Aja Dang is not shy about her $200,000 debt payoff journey. In fact, chronicling her monthly budget and progress along the way to her 450,000+ YouTube subscribers was what helped her pay off the six-figure debt in just two years.
After years of ignoring her debt, Dang decided in November 2017 that it was finally time to address it when she couldn’t afford surgery to help her sick dog.
Dang’s debt load included outstanding credit card balances, a car loan and undergraduate and graduate student loans that made up the bulk of the $200,000. Once Dang realized that she wanted to address her debt, she immediately tackled the smaller items. She paid off her credit card balances in one night, which she estimates was around $1,200, and paid off her car by February 2018. The rest of the time was spent paying off student loans.
While Dang’s journey to paying off her student loan debt was accelerated thanks to the sizeable income she made as she gained traction as a social media influencer, she has some insight that can apply to anyone trying to tackle their debt.
Below, Dang shares with CNBC Select her number-one rule when paying off debt, plus three tips for becoming debt-free.
Dang’s No. 1 rule when paying off your debt
Whether you have a short or long debt payoff road ahead of you, Dang’s number-one rule is to find your community.
“Paying off debt is really, really hard and can be isolating, but there are a lot of people going through it,” Dang tells CNBC Select. “If it wasn’t for my YouTube community, I would’ve given up.”
Though Dang started her YouTube channel filming more lifestyle-type content, it was a December 2017 video where she revealed her large student loan debt that caught a lot of viewers’ attention. She received comments like, “Feel your pain on the student loans,” “I didn’t realize what I was signing up for when I signed up for student loans in undergrad either” and “Someone finally discuses this on YouTube!”
This feedback helped her realize that many people could relate to her situation and inspired her to document how she was going to pay her loans off.
Paying off debt will likely entail cutting back on things like traveling or dining out with friends, so it helps to be able to talk to others who understand what you are going through. “Be around a community of people who can continue to encourage you and remind you how far you’ve come,” Dang says.
You don’t need to go far nor pay much to find support. Online personal finance groups like Bravely and the Financial Common Cents Facebook group are free and help you find others in the same boat.
Learn more: 5 online personal finance communities that will help you get better with money
Tip 1: Budget and track everything
Dang stills keeps a budget now that she’s debt-free. She breaks down the details of it on her YouTube channel.
“When I first started, I didn’t fully understand how much I was really spending on stuff,” Dang says. “You really can’t commit to paying off debt if you don’t know where your money is going.”
To start, Dang first read Dave Ramsey’s “The Total Money Makeover” after a friend suggested it.
Feeling motivated, she then created an Excel spreadsheet to act as her budget template. The spreadsheet included a monthly recap of things like her income, expenses and outstanding student loan debt. When Dang first started out, she went through four months of bank statements and divided up everything she spent her money on into separate sections, such as food (restaurants, groceries, delivery), her dog and living expenses. She then calculated how much she spent in each category per month on average and created target spending goals to lower her expenses and put those savings toward her student loans.
Learn more: How to create a budget in 5 steps
Beyond her monthly budget spreadsheets, Dang tracked her everyday spending through mobile personal finance apps like Qapital, as well as in a planner. Each night, she would make a routine of writing down her daily expenses from that day. This helped her visually see how much money she had spent and on what. It also helped her realize her needs versus her wants. She learned to cut out any expenses she made constantly that she could easily get rid of, such as Postmates food delivery.
Tip 2: Try a side hustle or two
Before Dang made it big enough on YouTube, bringing in majority of her revenue through brand deals, her debt payoff plan included side hustling during her free time.
She did everything from dog sitting and dog walking via Rover.com, selling clothing and beauty products on Poshmark and random jobs through TaskRabbit, like assistant work, editing videos and transcribing audio.
Side hustling is a good way to supplement your income so you can make a big dent in your debt.
When choosing the right side hustle for you, first decide how much extra time you have. Then, think of things you like. For example, if you like to organize and clean, you can organize and clean people’s homes or closets. If you like to fix up things, buy from secondhand stores to make new and resell. Looking at the on-demand apps you already use on your phone may help spur some ideas for side hustles or gig-type work.
Learn more: 5 easy ways to earn extra money from your couch
Tip 3: Treat yourself
Dang didn’t want to commit to not spending money on things that made her happy. “I tried that and almost gave up,” she says. So, she decided to reward herself along the way of her debt payoff journey.
Whether it be a nice dinner out or a self-care manicure/pedicure, Dang found success in these mini treats. They motivated her to continue paying off her debt until she reached the big end goal.
Saving up for those small rewards helped her emotionally and kept her excited to accomplish her larger goals, she says.
As long as the expense doesn’t set you back on paying off your debt, it’s worth treating yourself. To help you save up for these small rewards along the way, create a separate savings fund and schedule a small automatic transfer each month so you don’t even need to think about it.
Dang’s influencer income from her brand sponsorship deals played a big part in her paying off 6-figure debt in such little time. Along the way, however, the tips outlined above helped her and can apply to anyone trying to get rid of their own debt. Focus on bringing in more income with the skills and resources you’ve got. Then, trim the budget and find ways to stay motivated that work for you.
No matter if it takes you two years or 10 years (or even longer), the goal is to establish some good debt payoff habits, such as finding a community, making a budget, tracking your expenses, side hustling and treating yourself, that can help you progress.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.