experts is that he encourages people to pay off the smallest balance first, as opposed to the debt with the lowest interest rate. Paying off debt is not just about math. It's psychological. When you get aggressive and start seeing those debts disappear, it sparks something in you. I listed my debts from smallest to largest and tackled them that way. My credit cards were first. Student loans were second, and then the car.

Live Within Your Means

I made a lot of sacrifices. I did not get my nails done at all. I painted them myself and saved money. Getting your nails, hair done very week, eyelashes etc. all add up. I cut down on brunch and eating out. I didn't even shop. I work red carpets for major awards shows and film releases. I reached out to friends and other correspondents to borrow outfits. I reached out to stylists. I had no shame. If I had to purchase something, I would go to Goodwill. My wardrobe struggled, and I definitely didn't purchase anything designer.

Your net worth is your total assets minus your debt payments.

The reality is that most people are BROKE, but we aren't living as such. Those purses and designer shoes. They aren't helping you achieve wealth. I didn't pay for ANY travel. I had several trips that were the luxury of my entertainment gigs. Those trips were paid in full. I used my airline miles to pay for a flight to Bermuda for a weekend trip with my girls. I budgeted for the weekend and didn't use any credit cards. I was also able to use airline miles to cut down the costs of my holiday travel.

Stick To Your Budget

Getty Images

Making a budget and sticking to it is ESSENTIAL to paying off debt. Have the discipline and hold yourself accountable. Personally, I am old school. I created an Excel template that I used, because manually looking at my bank account and monitoring my transactions really helped.

Dave Ramsey also offers a free app "Every Dollar" that helps with budgeting. The easiest way to mismanage your money is to not budget for every dollar and to not monitor your behaviors. EVERY DOLLAR that I made had a designation.

Dave Ramsey's plan has helped millions of people become debt-free. As a next step, I'll be building an emergency fund ($15,000) and then saving for an investment. This is no promo. Dave Ramsey is a free resource that I found extremely helpful and wanted to share my journey.

If it's easy to obtain, it will not make you wealthy. Credit cards. Car notes, etc. are all easy to obtain. They will not make you wealthy. Also, while I understand that there are people who have way more debt. Understand this. If I paid off $40,000 in 18 months that means that I could pay off $80,000 in 36 months. I strongly encourage you to not make excuses. To feel motivated. To listen to a few debt-free screams on Dave Ramsey's YouTube channel and be inspired. It's worth it.

Many believe that when you start to show God and the universe that you know how to manage your money, you begin to get rewarded with more of it. I am walking proof of that. This year, after paying off ALL my debt, I am slated to earn more than $110K.

I have an 800+ credit score and have made a vow that I will NOT take out any debt except for a mortgage. I will not have credit card debt. I will not buy a brand-new car. I will save and invest and live the lifestyle that I deserve.

Click here to view Dave Ramsey's Baby Steps. Good luck on your journey!

Want more articles like this? Check out the xoNecole reads below:

How To Rebuild Your Credit Score In 2019 - Read More

I Paid Off My $15,000 Credit Card Debt - Read More

How Financial Coach Dr. Lynn Richardson Helped MC Lyte Triple Her Income - Read More

Relationship Goals Or Financial Goals? That Is The Question - Read More

Sign up today and be the first to get notified on new updates, exclusive events, retreats and giveaways!

More Posts

The time has come for us to debunk a few old wives tales that have been passed down for generations. For example, I was taught that if you put your purse on the floor, you won't have any money. If you go outside with no clothes on, you'll catch pneumonia in your ass (a direct quote from my mother, by the way). And I also learned that if you don't run your chicken under some water before you cook it, you just might die.

Keep reading... Show less

In March, we discovered that media correspondent Tamron Hall was expecting her first child at the age of 48, and only a month later, baby Moses was born. While some felt that her pregnancy was an unwise decision, other women praised Tamron for her courage and commended her for her tenacity to become a mother at such a mature age.

Keep reading... Show less

In About Face, xoNecole gets the 411 on IGers who give us #skincaregoals on the daily. Here they break down their beauty routines on the inside and out, as well as the highly coveted products that grace their shelves and their skin.

Keep reading... Show less

How We Met is a series where xoNecole talks love and relationships with real-life couples. We learn how they met, how like turned into love, and how they make their love work.

Editor's Note: As of December 2018, Shannon and Jared are married! Congrats to the happy couple!

In true millennial modern love fashion, for Shannon Boodram and her partner of two and a half years, Jared Brady, first came sex and then came love.

Keep reading... Show less

Getting to know someone and intertwining your lives can be incredibly difficult.

When my boyfriend and I set out to conquer an escape room, we went into it thinking we'd be fussing and fighting the whole time – much like our at-home lives. With the way we'd been arguing lately, I had no idea how we'd make it through the experience. We'd always wanted to try, though, so we had no choice but to figure it out…together.

Keep reading... Show less

Disclaimer: This is my personal experience with using this douching method. Please consult your gynecologist beforehand. Otherwise, use at your own discretion.

There's no immunity for womanhood. Whenever it begins, it comes at you full force and, because of this, you're always learning something new about your body. From the whiskers that line your chin to the horrific vaginal upsets that come a dime a dozen.

Keep reading... Show less
Exclusive Interviews
Latest Posts