One of the best things that happened to me on my trip was that I got really inspired to pay off debt.
Being able to really be alone and sit with my thoughts made me realize a lot. More than anything, I really want to be out of debt.
I started thinking of how I could be out of debt as soon as possible and not the 2-3 years I’ve been thinking of. After looking at my income and doing some soul-searching, I set a crazy goal of getting out of debt in one year.
My mind is still grappling with this goal as it seems so crazy and out of reach. My debt is currently at $28,737.59 (I just recently put $2,200 to debt).
In order to accomplish this goal, I need to make 4k or more each month. I want to pay at least 2k to debt each month, live off of roughly 1k (see my low expenses here) and put 1k to insurance and taxes. If I make more, I will put more to debt and savings — and perhaps even investments. I’m getting the urge to dip my toes in the water and get started.
After a year of making 2k+ payments, I want to throw some of my remaining savings at debt and be done.
Once I did the math, I felt so motivated. Because my income was stalling for months, my debt free date was constantly 2-3 years away. But in March, I made some drastic cuts, and started focusing relentlessly on higher paying work. And I’m so freaking glad I did. Because for the past two months, I’ve made more than I have in my whole life.
If I can keep up at this pace, I’ll be looking at a $48,000 or more salary. That may be a modest salary to some, but considering my salaries have all been low to mid thirties, this is a huge jump. A palpable jump. I can see the difference in my bank account and it’s the only way I’m able to afford to put 2k to debt each month. It just reminds me that as much as I like being frugal and saving, sometimes it really is about earning more.
So how in the heck do I plan to make this happen?
Well, the move is off. I realized I cannot accomplish this goal if I moved to LA or NYC. At this point, both of the cities have lost their charm after my enchanting affair with European cities anyway. I’d love to move to Europe some day. But that’s a story for another day. The point is, I’m staying put in Portland for at least another year, or more to get my financial life in order.
Secondly, I’m going to continue to work my butt off (while continuing to prioritize self-care and rest) so that I can keep my clients happy and also secure more work when I need it.
Also, starting June 1 I am mostly giving up credit cards and opting for cash. I say mostly because I will still have my insurance and other auto pay things on my card. But I don’t want to be tempted at all to spend more, so I am sticking to cash for everything else.
I am also giving myself a strict $100 budget each month for fun. I plan on significantly reducing my restaurant and happy hour expenditures.
These are the strategies I am going to use to try to knock this debt out in a year. A year seems manageable. A year seems like if I work really hard and stay focused, I can be done with this forever.
I can start saving and investing 2k each month. I can travel for longer periods. I can rid myself of 99.9% of spending guilt.
Before I was burnt out and just surviving. Now I’ve had time to rest and really evaluate my priorities. I know money is a tool to help you get what you want out of life. I want freedom and travel and adventure. I know I can have all of those things, while still setting myself up for a nice future, if I get out of debt asap.
It feels weird and scary to share this goal. Especially because my income depends on me. I don’t have a cushy job where I can sit back and make $50k. I have to work, hustle, pitch, edit, revise, and manage my work to make a buck. And I’m so grateful for that. But I know that things can change with clients — budgets change, directions change, etc. So much feels out of my hands, but I will do my best to continue to work hard and if things fall through, make something else work.
Self-employment is for the resilient.
So, there you have it. My big, crazy, audacious goal. I am nervous, but I’m ready for a challenge.
I will be debt free by May 21, 2016. Let the countdown begin.