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Debt-Free After Divorce: How This Single Mom Paid Off $17K in Debt, Saved $24K & Turned Her Finances Around
This client case study is a big ol’ Debt Payoff Success Story!!! Sometimes paying off debt is not necessarily the goal, but in their case it was SUCH a big part of their story. You can listen to them tell it here:
149 | Debt-Free After Divorce: How This Single Mom Paid Off $17K in Debt, Saved $24K & Turned Her Finances Around – Financial Coaching for Women: How To Budget, Manage Money, Pay Off Debt, Save Money, Paycheck Plans
Key Stats On Where She Started:
- Location: Florida Panhandle
- Income: $3,600 per month, a single-income mom.
- Three children.
- Held 11 debts, including credit cards, vehicle loans and a second mortgage.
- Savings: $1,000.
- Debt minimum payments: $5,091.
- Total debt: $17,591
- In the middle of a divorce.
- Never really knew how to organize her money.
- Spent her Saturday mornings on the porch with her coffee stressed about how to pay the bills.
- She was an office assistant with a small cake pop side hustle.
- Zero child support coming in and zero help from her ex-husband with kids sports/activities.
Strategies and Systems She Used:
- Seven months of coaching to get the guidance and support she needed to tackle her financial challenges effectively.
- She proactively called collection companies to negotiate early payoff amounts, taking advantage of settlement options to reduce her debt.
- She diligently checked her credit report monthly, which allowed her to track the progress of her debts being resolved and items falling off her report.
- Instead of splurging her tax return, she used it to pay off credit card debt, accelerating her journey to financial freedom.
- She reorganized her accounts, changing the names and structures to help manage her income, bills, and spending more efficiently.
- She sold assets she no longer needed, like a car, to generate additional funds to put toward her financial goals.
- After paying off her credit cards, she closed them to avoid accumulating more debt and maintain better financial control.
- She got new insurance quotes to ensure she had the most cost-effective coverage suitable for her new circumstances.
- She shopped around for a bank that aligned with her financial system, ensuring her accounts supported the strategies she learned during coaching.
- She navigated the complex process of separating joint finances, including mortgages, car loans, and bank accounts, to establish her financial independence.
- She actively engaged her children in the budgeting process, explaining the family’s financial situation and making necessary adjustments together.
Where they were when they graduated coaching:
- Debt-Free: She successfully paid off all her debts (from 11 to 0!) including credit cards and collections, eliminating financial burdens and stress.
- Increased Savings: Her savings grew substantially, going from $1,000 to $24,000, providing a financial safety net for her sweet & amazing family.
- Reduced Monthly Expenses: Her monthly minimum payments went from $5091 to $0!!! By eliminating most of her monthly minimum payments, she significantly reduced her monthly financial obligations.
- Financial Independence: She established financial independence as a single mother, managing her finances effectively and providing for her family.
- Empowered Budgeting: She gained the knowledge and skills to create and stick to a budget, ensuring her money was used wisely and intentionally.
- Improved Credit: Through diligent efforts, her credit score improved as negative items fell off her credit report, opening up opportunities for better financial products in the future.
- Streamlined Finances: She restructured her accounts and financial systems to simplify her money management, making it more efficient and less stressful.
- No More Saturday Coffee Money Stress: With her financial situation stabilized, she experienced reduced stress and anxiety about money, allowing her to enjoy a better quality of life.
- Positive Family Impact: Her children also benefited from her improved financial literacy, learning valuable money management skills from their mother.
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