I Cleared $35K Worth Of Debt While Making $12 An Hour
In 2009, I lost everything. My career, relationship and home. It's amazing how quickly unemployment can knock you down and change the entire trajectory of your life. I went from earning and saving good money to waking up on my 30th birthday living on my sister's couch.
My credit card debt ballooned to $35,000 and my 802 credit score plummeted into the 500's because I couldn't pay bills. Fast forward five years later and I've not only dug myself out of that hole, but I built a business on the way up. I'm currently a speaker, bestselling author, and financial educator running an internationally recognized brand, but before building a successful business I hit rock bottom.
Here are some money lessons I learned from the struggle:
Always Save for a Rainy Day El Niño
There's no way to predict long-term unemployment, but you should always prepare for it with an emergency fund. I lived well below my means to save money before losing my job. Thankfully, I had some savings to live on.
My first "real" job at 21 was as a teacher's assistant. It only paid $12 per hour, so I lived with my parents to stack coins. I found a modest yet affordable rental in New Jersey with a roommate (my sister), that cost just $1100/month, $550 per person including utilities. As my income steadily increased, I kept the same standard of living and a strict bi-weekly budget. I used envelopes filled with cash to divide my pay into categories: bills, savings, entertainment and grooming.
I lived off one paycheck and saved the other.
By 25, I had $40,000 saved in cash.
Live Richer Lesson #1:
Nothing in life is guaranteed, so establishing good saving habits no matter how much you make is invaluable. Downgrade your life, if necessary. This could mean cutting cable, getting a roommate or keeping your gel manicure on for a few extra weeks.
How To Live This Lesson Now:
Begin to set aside a few dollars from each paycheck in a savings account. Don't have the discipline? Start with Digit. This free resource studies your financial moves and automatically transfers money from your bank account to your Digit Account. They will send you daily, fun texts with updates of your balances and transfers. You can choose to save more, pause savings or withdrawal your money via text as well. Your money is FDIC insured and they have a no-overdraft guarantee. Oh, and they do it for free!
Nothing Good Comes Easy
Before joblessness, my savings game was on point, but my investment game was lacking. I made one crucial mistake that put me in a world of debt and made unemployment overwhelming. At 27, I asked a wealthy friend of mine to teach me how to invest and he pitched me a genius plan. We would buy high-end clothing in New York and ship it to Paris to sell in one of his stores.
My return was supposed to be $1,200 per week for two years. Yup, you read that right. I thought I was going to make $62,400 per year shipping clothes across the pond. I was so excited about making racks on racks that I applied for new credit cards and took out cash advances totaling $20,000.
We sent our first shipment to Paris then I never heard from him or received any money. It devastated me at the time, but I can appreciate the lesson. First, be careful who you trust. Second, if a plan sounds too good to be true, believe it. Last, hard work and passion are what will pay off tenfold, not a get rich quick scheme.
Live Richer Lesson #2:
There's no such thing as easy money. When my "friend" aka The Thief shared his get-rich-quick scheme with me, I should have ran for the hills. Looking back on it, it didn't make sense. Rarely in life do you make a ton of money without knowledge and work.
How To Live This Lesson Now:
If you're interested in investing, you first have to invest in knowledge. Two financial books to help you get started are: The Richest Man in Babylon by George Clason, Stock Market Investing Mini Lessons For Beginners: A starter guide for beginner investors by Mabel Nunez.
Odd Jobs Add Up
Losing my job and the implications of bad investing had me down and out. At 30, I was directionless and living off the little savings I had left. I didn't know how to start over after losing so much. Back when I was a teacher, staff members took notice of my money management skills and looked to me as a financial resource.
Looking for something to keep me busy, I began volunteering at several nonprofits teaching financial education. I networked like my life depended on it and asked nonprofits to refer me to other organizations for paid opportunities. Since I couldn't find 9 to 5 work, I did a bunch of side hustles to make money. I took on one-on-one financial consultations, babysitting and tutoring.
