Building a Debt Payoff Strategy

In 2017, I was $100k in debt working a job that made about $60k (I work in sales, so it varied depending on performance).

I had no strategy at the time to pay off this debt. I thought living with that debt was just part of life.

It took hitting rock bottom to realize that I needed a change in my life. That rock bottom was not being able to afford to visit my sick father, not being able to pay my bills, wondering if I was going to be evicted and even having my card declined trying to buy groceries.

Maybe you’re feeling that way right now.

Well I’m happy to tell you, by living like a complete weirdo, I was able to pay off all my debt in two years.

“Wait, Dan, you were making $60k/yr and managed to pay off $100k in debt in two years? Sounds fishy.”

I’ll explain. And I’ll break down the three main areas I think are key to having a successful debt payoff strategy.

First, you need to make some big changes

My journey started with a new car, living in an apartment by myself.

It ended with me having 5 roommates and driving a van.

Those are examples, not requirements. I often share my story, and people say, “Well I can’t do 5 roommates. I’m married with kids.”

You’re right! Your journey should look different.

My point is that there needs to be a massive shift in your life. That might mean moving to a new city, moving in with family, giving up that large expense that your kids really “need”.

My mom never made more than $14/hr - I turned out mostly fine :)

Whatever the change is, you know you’re on the right path because your friends will think you’re weird.

These changes I made saved me $800/mo on rent, $300 on a car payment, and got rid of $18k in debt (car).

And if this change makes you uncomfortable… Good! You’re in debt, you should be super uncomfortable. That will motivate you to do the next step.

Second, you need to make more money

Remember when it sounded fishy that I paid off $100k in debt making $60k?

Well, that’s because I made more than $60k.

Because I was working tons of side gigs!

I had no option to be honest. I couldn’t afford to pay my bills. So I started by going to this exact Blood Plasma Center (clinic?). And selling my plasma.

You think I wanted to do that? You think I wanted to go sit down in that office for 30 minutes, get my finger pricked, get my arm stuck for an hour?

No!

I got home and was like, “That sucked! I need a better side gig.”

This was 2017, Uber wasn’t even in Austin, TX.

So I hit Craigslist and found a Brand Ambassador gig. Handing out flyers for this brand at Austin City Limits.

You think it felt good when I saw a group of girls I knew and explained to them I was working handing out flyers?

Look, there’s nothing wrong with the work, I’m just saying, it’s uncomfortable!

I was always looking for side work, and it helped me make about $800/ week.

And let me tell you something, when you’re working your tail off, this last piece becomes easy.

Third, figure out your spend triggers

I don’t need to tell you that part of getting debt requires you to stop spending so much money.

But, have you ever sat down and figured out what your “spend triggers” are?

That’s a word I just made up this morning. Basically, what are the situations, experiences, or events that cause you to spend carelessly?

It might be that you get exhausted and eat out, out of convenience.

It might be that you want to provide your kids the things you didn’t have growing up.

It might be when you’re sad you shop online.

Imagine you’re trying to quit drinking. You’d probably at least stop going to bars right?

If you’re trying to get better at not spending, what are the things you’re doing to set yourself up for success?

When you get uncomfortable and work your tail off, the motivation gets even stronger.

The point of doing all of this isn’t to live like this forever. The point of doing this is to be like a shot of nitrous oxide for your debt payoff vehicle.

So recklessly spending, living comfortably and not working hard is just slowing your vehicle down.

Next Steps

Apologies this is a long email, I’m on a bit of a rant here.

Here’s what I want you to do.

1 - Go make a budget - identify your spending triggers. Be honest at least with yourself.

2 - Identify at least one big change you can make in your life - this will take time. Focus. Put your phone away. Be present and truly reflect on your life. You’re smart, you can figure this out.

3 - List out your debts - calculate the time it would take to pay off with the big change and this new budget. Then calculate how much faster you’d pay it off making $1k per month (that’s like 15 hours per week depending on the pay). Let that motivate you to go find a side gig while you get rid of debt.

And as always, reach out if you have questions.