Side job helps chop 25-year payoff plan to 6 months

What do you do when you want to pay off your debt but you calculate it will take 25 years to do so on your current income?

Well, if you're Adrienne Dorison, you start a side business and start shoveling yourself out of debt faster!

Another reason to get out of debt

Before her income grew, though, she still had a large student loan when she started dating The One. She explains that he was a Dave Ramsey fan and, consequently, good with money. The thought of bringing debt into their marriage (now that they're engaged!) embarrassed her.

But her fiancé was supportive. When she told him of her debt, he said, “We can deal with that.”

Since Adrienne wanted the satisfaction of knowing she could eliminate her debt all by herself, how did he help her deal with it? He didn't pay her debt for her, but he made sure that outings together with friends and the like were scaled back enough to include her but not overstretch her budget. He was her accountability partner and cheerleader. He was a reminder and a support system to her.

How she paid off her student loans

At 29 years, Adrienne was starting out with a good income as a supply chain analyst for a large paper manufacturing corporation. However, she couldn't accept that it would take 25 years to repay her $45,000 student loan debt — so she started looking for alternatives.

To accelerate her loan repayment, she cut her expenses and increased her income. She was able to save close to 85 percent of her income and pour it into reducing her debt.

It wasn't easy, but she began to realize something:

“Your expenses reflect what you value — this realization makes your spending intentional.”

Once she got clear on what she valued, it fueled her: “I didn't eat out, and I didn't buy unnecessary things (clothes, knick knacks, and coffee) like I had previously. I switched my phone provider. I didn't have cable. I didn't travel.”

To increase her income — even though she still had debt — she decided to start a side business.

By using her experience and skills in business, leadership, technology/social media, networking, and communication, she started a leadership and personal development blog. This blog led organically into a coaching business. For seven months, she worked her day job and her side job at the same time. After seven months? It was time to say goodbye to the day job.

Bootstrapping a new business

Starting a business while in debt seems challenging, maybe even ill-advised. How did she find the extra money to get started when she was still trying to pay down her student loan?

Adrienne explains …

“I was bootstrapping in the beginning and, since it was a business that didn't need much capital, I got creative and did a lot of the work on my own. I created my own website on SquareSpace at first and sold some pieces of furniture and a TV to create the funds for some of the other systems I needed in place.”

Running a side business in addition to working a full-time day job requires careful planning and scheduling. To meet all her commitments, Adrienne started waking up at 4:30 am and moved her workouts to the morning. She did a little work before heading off to her day job. She also worked during her lunch break, after work, and on the weekends. “I worked a lot so that I could get out of the day job faster.”

Overcoming the challenges of starting a side business

Although working so much is not sustainable in the long term, Adrienne has some tips to keep focused on your goals:

  • Focus on the most important things
  • Take it day by day to prevent getting overwhelmed
  • Create a schedule that supports your energy — if you are exhausted when you get home at night, you may need to do your business work in the mornings, etc.

The benefits of a side job?

All her hard work paid off. Her student loan was gone in just six months. In seven months, she was able to quit her day job.

Would she recommend that others start a business (preferably without debt) to accelerate debt repayments? Yes!

Adrienne wants to help people become successful entrepreneurs. While entrepreneurship isn't for everyone, in some ways, it can supercharge your financial efforts. As she puts it …

“You can diversify your income, have a plan (you never know when a company is going to change/downsize, etc., and not need you anymore), learn to monetize your skills and VALUE your skills!”

Managing money as an entrepreneur

Adrienne's savings account is her emergency fund. While she was in debt-repayment mode, she kept about $1,000 on reserve.

But now that she is self-employed, her income varies wildly. To cushion her income uncertainty (now that she is out of debt), she is working to build up her emergency fund to six months' worth of expenses.

Her money management also extends beyond savings. She prioritizes her spending too. Her first priority is giving. Next, she meets her survival expenses, such as, shelter, food, and health insurance. Then, she saves money. Her fourth priority is business expenses. Making up the final expense is luxuries or extras.

While your spending priorities may be in a different order, having priorities (and sticking to them) can make a difference financially.

You can get out of debt too

Paying off her student loan so quickly was not easy and it required sacrifice. But her advice is to believe in yourself. You can do this!

Another thing that worked for Adrienne:

“Take some quiet time to really imagine how it feels to be out of debt and envision how it would feel not to have to make that payment. Try to step into the feeling of why and how it feels to do it. You don't have to live with debt forever.”

How would starting a business affect your financial situation? What kind of sacrifices would you consider making to improve your financial situation?

More about...Debt, Side Hustles

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My Factoring Network
My Factoring Network
4 years ago

Student loans are heavier on the burden of students. But payment of the student loans can become easy with the side job. It is correct to have a big savings to pay off the debt in future. Small business start ups through factoring finance is also one of the way to get financed by the lenders and start a small business according to the skills one possess. By a small business side by side, the income flow will be more to pay off your loan and debt easily.

