Greetings from sunny Jamaica! While I’m away on holiday, fellow personal finance author Vangile Makwakwa is here on the blog to share her inspiring story of suitcase entrepreneurship and seriously rockstar debt pay off. Enjoy!
In the past 5 years I’ve paid off $60,000 in debt, moved from Boston, MA back to South Africa, bought my own property and entered a new phase of life as a suitcase entrepreneur. I’m currently in Goa, India.
But before all that, there was this…
What will your life look like 12 months from now if you keep making the same financial decisions and doing the same things?
I asked myself this exact question 5 years ago.
I was $60,000 in debt, depressed, my credit was a mess, I hadn’t made a penny in over a year, I was living on friends’ and family’s generosity and secretly struggling with panic attacks.
I’d even stopped answering calls from numbers I didn’t recognize in case they were from a debt collector!
I was desperate. My answer to the question was scary – if I couldn’t change my finances I didn’t want my life!
That was my wakeup call to go on a financial journey of mega proportions…
I moved back home for emotional support.
I moved away from home at age 17. So my decision to move back to my mom’s house in South Africa from Boston was hard – and counter intuitive because of the exchange rate. I used a lower currency to pay off debt in a higher currency.
The decision was purely emotional. My failed entrepreneurial ventures had destroyed my self-esteem and I knew moving back home would help me heal.
I started dealing with how I felt about money.
Every time I saw my bank statements I’d have a panic attack and sink deeper into depression, which held me back financially.
So I started paying attention to how I felt about money. I studied behavioral finance thesis’, I researched emotions, I started meditating, I did yoga to keep calm and I taught myself how to be emotionally intelligent with money – all of which eventually led to my current company and a publishing deal for my book Heart, Mind & Money.
I asked for help.
As soon as I made my decision to change my finances, I started working with a life coach to help me release my fear and hatred of money. I also hired a financial advisor to help me with practical money matters, including starting an investment portfolio.
Budgets became my best friend.
I kept a budget of every single penny that went into and out of my bank account. This allowed me to see how I was spending money and how much money I needed to make every month to start meeting my financial goals.
I prioritized my expenditures.
I made a list of all my values and let my values inform my spending behavior.
For example, one of my values is traveling, so it doesn’t make sense for me to spend money on an expensive car when I can use that money to buy a plane ticket instead.
I got a job and created an extra stream of income.
Part of why I was in debt was because my businesses had failed and I’d used credit cards to pay personal and business expenses. I made the tough decision to shut down my business and get a job.
My life coach trained me as a coach, I wrote and published a book and I began building a business around my personal financial journey. My book got media attention and launched my career as a speaker, which allowed me to live off the salary from my job and use all the extra income from speaking to pay off my debts.
I created a spreadsheet of everyone I owed money to.
My credit was so bad that most of my debts, including Sallie Mae student loans, were with debt collection companies. I figured people would just be happy to finally get something from me, so I negotiated with everyone. Most creditors allowed me to pay half or even a quarter of my debt if I paid within a set time period.
I had to sacrifice lots of things along the way to make the deadlines, but it was worth it.
Related: How to Pay Off Student Loans
I paid off the smallest debt first.
I focused on paying off the smallest debt first, as soon as I finished with that, I moved onto the next one and so on. The less debt I had, the less frustrated, angry and overwhelmed I felt, and the more motivated I was to keep focused on my goal.
I started saving and investing for retirement and fun stuff!
My savings enabled me to embark on this new phase of my life as a suitcase entrepreneur, (which has its own unique financial challenges, but is also really fulfilling).
I also bought an apartment which I rent out to a tenant as I travel, so I have a place to return to when I decide to settle down.
Becoming debt free didn’t happen overnight and there were times when it felt like all I lived for was paying off debt, but now that I’ve done it, I can truly say it’s worth it. So if you’re on the journey, don’t lose heart!
Vangile Makwakwa is a personal finance blogger, speaker and author. Click here to get a free copy of her 12 Keys to Wealthy Money eBook.