For many moms, juggling child-rearing, work, and household management is tough enough without the added burden of debt. Yet debt is a reality for many. In fact, in 2023, the typical American held $21,800 in personal debt, not including mortgage loans. And women have almost two-thirds of the country's staggering $1.54 trillion educational debt.
Here, we explore innovative strategies some busy moms have used to manage and eliminate their debt, proving that a little creativity and determination can go a long way toward managing your personal finances.
1. Take on a side hustle
Once burdened by a whopping $30,000 in credit card debt, Chris Roy found herself reassessing her finances following a health scare. Realizing the precarious nature of her situation, Roy took action by engaging in family-friendly side hustles where her kids could tag along, like evening and weekend daycare, yard work, and gardening.
By incorporating her children into her financial journey, she not only reinforced valuable lessons about money but also made the extra work more enjoyable. Evening daycare provided consistent weekly income, and yard work and gardening allowed her to make extra money while her kids played nearby.
Working a side hustle is a powerful strategy for busy moms because it provides flexibility and an opportunity to earn additional income -- potentially without drastically compromising family time. Some other potential side hustles include freelancing, virtual assistant work, or selling handmade crafts online. Finding the right side hustle that fits seamlessly into your lifestyle can make debt repayment faster and less stressful.
2. Use a 0% interest balance transfer credit card
Credit card debt can feel insurmountable due to high interest rates, but savvy moms like Darcy Zalewski discovered a way to turn these financial tools to their advantage. Zalewski, who had $20,000 worth of debt, used 0% APR balance transfer cards to pay it off. Balance transfer credit cards allow debt to be moved over from a high-interest card to one with no interest, and the interest-free period can last a year or longer.
This approach requires discipline and strategic planning because balance transfer cards typically come with a balance transfer fee and a time-limited interest-free period. However, if used wisely, the 0% APR period can save significant money on interest payments and allow cardholders to pay down the principal balance faster. Moms considering this method should take care to:
- Compare balance transfer fees among different cards.
- Calculate whether the savings from the 0% APR period outweigh the fees.
- Make a plan to pay off the transferred balance before the promotional period ends.
By following these steps, moms like Zalewski can gain substantial relief from overwhelming interest charges on the path to becoming debt-free.
3. Simplify your bank accounts
Managing multiple accounts can be overwhelming and lead to missed payments, fees, and unnecessary stress. Zalewski streamlined her bank accounts to just one checking and one savings account and set up auto-scheduled payments to her credit cards to avoid late fees. This straightforward approach made it easier to keep track of her funds and reduced the risk of missing a payment.
Simplifying your banking can streamline your financial life and let you clearly see where every dollar is going. It can reveal spending patterns that could be adjusted to free up more funds for debt repayment. For example, Zalewski realized she was spending too much on subscription services and made cuts that boosted her debt repayments.
4. Try the debt snowball method
Both Chris Roy and Dyana King, who tackled $34,907 in debt, used the debt snowball method to quickly reduce the number of creditors they owed money to. The debt snowball method involves paying off smaller balances first to achieve quick wins, then moving on to the larger balances with renewed motivation.
The psychological benefits of this approach cannot be overstated. By paying off smaller debts first, moms feel a sense of accomplishment and are encouraged to tackle larger debts. King emphasizes the importance of patience and consistency, recognizing that escaping debt is a marathon, not a sprint.
5. Seek financial advice and support
Facing debt alone can be overwhelming, but by tapping into supportive communities and seeking financial advice, moms can find valuable guidance and motivation. Dyana King tapped into the power of social media to connect with others in similar situations and to maintain accountability. By sharing her journey online, she received support and inspired other moms facing similar challenges. Her platform (Money. Boss. Mama) has become a resource for single mothers seeking to take control of their financial futures.
Besides finding support online, consulting a financial advisor or coach can help you develop personalized debt management strategies. Zalewski sought advice from financial coaches and read books on personal finance to deepen her understanding of debt management. A professional can offer tailored advice on debt repayment strategies, budgeting, and investment opportunities, making it easier for busy moms to take control of their financial futures.
Getting out of debt is no easy feat, but as these incredible moms have shown, it's definitely doable with some smart tactics and solid support. Whether it's finding a family-friendly side hustle, simplifying finances, or seeking community support, every step toward debt elimination brings moms closer to financial freedom. Their journeys prove that a little creativity and determination can go a long way toward managing personal finances. So, as you work toward becoming debt-free, remember that every small victory counts and that financial freedom is within reach!
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