Hey! I’m Claudia Pennington, a digital marketing consultant and personal finance blogger over at TwoCupHouse.com where I’ve been writing about the journey to debt freedom and financial independence.
Our personal finance journey began in early 2015 when we were living paycheck to paycheck. We had some money saved in our respective retirement accounts, but we struggled to keep money in our savings and checking accounts. Every dollar we made, we spent (and then some). We had a credit card balance, a mortgage, and student loans.
We tried for years to get ahead of our money, but nothing stuck. We’d attempt to get out of debt, but then summer would roll around and we’d use credit cards to fund home improvement.
After taking a hard look at our spending, we realized that the real problem we had was that we lacked goals for ourselves. Because we lacked goals, we spent money without consideration for what the money was helping us (or not helping us) achieve.
In spring 2015, we started searching online for tips on getting out of debt. We stumbled on a community of personal finance bloggers who share their stories and tips for getting out of debt. We also found another community of personal finance bloggers who seek financial independence. We were hooked!
To achieve debt freedom, we focused on increasing our income as quickly as possible. Garrett’s performanced-based compensation motivated him to focus on his best customers generating more revenue in his territory. I found a full-time job that leveraged my skills and experience in digital marketing and search engine optimization (SEO).
In addition to those employment opportunities, we started a side hustle in digital marketing and SEO. Within a couple of weeks, we had our first client. I negotiated performance-based compensation in addition to an hourly rate for our consulting work.
While in the midst of the hustle, we put our 1,500 sqft house on the market. We didn’t particularly love this house and we didn’t want to be saddled with its six-figure mortgage. Having a big house required a regular infusion of capital and time to address its many maintenance needs.
Side hustle compensation continued to grow (and so did the income from our W-2 jobs), so we had an income snowball forming. The more effort we put into our day jobs and our side hustle, the more money we made, and the more debt we paid off. Within seven months, we grossed enough from our side hustle to pay off our credit card debt. We also paid off a couple of high-interest student loans.
Around the time we crushed our credit card debt, we moved into a 500 sqft home. With the side hustle income and the money we saved by downsizing, we paid off the $70k mortgage on the 500 sqft home about one year after we moved in.
At the start of our journey in 2015, we had $204,971.31 in debt, which included the original mortgage, student loan debt, and a credit card balance. With the small house mortgage, our debt ballooned to $240,352.35 in November 2015.
As of November 2016, our debt was down to $24,495.32, a decrease of about 89% in one year.
Today, our debt balance is about $10,000. We have just one student loan remaining. At 4.25%, the interest rate on this single student loan is high enough to be annoying, but low enough that one could make an argument for paying the minimum payment. But we committed to 100% debt freedom, which we anticipate achieving next month.
Once we’re debt free, we’re taking full advantage of all investment accounts at our disposal. We’re also saving for the real estate we plan to purchase in 2018. Because we’re nearly debt free and living in a smaller home, we have more time and money available to craft the financially-independent lifestyle we seek.
To put us another step closer to financial independence, we’re laser focused on increasing our income. As a digital marketing consultant, my compensation is three to four times higher than the salary from my full-time job. Once our side hustle income replaced 75% of my salary in September 2016, I quit my job.
Today, I gross more than I did at my full-time job in just one-third the time. Leaving my full-time job has given me more time to focus on the digital marketing training courses we created. We turned our side hustle into Side Hustle, LLC, a digital marketing consulting and training business.
While there are dozens of reasons why we created a business, our focus is helping thousands of aspiring side hustlers become digital marketing consultants who make at least $75 per hour. We formed a business out of a desire to help others use a side hustle in digital marketing to achieve their financial goals.
If you’re ready to start a side hustle, sign up for the free email course to learn more about what it means to be a Digital Marketing & SEO Consultant.