A YouTube blogger who has scratched her way out of nearly $200,000 in debt in less than two years has revealed her secrets to becoming debt-free.
Aja Dang was in her early 30s when she had what she describes as an “aha” moment after being confronted with an unexpected vet bill that left her determined to get a handle on her finances.
The 36-year-old radically stripped down her lifestyle overnight, sacrificing travel to Europe with her girlfriends and meals while sticking to a strict budget.
In addition, she applied the “debt snowball” method, which encourages borrowers to pay off their loans in order of size – starting with the smallest first and working your way up.
The idea is that individuals build momentum over time and have the motivation to stick to their plan.
Aja Dang, 36, has radically stripped down her lifestyle overnight, sacrificing travel to Europe with her girlfriends and dining out while on a strict budget
Dang’s debt was largely on her student loans after she completed a bachelor’s degree in marketing from the University of San Francisco and a master’s degree in broadcast journalism from the University of Southern California.
Together they set her back $150,000, but by 2018 — eight years after she graduated — they had accrued $50,000 in interest.
The rest of her debt came from a car loan and credit cards.
But Dang said she denied her financial situation for most of her 20s before being shaken up when her one-year-old dog Luke had emergency surgery — for $5,000.
“I was faced with a situation where I either had to go into more debt or put my dog to sleep,” she told Dailymail.com.
“I never wanted to be in that position again.”
From there, she decided to start a YouTube series documenting her journey to paying off her loans — and holding herself “accountable.”
At that time, she was making $60,000 a year creating her content.
She immediately consulted online blogs about debt management and scrapped her budget – the biggest sacrifice being to stop eating out.
Her main expenses were $1,500 a month in rent. In addition, she budgets for a $200 gym membership, $200 in car payments, $700 in food, and $60 in gas.
And she kept one luxury — a once-a-month facial that would cost her $100.
She said, “It’s so important not to get all the fun out of your life or you won’t last.
“I always tell people to decide the things they don’t want to give up and then budget them.”
In addition, Dang also increased her income stream – initially by earning extra money from jobs like dog sitting and by selling her clothes on thrift sites like Poshmark.
And over time, her YouTube series gained immense popularity, increasing her net salary to more than $100,000.
Her top tips for others in debt is to never pay the minimum repayment amount on a loan — something she says will definitely keep you in debt for life.
By overpaying, she was able to tackle both the primary loan amount and the interest all at once.
Dang said she refused to give up her $100 monthly facials, adding that it was important to keep some fun in your lifestyle — no matter how much debt you have
At the time, she was making $60,000 a year creating content, but soon increased her income to over $100,000
She also recommends building an emergency fund from a young age. The goal, she says, is to have three to six months’ worth of spending in a high-yield savings account.
And she said it’s important to find a “community” of other people in debt to keep each other motivated. She generated her own through her social media networks.
Dang’s tips come as more Americans face financial hardship amid high inflation and broader economic uncertainty.
Data from the New York Federal Reserve showed that household debt increased by $148 billion to $17.05 trillion in the first three months of the year.
It marks a $2.9 trillion increase from late 2019 before the pandemic and subsequent economic turmoil put a strain on household budgets.
The problem has only been exacerbated by Biden’s debt-ceiling confrontation with Republicans in Congress, which could see the US default as early as June 1.
This week, experts urged households to make contingency preparations in case a default occurs.
Earlier, analysts warned that a default could cause mortgage and credit card payments to skyrocket and investment to plummet.