My 2020 New Years resolution was to become debt-free.
But we all know what happened next.
Just to be clear, Ive been lucky during the pandemic.
Ive kept my job.
I havent gotten sick.
I havent lost income.
I can easily work from home.
But seeing 40 million people suddenly out of work was a wakeup call.
Not knowing how bad things could get, I started saving more and made minimum debt payments.
I also used the stock market crash as an opportunity to invest more.
As fall approached, it was time to clamp down on my more than $12,000 debt.
But heres what struck me as I scoured my budget: Im really notthat badabout overspending.
Im not saying Im perfect.
I have three streaming services.
I buy more beer than I care to admit.
I found about $400 a month I could easily trim.
No Interest Til Almost 2027?
But I was still hanging onto a goal that was becoming more unrealistic by the day.
To shed $12,000 of debt fast,saving moneywasnt going to be enough.
How Did a Personal Finance Writer Get $12K in Debt?
Yes, Im a personal finance writer who had $12,000 worth of debt.
But Im also a human first and a personal finance writer second.
Hey, Im guessing even your cardiologist eats a cheeseburger from time to time.
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I wasnt struggling with out-of-control debt.
I could easily afford my minimum payments, which totaled about $700 a month.
Mycredit scorewas still in the high 700s.
But I know what its like to have so much debt you feel like youre choking.
When I was 19, I racked up a bunch of credit card debt I couldnt afford.
I spent years paying for that.
I was really embarrassed, so I struggled in silence.
Paying off debt is a lot easier when you have breathing room.
This time around, I wasnt struggling for air.
Instead, I was excited about all the things I could do with an extra $700 each month.
I found two solid freelance clients to write and edit for by mid-September.
I could still make real progress.
One client paid lightning fast.
When my work was approved, Id often get paid that day.
I started making debt payments every single day I got paid.
Doing work one day and then seeing the balance drop the next was addictive.
It made me want to work even more.
And I told myself:Theres still time to make this happen.
On Oct. 5, I decided it was game on.
Twelve weeks and three days remained on the clock.
Thats not much time to make an extra $12,000.
But I also didnt want to start 2021 owing the IRS.
Since I was earning significant self-employment income, Id have to set aside money forfreelance taxes.
I decided to set aside $1 for every $2 I earned.
I was already spending $700 a month on debt that I could factor in.
That meant my actual goal would be to earn just shy of $16,000 in 87 days.
I have the privilege of working from home during COVID-19.
My job isnt physically demanding.
Most importantly, I wasnt struggling financially.
I have a steady job, savings and good health insurance.
Being able to pay off debt quickly is a luxury.
So none of this is intended to say, Heres what I did and you should do it too.
But if youre able to crush your debt quickly, these are the strategies that worked for me.
I worked 80-hour weeks for 12 weeks straight.
I didnt say this was easy.
My weekdays looked like this: Wake up at 5:15 a.m. Work for an hour.
Walk my dog Kermit.
Go to the gym.
Work my day job for eight or nine hours.
Another three hours of freelance work.
On Saturdays and Sundays, Id usually work another eight to 10 hours each.
I worked on Thanksgiving.
I used two weeks of vacation to do even more work.
But its a pandemic.
Its not like I had anywhere else to be.
I stuck with what I know.
I probably spent 10 hours writing it for the same pay as those one- or two-hour assignments.
The time to learn new skills is after youve paid off your debt.
I ignored my other goals.
Making fast progress on one goal was way more empowering than making slow progress on three goals.
I priced my work by the hour, not the service.
This ones big for writers, because we often get hung up on a per-word rate.
Freelancers often do so much work just to find work before they even make a cent.
I let myself waste money on some stuff.
When youre working 80 hours a week, you see how valuable your time really is.
So I gave myself permission to waste some money.
I paid it off in $500 increments.
At first I made smaller payments several times a week.
Then suddenly it wasnt.
Paying off debt gets old really fast.
Seeing my balances drop a little at a time got frustrating.
But I wouldnt have been as energized if Id only made one payment a month.
I settled on making $500 payments.
The size and frequency of the payments were just the right dose of motivation.
I annoyed people in the process.
I said no a lot more than Im used to.
More important, though, was that I learned to consider the cost of each yes.
The cost of a Wednesday night happy hour wasnt just about the 20 bucks Id spend.
What could I be accomplishing if I wasnt at happy hour?
I spent money in my mind.
Most days I spent a little time thinking about all the things Id do with my extra money.
Sometimes Id research places I want to visit once the pandemic subsides.
Or Id scroll through Zillow on my iPad before bed.
That helped me remind myself of why I was doing this.
Because as the weeks wore on, I was simply exhausted.
TFW You Make Your Final Debt Payment
Id paid off my credit card debt by late November.
The only thing I had left to tackle was the $3,000 or so I owed on my car.
By mid-December, Id whittled down the balance to about $800.
I knew Id be able to pay that off from my Dec. 31 paycheck.
Mentally, I circled Dec. 31 as the day Id be debt-free.
Surprise: A Dec. 30 text notified me that money had been deposited to my account.
Could it be mysecond stimulus check?
Alas, that wouldnt arrive for another two days.
It was a payment for two freelance assignments that I wasnt expecting until mid-January.
I thought about paying it off right then.
But it was midmorning on a workday.
So I held back and waited until I could savor the moment.
That evening after work, I made the final payment with a cold beer in hand.
You feel like confetti should explode from the ceiling the moment you make your final debt payment.
Really youre the only one who cares, though.
You get a lame thank you for your payment confirmation.
But its OK. That $0 balance you see is a good consolation prize.
Should You Pay Off Your Debt in 2021?
Its liberating to know I dont owe anyone money.
But Im actually hoping to end 2021 with more debt.
I want this to be the year I finally buy a home.
Im still freelancing, though at a less frenetic pace.
Now that extra money is going to my down payment fund.
Less than a year ago, it was one I couldnt afford.
Before you double down on debt, I beg you to get your emergency fund in order first.
Once youre ready to tackle your debt, do it with a plan.
Its OK if youre not willing to work 80-hour weeks.
Think about what youre willing to sacrifice and what your limits are.
I knew I could work 80 hours a week for 12 weeks because 12 weeks isnt a long time.
I dont think I could do it for six months or a year, though.
So if you have significant debt, focus less on paying it off fast.
Finding a solution thats sustainable over a longer period is more important.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
She writes the Dear Penny advice column.
Send your tricky money questions to[email protected].