Matt P
Matt P
4 years ago

Saving 85% of her income? How is that even possible? Was she living with her parents? Obviously didn’t live in California…

Whatever the case I’m definitely going to be thinking about a side job too.

Glorified Plumber
Glorified Plumber
4 years ago
Reply to  Matt P

Eh there are what, four or five definitions of “income” and “savings.”

Could easily be (401k + savings account + debt payment) / net.

Who KNOWS what metric was used…

Jeff
Jeff
4 years ago

Also “good income” is incredibly vague and make it harder to take articles like these that seriously. A “good” income in one part of the country could be “poor” in another and “very good” somewhere else.

Erin
Erin
4 years ago
Reply to  Jeff

yeah, my first thought was that if it would take her 25 years to pay off $45k, that doesn’t sound like a good income to me at all.

Another Beth
Another Beth
4 years ago
Reply to  Jeff

I *think* the 25 years might be if she paid just the minimum each month, if that is her standard payment plan that she’d agreed to. But how do you go from only having enough to pay the minimum, to saving 85% of your income?!? I thought the article was light on details, as it just says she stopped buying stuff and cut cable. I could stop buying all but the essentials, walk everywhere instead of drive, stop running the AC or heat (depending on the weather) and eat only beans and rice, but I still won’t save even close… Read more »

Adrienne Dorison
Adrienne Dorison
4 years ago
Reply to  Matt P

Hi Matt! Adrienne here!

No, I did not live with my parents, I lived on less. My rent was $400 at the time. And groceries were the next largest expense and I typically spent between 50-75/week on groceries.

Any other questions? Happy to answer.

ikomrad
ikomrad
4 years ago

I’m a Dave Ramsey fan as well, I listen to him for a few hours every day during my commute. If you really are a fan, then you should explain your experience by answer the questions he asks of everyone who does a debt free scream on his show. When and why did you decide to get out of debt? How much debt did you have and kind of debt was it? How much money were you making when you started? Did you sell anything to pay off debt? How and how much did you cut your lifestyle to have… Read more »

Adrienne Dorison
Adrienne Dorison
4 years ago
Reply to  ikomrad

Well I didn’t write the article haha and this isn’t Dave Ramsey, so that’s why I didn’t answer in this format! I am happy to answer those questions though! When and why did you decide to get out of debt? – I decided late last year (2014) that I wanted to get super aggressive and get it done as quickly as possible. How much debt did you have and kind of debt was it? 48,583 – all student loans How much money were you making when you started? $70,000/year (pretax) Did you sell anything to pay off debt? Yes –… Read more »

PJ Ryan
PJ Ryan
4 years ago

This is an awesome story! I am itching to leave the corporate world and reading stuff like this is extremely motivating. Kudos on keeping exercise a part of your routine. I need a kick in the pants for that.

lmoot
lmoot
4 years ago

That’s awesome. I do question though why it would have taken 25 years to pay off 45k on a good income.
While I’m sure the business helped out a lot, it seems that she was already on track for an early payoff just by reducing her expenses. Clearly she could afford to pay it off sooner, there just needed to be a rearranging of priorities. Just goes to show what the power of both reducing expenses and increasing income can do.

Bryan@Just One More Year
[email protected] One More Year
4 years ago

You touched upon a secret with this article: we all must do extra work outside of our jobs to accelerate our debt snowballs or achieve financial independence.

When we save only 5% – 10% of our incomes and spend the rest, we are destined to a long working career with an employer. Creating a passive income or side hustle has two benefits; first it is hard to spend your money when you are working all the time, and second you become less wasteful with your money since you have to work so hard to earn it.

Mike @ Tip Yourself
Mike @ Tip Yourself
4 years ago

Completely agree Bryan! If we always look at savings as just something we “have” to do, we tend to do the bare minimum. Saving is investing in yourself. It’s buying freedom!

Jake Green
Jake Green
4 years ago

Hey Adrienne,
You have a lot of drive when it comes to reaching a goal. Not many people can say they were able to start business WHILE still and debt. The fact that you didn’t give up and that your business has flourished is an amazing accomplishment. I hope everything goes well for you from here on out! and good luck with your marriage also.

Amy
Amy
4 years ago

What business did you start? Kudos on your effort and the end results but….this is vague enough to fall into the realm of a fluff piece.