Sidebar: Don't discount volunteering. I met my first clients for The Budgetnista by volunteering. By combining volunteering and sharing me in action on social media, I was able secure a new client each time I spoke and posted myself speaking online. In the beginning, 80% of my business came from the posts I shared on Facebook. So use your social media network to showcase your skills and increase your income.
Live Richer Lesson #3:
If there's no place for you in the workforce, make your own way. Use your experience and passions to offer a product or service that someone finds valuable. Hustle even if you have a full-time job. Multiple streams of income will lead to financial security.
How To Live This Lesson Now:
- Use Your Degree. If you have the education, put it to use. You can charge more money for a service when you're an expert in a field. Think about how you can shape your education into an extra source of income.
- Do What You Do For a Living. You can hit the ground running with your side hustle if you have work experience in the industry. There's no learning curve and you have a resume that proves you know what you're doing.
- Activate Your Passion. Start charging for things you already do for free. You already have an established clientele who like your work and you can use them to spread the word.
- Negotiate a Raise. Start to collect all of the amazing value you bring to your job. Put it together in a file. Make sure you monetize your value. Example: The decision you made to do _________ is saving the company $10,000/year.
Take Ownership of Your Situation
At first, I didn't want to face my credit card debt from the bad investment even when I started making money again. I felt paying any more than the minimum payment was admission of guilt and I didn't want to take full responsibility.
Only after owning the mistake and forgiving myself was I able to start crushing the debt. I transferred my credit card debt to cards that offered introductory 0% interest rates, so the money I paid largely went to principal instead of interest. (Use Magnify Money to help you find the best balance transfer cards.) If I had continued to sit back without taking ownership, interest would have increased my debt exponentially.
Since I've been through the struggle, I understand how disheartening financial missteps can be. You feel destitute, desperate and hopeless, but there is a way out if you face the situation. Open the bills, pick up the phone for collectors and form a plan. Sure, it won't happen overnight, but you have the power to change your situation.
Live Richer Lesson #4:
Have you made financial mistakes in the past? Are you currently making financial mistakes? Will you probably make financial mistakes in the future? Yes?! Well, so did Will Smith, Rihanna, Suze Orman, and me!
Sometimes you are unable to move forward financially, not because you don't make enough money, not because you don't have the resources, and not because your situation is un-repairable. The truth is, you have yet to get over your financial mistakes if you want to move onto greener pastures (pun intended). Financial forgiveness is one of the first keys to becoming financially healthy.
How To Live This Lesson Now:
- Admit to Yourself and Take Ownership. Confess; say "I messed up when I __________". Feel free to substitute the word "messed" with your verb of choice.
- Identify the What and Why (Be Very Specific). Take a break from beating yourself up for a minute and clearly identify your mistake and why you made it.
- Tell Someone You Trust. OK, so this may be a tough for you, but tell a trusted confidant. Doing so will allow you to let go of the shame, begin to forgive yourself, and ultimately work on a solution.
- Focus on a Solution. So the truth is out, and it's time that you focus on what IS, verses on what ISN'T.
- Plan, Then Work the Plan. Once you've drafted your list of possible solutions, pick one and begin crafting a plan. Not sure how to start or what to do?
Using these four lessons, I now run a successful business, and no longer struggle financially.
Tiffany Aliche, better known as "The Budgetnista", is America's favorite financial educator and she's here to answer your money questions.
Featured image by Getty Images
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ItGirl 100 Honors Black Women Who Create Culture & Put On For Their Cities
As they say, create the change you want to see in this world, besties. That’s why xoNecole linked up with Hyundai for the inaugural ItGirl 100 List, a celebration of 100 Genzennial women who aren’t afraid to pull up their own seats to the table. Across regions and industries, these women embody the essence of discovering self-value through purpose, honey! They're fierce, they’re ultra-creative, and we know they make their cities proud.
