A few weeks ago, we shared with you how David Bakke, a financial contributor for MoneyCrashers.com, managed to get out of $30,000 in debt. Today, we bring you the story of Ja’Net Adams, author of the book Debt Sucks. She was able to pay off a whopping $50,000 in debt in a little over two years. Here’s a peek into our conversation.
Black Enterprise.com: How did you get out of $50,000 worth of debt?
Ja’Net Adams: It all started with the “Dream Sheet.â€ My husband and I sat down at the table and filled out our “Dream Sheet,” which is basically our short (6 to 12 months), intermediate (3 to 5 years), and long-term (10 to 15 years) goals. Once the dream sheet was complete, I had it laminated and placed it on our refrigerator as a constant reminder. I started to track my expenses for two weeks. I started on the first of the month because I knew that between the 1st and the 15th, the major bills would come due and I could track them. For two weeks anything that took money out of our pockets was tracked: gas, groceries, eating out—even a pack of gum. After two weeks, we sat down and calculated what we were spending in every area. Tracking our expenses helped us create a solid spending plan.
BlackEnterprise.com: What are some things you cut back on?
Adams: Once the spending was down on paper, I saw there was still not enough money to aggressively pay off the $50,000, so we started cutting back and cutting out! First, we looked out our cell phone plans. We saw we were not using all of our minutes or data, so we cut back and ended up saving $80 to $100 between the two phones. The next item on the list was cable. That is when I realized no one can view hundreds of channels at one time, so I switched to basic cable, which saved us $80 a month.
BlackEnterprise.com: What wasÂ your largest expense?
Adams: Our biggest expense that we cut completely out was eating out. We were spending close to $250 a month eating out. By eliminating that expense, we saved $150 a month. Cutting those three expenses saved us nearly $330 a month and we used that to pay off debt.
BlackEnterprise.com: What are some unconventional steps you took to pay off debt?
Adams: I started selling items. I took three televisions to the pawn shop and sold them. Then I took wedding gifts that we were not using and sold them at pawn shops and to people that would buy them. I also took damaged gold and sold it to a jewelry shop because at the time, and even today, consumers can get a great return for selling their gold. These strategies helped us pay off the debt quickly.
Stay tuned for part two of this interview.