Glorified Plumber
Glorified Plumber
4 years ago

Great article on what happened, but so much of her plan/execution just rubs me the wrong way and seems like very poor financial planning to me. I understand some people hate debt, but, her ability to work as hard as she did with what I can only presume is a lot of support the article did not mention, is way out of the median. If this was a normal average person in her situation, I feel like “Follow the path of Adrienne” would be horrible advice. As well, is this about paying off debt or starting a side business? She… Read more »

Jeff
Jeff
4 years ago

“So, figure she makes somewhere between 55k and 65k as an assumption. 45k debt is quite a bit, but is everything short of an emergency for a 55k to 65k salary.”

And I don’t see how she was saving 85% of that, unless she was living somewhere rent-free (or with fiance), an already paid off car (or none) and few other expenses. I make more than that range and yet my mandatory expenses for food, housing, student loan, utilities, etc easily eat 30-40% of my salary.

Glorified Plumber
Glorified Plumber
4 years ago
Reply to  Jeff

I agree! It make sense if her debt reduction is counted as savings (fair in my opinion), her side gig makes beaucoup bucks (possible), and her expenses are low because her fiance is covering major things like rent, food, bills, etc. (highly possible).

Definitely a pet peeve to see “savings rate” tossed about without some verbiage towards the flavor of savings rate.

Erin
Erin
4 years ago
Reply to  Jeff

Well I think the 85% figure was the amount of her combined salary + side-hustle income. So if she made $55—$65k at her main job and say $40k at her side hustle (we’ve got to assume it was doing very well if she was able to quit her other job), for a total income of $95—105k, that leaves her living on around $15k/year. That’s super tough, but not anything like living on the $8250—$9750/year she’d have to do without the side hustle. Of course this is all supposition, and like you I really wish they’d gotten into the weeds of… Read more »

Chella
Chella
4 years ago

I’m inspired to go on with that I am currently doing. I started this freelance writing business in 2010 while I’m already at my 15th year in the corporate world. I am planning to retire soon but thanks to this story.

Jerry
Jerry
4 years ago

Wow, I’d be onboard for a side gig too if I could successfully charge $6K a person for coaching sessions…

Pam G
Pam G
4 years ago

Congratulations! You worked hard. Great job on becoming debt free and starting your own business. Regardless of the exact numbers, etc, you worked your way out of debt and started your own business with the resources you had. Your story is an inspiration 🙂 Thanks for the article.

KW
KW
4 years ago

It makes me sad that someone can come out of college and be $45K in debt- and that’s not an outrageous amount by any means. As a society, we once invested in our citizens by subsidizing education. Those benefits went to everyone. What could this person have done with some or all of this money if she hadn’t had this debt? This is why Millenials are complaining so loudly about their ability to buy a home or start a family… that their adult lives are so delayed (and I am not a millenial. I was also lucky enough to not… Read more »

Mom of five
Mom of five
4 years ago
Reply to  KW

Oops – I meant my number 20 as a response here.

Kassy
Kassy
4 years ago
Reply to  KW

Part of the reason school is so expensive now is that it IS subsidized with relatively cheap loans and grants.
If you had to fork over $15,000 of your or your parents actual money every semester instead of just signing a piece of paper saying you’ll pay $459/month for 25 years most would be a little more picky in their college shopping.

Mom of five
Mom of five
4 years ago

We still subsidize education plenty in this country. Our oldest just went off to college last month. She’ll graduate debt free. She had lots of affordable options – one of them would’ve been completely free and two schools would have only charged us room and board. Our daughter’s dream was to study languages at Georgetown. We don’t qualify for meaningful financial aid anywhere, top schools only give need based aid (i.e. no merit), and we can’t afford 60k+ per year. Not without incurring massive debt. That took Georgetown off the table for her so she went to a plan B… Read more »

KW
KW
4 years ago
Reply to  Mom of five

I’m amazed that more than one person here seems to think that this explains all of it. I’m sure there are some young people here and there who pay no attention to cost to chase their dream college experience for which this explains their debt, but certainly not all. My husband and I do not have kids of our own, but we are looking at helping with college costs for our teenage niece and nephew, and just TUITION at the state school I attended has more than quadrupled in the fifteen years since I graduated. MORE THAN QUADRUPLED. And that… Read more »

red
red
4 years ago

side jobs are also help some unemployment. They may consider side jobs when they have no real jobs.

Evangeline
Evangeline
4 years ago

Save more, earn more, spend less isn’t exactly new information. Where are the specifics that would make this more useful? This reads like a pep talk. Yippee.

Adrienne Dorison
Adrienne Dorison
4 years ago

Hey everyone! It’s challenging to comment on every response in this feed just because of the way the system is set up – but I’ll try to address some of these things since people seem to be upset about it. What strategies and tactics are you looking for specifically? I never mentioned that my debt was an emergency – for me personally the greater urgency was getting out of a day job that I no longer enjoyed. And I wanted to do that as quickly as possible. I knew that I didn’t want to leave the day job without having… Read more »

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