VIEW THE FULL ITGIRL 100 LIST HERE.
Don’t forget to also check out the ItGirl Directory, featuring 50 Black-woman-owned marketing and branding agencies, photographers and videographers, publicists, and more.
THE ITGIRL MEMO
I. An ItGirl puts on for her city and masters her self-worth through purpose.
II. An ItGirl celebrates all the things that make her unique.
III. An ItGirl empowers others to become the best versions of themselves.
IV. An ItGirl leads by example, inspiring others through her actions and integrity.
V. An ItGirl paves the way for authenticity and diversity in all aspects of life.
VI. An ItGirl uses the power of her voice to advocate for positive change in the world.
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How A Stay At Switzerland's Luxurious 7132 Hotel Reminded Me To Live The Life I Deserve
Sometimes, as women—especially as single Black women—we simply need to be reminded that we are deserving of living a life we dream of. Even if that means creating it for ourselves. I recently set out on a weeklong trip to Switzerland, a trip I’ve been wanting to take for years, and near the end of my visit, I had an epiphany.
“DeAnna, this is the life you deserve,” I thought to myself as I took in the gorgeous bathroom in my suite at the famous 7132 Hotel and Thermal Spa. It was one of the most luxurious hotels (and bathrooms) I had ever stayed in—and that’s saying a lot for someone who often travels for work.
To help you better understand why this was such a mental awakening for me, I first need to give a bit of my backstory. I’m in my late thirties. I’m an attorneyand a journalist. I own a home and have traveled the world extensively. Essentially, I’ve done everything in life I set out to do. However, when it comes to dating, I struggle. Not because there is anything wrong with me per se, but because my career and “lifestyle” often create problems in my romantic relationships.
View from my hotel room
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I’ve been told everything from, ‘I can’t continue to date you because you seem to choose your career over wanting to settle down and have kids’ by a man after only the second date to ‘Maybe if you just sat down somewhere for a while, I’d actually wife you’ by someone who has honestly never proven themselves to be the settle down type. And these are only a handful of the things I’ve been told over the years.
It’s been frustrating, to say the least, and there have even been seasons where I purposely dimmed my light in hopes that my career wouldn’t push away potential suitors. I know what you’re thinking, “Girl, why would you even consider that? If they’re for you, it won’t matter what you do.” Hey, don’t judge me, but also, I one hundred percent agree.
My hotel bathroom
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That’s why this recent moment in Switzerland was right on time. When I first walked into the hotel to check in, I was blown away by the surrounding beauty. It was a five-star property with one of the world’s most famous thermal bathhouses. Yet, it was something about seeing that 90% of the hotel’s guests were couples, that forced me to sit back for a bit of introspection—while soaking in the thermal spa, of course.
As I went through the mental conversation, there was a battle of sorts. On one hand, I knew that being able to partake in experiences like the one I was having at that moment was important to me. I knew that, at times I actually love being able to dabble in the finer things—after all, I’ve worked hard to be able to afford them. On the other hand, and sadly, I knew that sometimes being a single Black woman that publicly showcases her “luxurious” habits can intimidate men and even scare them off from pursuing you under the guise of them feeling like they “can’t do anything for you, because you have everything.”
My hotel room
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So, what is a girl to do?
Do I minimize/hide the life and experiences that I have? Do I play down the hard work I’ve put in to get where I am professionally? Or, do I risk being single in exchange for being able to have said life, without backlash?
Luckily, the joy that I felt while being at this property won. There was something about taking a full day to simply pamper myself at the bathhouse and in my in-room steam shower and soaker tub, indulging in cuisine from a 2-star Michelin restaurant and doing all of this while surrounded by an amazing group of Black women that reminded me—this is certainly the life I was meant to live and that I deserve. Even if it means that right now, I’ll just have to provide it for myself until the right partner comes along. And honestly, I’m okay with that.
Restaurant at 7132 hotel
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