The following article may contain affiliate links or sponsored content. This doesn’t cost you anything, and shopping or using our affiliate partners is a way to support our mission. I will never work with a brand or showcase a product that I don’t personally use or believe in.
“When we realized we were over six figures in debt—including $70,000 in consumer debt—I asked myself, ‘Who did we think we were? Do we even make $70,000 a year?’ That was the moment we knew we had to change our approach to money.” – Jazmin Higgins
Paying off debt can be one of the toughest money challenges, and when you’re in the middle of it, you might feel like there’s no way out.
But it IS possible to pay off your debt. I know, because I’ve talked to hundreds of folks who have done it.
Jazmin Higgins—a financial coach who paid off $70,000 of debt–is one inspiring example.
Jazmin joined me on the Financial Feminist podcast to share her journey of becoming a teen mom, conquering $70,000 in consumer debt, and building wealth as a money expert who helps others do what she did.
She shared SO MUCH good advice in addition to her story.
Here are some of her top takeaways to help you pay off your debt:
Know your numbers to take control of your debt.
When you’re facing a large amount of debt, it can be easy to fall victim to the Ostrich Effect.
The Ostrich Effect is when you avoid addressing and accessing a situation because you’re afraid of what you’ll find. You’re the ostrich that would rather keep its head in the sand.
We’ve all been the ostrich at some point in our lives, and it’s especially common for folks dealing with debt. BUT you’ll never make progress as an ostrich.
Jazmin emphasizes the importance of listing all debts, expenses, and income to understand your financial situation fully. Taking an honest look at her money allowed her to create a concrete debt payoff plan.
“Knowing your numbers is crucial. You can’t create a plan unless you understand how deep the hole is.”
- TIP: Sit down and itemize all your financial obligations—debt, regular bills, and other expenses—and your income sources.
Create dedicated savings funds.
To stay out of debt, your very top priority is to build your emergency fund.
An emergency fund is 3-6 months of living expenses set aside in a high-yield savings account (HYSA).
Without this safety net ready, an unexpected expense could force you to take on more debt, and that’s the last thing you want ON TOP of an emergency.
Once you have your emergency fund, you may want to set up multiple savings accounts for different purposes, such as regular bills, travel, and big future purchases. This separates the “needs” from the “wants” and can help you feel less guilt about spending money on essentials.
Organizing your money in this way will give you a clearer picture of where you stand financially, which can help you avoid falling back into debt.
- TIP: Establish an emergency fund and create separate savings accounts for specific spending categories.
Use a goals-based budget.
I’ve said a million times and I’ll say it again—you don’t have to stop spending money. You just have to stop spending money on things you don’t care about.
Create what I call a values-based budget. Jazmin also advocates for a personalized budget that not only covers fixed expenses, but also aligns with your personal goals and values.
When you’re getting serious about paying off debt, you have to know what exactly you need to cover your expenses and what you can spend on discretionary items. And yes, you still deserve to have that “fun money!”
Being too strict with your money can backfire—and it’s not realistic. A goals-based budget can help you find the balance you need to stay on the debt payoff journey for the long haul.
- TIP: Develop a budget that includes allocations for your essential expenses, savings goals, and discretionary spending.
Confront financial trauma to move forward.
Jazmin shares how unaddressed financial trauma and shame kept her in a cycle of debt and poor spending habits. Recognizing and confronting these emotions was crucial for her financial transformation.
To start thinking about money views more critically, I often ask folks, “what is your first money memory?” It’s shocking how often this early memory indicates your future views on money.
Take a minute and think about this for yourself. See what kind of emotions come up for you.
Deep financial therapy will take time—but it’s totally worth it. You’re more likely to stay out of debt for good when you address the root issues.
- TIP: Reflect on any negative emotions or past experiences that may be affecting your present financial decisions. Consider speaking with a professional or trusted advisor to work through them.
Leverage support systems and accountability.
Defeating your debt can be a lonely journey, especially because our society takes a “blame and shame” attitude toward debt. It’s easy to feel like you’re the only one in this situation or that you’re better off not discussing it. But that means you have to do everything alone!
If you have a partner, work on your debt payoff together. If you don’t, look for a money community or accountability buddy.
Struggling to find that person in your life? Do a regular check-in with yourself (your personal money date is the perfect time) or share your progress in the free Financial Feminists Facebook group.
- TIP: Find a trusted person or community to share your financial goals with.
Handling debt is hard, but it is possible
Debt can be daunting, but examples like Jazmin show that you can get through it. Jazmin had SO many challenges in her life, and she still paid off more than $100,000 in debt.
To conquer financial challenges like debt, you have to believe it’s possible for you, too. You’re already taking steps to educate yourself on debt (good job!!), and I know you can follow it with the action you need.
Ready to feel good about your money?
For the first time EVER, I’m teaching ALL the strategies that have helped countless women save money, pay off debt, and grow their net worth (but really, feel happier, healthier, and more f*cking powerful).
In The $100K Club, you’ll get in-depth teaching from me, alongside every template I use to manage my own money, PLUS a community of champions to keep you accountable.
