My friend (and badass TV producer/development exec), Kristen Carter, posted on Facebook , last week, that she paid off $45K in credit card debt in 1 year!!! Huge accomplishment, and I LOVE the way she did it -- with intention and without punishing herself. So, I asked her to guest post, to share her wisdom because let's all help each other to get to financial freedom!
April 2014. I was so excited at the start of the month because I was reuniting with my older brother. Even though I grew up as an only child, I have three biological siblings on my dad's side and my older brother had decided to take a leap of faith and move to LA. During his process of transitioning to the West Coast, we made the decision to move in together and begin a journey of connection and hopefully unite our other siblings in the process. We had our family goals all figured out but what I didn't realize was that financially, my brother wouldn't be able to keep his end of the bargain. We signed a joint lease in May 2014 and due to some unforeseen circumstances, he went through his savings like quicksand in a matter of weeks! That meant I needed to cover a majority of our first month's expenses...and then our second...and then as it was nearing toward the third month, I hit sheer panic mode. I was shocked, disappointed, and also PISSED. I felt forced to pay the bills I thought we would be splitting. What happened to our plan of working together? It just seemed like everything was falling on me, in a season where I had zero savings because I had just wrapped up a 1.5 year tour with my short film and had just finished paying a grip to the IRS for the first time ever. This was the year I hit a financial fallout.
At the time, I was livid because I felt my trust had been broken but I was also upset because I hadn't covered myself financially. The financial concerns with my brother exposed my issues with money and I felt naked. Up to this point in my career, I had been doing just fine living paycheck to paycheck and using credit as a cushion but at this very moment in my life, I had no flexibility to use cash or credit and I was stuck. S-T-U-C-K. After grappling back and forth, I decided to call two of my closest friends, an uncle and aunt and explain the situation honestly and humbly. I was able to borrow money from those gracious souls and I went into overdrive. I made it through 2014 and then made the decision to accept a six month freelance position on the East Coast where I'd live at home rent free and then sublet my apartment. I used the savings I made there to pay those four people back and then I began a savings plan. I started saving 25% of my gross income and for the first time in my 10+ year career, I had a nice savings at the end of 2015 and moved back to LA. After that, my mom and I rented out my New Jersey home and that changed the game for me. Over the next two years, I bumped my savings up to 30% gross and managed to save $20K that remained untouched for a year because I was scared the bottom would fall out again. I thought if I paid off some of the debt, I'd need that money at some point so I just sat on it. But there was a distinct moment in March 2018 where I thought to myself, 'Kristen, you are hemorrhaging money. You pay just as much in credit card minimums as you do rent!' and I released the $20K and paid off two credit cards in that very moment. I did it...I really had a $0 balance on two of my seven credit cards...which means, I can really do this! I CAN GET TO $0 DEBT IF I BELIEVE IN MYSELF AND STICK TO A PLAN.
I called my credit card companies and asked about lower APR rates and anything they could do to support me in achieving my goal of a $0 balance for their card. I was able to get a few lower rates and then as I paid off more debt, I began to receive 0% balance transfer offers. By the end of 2018, I had just one balance to pay off and I hit $0 credit debt in March 2019!
Releasing $45K of credit card debt has been one of the greatest accomplishments to date. I have never known adult life without credit card debt and there were so many emotions tied to the expenses that made up that $45K - from frivilous post-college expenses...to the 2009 recession where I paid my mortgage on cash advances...to the move to the West Coast...to my short film production...to my unfortunate fallout with my brother which has since been a healing in process...the money and the numbers tell a story. What I've learned is you can't give what you don't have. If you lend something to someone, only allow that transaction to happen if you can afford to let what was borrowed go. When everything happened with my brother, I felt forced to give that money up and it tipped the scale but honestly, if it wasn't that exchange it would have been something else. So I'm grateful for the lessons that life taught me through that experience.
My biggest pieces of support for you would be:
1) Keep a log of what you spend each month and get clear where your money is going. For me, I don't shop often but I spend money on food and dining out. For a long time, I judged that and felt I needed to not dine out at all. I would try and fail every month. So I became more gentle with myself and scaled back on dining out. I now carve out a maximum number per month I'm willing to spend and I track that.
2) Always pay yourself first - no matter how big or small. Stick with a percentage of your income that you'll pay yourself, keep it set aside and watch it grow.
3) Write down your credit card debt along with your APR rates. Depending on what motivates you more, get rid of the debt with the highest APR rate OR pay down your smallest cards first. For me, I needed to start with getting rid of two cards and seeing I could hit zero somewhere and then I concentrated my attention on my high APR cards.
4) Call your credit card companies and find out if there are any options for lower APR rates or any promotions for 0% balance transfers.
5) Make saving fun. For years, I didn't think getting to $0 debt was achievable. I'd write the goal down and it wouldn't even make it to the official goal list for the year. But things changed when I shifted my mindset. I get to be financially responsible. I get to take care of myself. I get to pay these bills off. I get to be financially free. And that's when I started getting more and more aggressive, which resulted in me running to my goal within one calendar year.
6) A lot of people stress about attracting additional income. Instead of getting a second job and stretching yourself too thin, what kinds of things do you like to do in your spare time - do you bake cakes, make blankets, like to drive, play an instrument? Is there anything you can place a price point to that you do - any kind of consultation? I have created more financial flexibility by consulting on the side. The smaller amounts of money are consistent and keep me going on and off freelance jobs.
If I can do it, so can you. I'm totally open to answer any questions you may have. Fly high and soar toward financial freedom!
Kristen V. Carter is an award-winning content creator, entrepreneur and speaker. She has produced for a variety of television’s top programs including BET’s Black Girls Rock and NBC’s The Voice. In addition, Kristen has served as a speech writer, and in 2007, she founded JazziDreamer Entertainment LLC, a multimedia company specializing in writing, consultation, and production services. Most recently, Kristen wrapped a Director of Unscripted Development position where she co-executive produced the documentary show Motherly Love for the Oprah Winfrey Network. Kristen’s entrepreneurial pursuits continue to expand with the creation of Trust Your Magic™, an inspirational brand that reinforces the power of honoring one’s gifts and talents. The brand also includes an empowerment event series, entitled Blessed, Booked and Busy, an interactive workshop for freelancers to catapult their lives and take their careers to the next level. She is a proud graduate of Hofstra University.
You can click on the links in Kristen's bio to reach her or please leave your comments below! I'm always here to support you in your journey towards financial freedom, as well! Reach out to either of us to talk, for free! Kristen and I are also planning on hosting a workshop together, hopefully, coming soon this Summer! We'll keep you posted. Meanwhile, Happy Earth Day!