My Path to Financial Freedom

How I paid off all my debt in 2 years

My quest to financial freedom began in a place of dissatisfaction. I was heavily in debt — credit card balances, vehicle loans, education loans, you name it. Every month, money would leave my account before I had a chance to think about it.

It seemed like I was constantly chasing the next payday, working hard simply to stay up. I recall thinking that something needed to change, but I didn’t know where to begin. I wasn’t particularly financially aware, and terms like “budget” and “debt payoff” seemed exotic to me.

I finally concluded that was no longer how I could live. Even though I wasn’t sure exactly what the plan was meant to look like, I knew that I needed to construct one.

I began listening to podcasts, watching others online who had already attained my goals, and reading blogs. Not quickly, by any means, but gradually things started to make sense. I started to feel more in control, as like perhaps — just possibly — I could pull this off.

Step 1: Understanding my financial situation

Before I could begin, I wanted to have a clear picture of my finances. I recall sitting down with a notebook and recording every single loan. It was painful. Seeing those figures on paper jolted me into reality. But I knew it had to be completed. Every bill, interest rate, and minimum payment made it onto the list. I couldn’t keep pretending everything was fine when it wasn’t.

Once I had everything spread out, I started tallying up all of my expenses. Some of them I knew by heart, such as rent and utilities, while others required a bit more investigation. I realized I was spending much more money on dining out, entertainment, and random web shopping than I had anticipated. All those “just this once” purchases really added up. But I had never stopped long enough to see it.

Step 2: Creating a plan

I knew that the only way out was to devise a strict plan. That’s when I created my first budget. Now, I will admit that it was not flawless. During the first few months, I went above in certain areas and below in others. But the thing is, I stuck to it. I was confident that I would improve my money management skills over time. So, I allowed myself to make mistakes along the road. The crucial aspect was to retain my focus on the big picture: financial freedom.

Photo by Kenny Eliason on Unsplash

To make it all work, I knew I needed to cut down on non-essential expenses. That’s when I started eating out less, making spontaneous purchases, and canceling unnecessary memberships. It felt strange at first. But after a while, I stopped missing those things. Instead, I felt satisfaction in knowing that each dollar saved brought me one step closer to debt freedom.

Step 3: Side hustles to the rescue

Now it wasn’t just about saving. I also needed to increase my earnings. I didn’t have a high-paying job, so I couldn’t ask for a raise. So I started looking at side hustles. At first, I dabbled in freelance writing, which didn’t pay well but helped. Then I began driving for ridesharing apps on weekends. I took on odd jobs — house sitting, cat sitting, whatever I could find.

Initially, juggling many side hustles and my full-time job fatigued me. But I discovered that the more I worked, the faster I could repay my debt. I began to see each side business as a tool, as if every hour I worked brought me closer to financial freedom.

Step 4: Tackling debt with strategy

Once I started earning more and saved more, I needed a robust debt payback strategy. That’s when I discovered the debt snowball and debt avalanche approaches. The snowball strategy requires you to pay off your smaller obligations first, building momentum. The avalanche strategy, on the other hand, prioritizes addressing the debt with the greatest interest rate first.

At first, I attempted the debt avalanche strategy, which made the most mathematical sense. However, for me, paying off little loans felt more fulfilling, so I moved to the snowball method. Each time I checked a debt off my list, I felt like I was making genuine progress, which kept me going.

I did not stop paying minimal payments on my other obligations while focusing on one. I made sure I didn’t fall behind. However, the majority of my excess income and resources were directed toward the debt at the top of my priority list.

Step 5: The power of mindset

Throughout this journey, I discovered the power of mindset. I began to see money differently. Instead of seeing it as something that came and went, I began to think of it as a tool. Each dollar might work for or against me. I could spend money on something temporary, or I could utilize it to pay off my debt and develop my future.

Photo by Seema Miah on Unsplash

I also started practicing thankfulness. It may sound trite, but it kept me focused. Instead of feeling deprived, I decided to be grateful for what I had. When friends invited me out and I had to decline since it wasn’t in my budget, I reminded myself that financial freedom was more important than a night out.

Step 6: Building an emergency fund

Building an emergency fund was one of the things that kept me from going into debt again. It didn’t happen all at once, but I progressively saved tiny amounts each month. The cushion provided me peace of mind. Life throws curveballs. Knowing I had something to fall back on allowed me to sleep easier at night.

Once I had adequate savings, I stopped using credit cards for unforeseen needs. That was a big step forward. I would no longer add to my debt when something went down or an emergency arose.

Step 7: Celebrating small wins

I will not lie: paying off debt required discipline, patience, and sacrifice. However, I made sure to rejoice along the way. After paying off a credit card, I’d reward myself, but only within reason. Maybe I’d get a special coffee or treat myself to a minor item that I’d been putting off. Celebrating these victories kept me going.

By the two-year point, I was debt-free. It seemed weird. For the first time in my adult life, I was not burdened by monthly bills. I could now think about what came next: accumulating wealth, investing, and saving for the future.

Lessons I learned along the way

1. Consistency is key. You do not need to be perfect. But you must show up and keep going forward. Every little bit counts.
2. Sacrifice is temporary. Yes, I had to give up some privileges along the way. But now that I’m debt-free, I can enjoy my life.
3. Side hustles add up. Every extra dollar I earned went directly into my debt. Even if they seemed insignificant at the time, such side hustles added up over time.
4. Mindset matters. Changing my perspective on money and debt altered everything. Instead of feeling stuck, I regarded my debt as a task that I was motivated to overcome.
5. Celebrate progress. Celebrating minor victories kept me motivated. The route to financial independence is not always enjoyable. But taking the time to reflect on how far I had come helped me stay motivated.

Now that I’m debt-free, I can make decisions I couldn’t previously. I can save for things I actually desire and create a future that is not hampered by previous mistakes. That sense of financial freedom? It is worth every sacrifice, additional hour worked, and difficult decision made along the way.

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