3 debt repayment strategies that worked after being laid off
- When Ja’Net Adams was laid off, she used that time to clarify her financial goals.
- Adams then tracked every penny and built lasting habits to help him pay off $50,000 in debt.
- This article is part of the “Better, Smarter, Faster” series focusing on the impactful choices you can make with your money to achieve big life goals.
After being laid off from her full-time job in pharmaceutical sales in the early 2000s, Ja’Net (pronounced juh nay) Adams took a hard look at his family’s finances.
She soon realized that her husband’s $25,000 student loan and high-interest car loan were preventing her family from achieving their financial goals.
“He didn’t even know he had $25,000 in student loan debt after a year of college,” Adams, CEO of Debt Sucks University and mother of two, told Insider. “He thought he got a four-year basketball scholarship, but since we’re both first-generation college students, we didn’t understand the things we were signing.”
The couple worked together to pay off $50,000 in debt in just two years. Their journey sparked in Adams, now 40, a lifelong passion for teaching personal finance to people who feel like they’re going to be in debt for the rest of their lives.
Here are three strategies Adams used to get out of debt.
1. She started with a “dream sheet”
Adams suggests people create a “dream sheet” and write down a list of short-term (six to 12 months), intermediate (three to five years), and long-term (10 to 15 years) goals.
“The day I got fired, I said, ‘I don’t ever want to feel like this again,'” Adams said. “The dream sheet kept me focused whenever something happened with the car, or whenever there was an emergency.” Instead of panicking about money, Adams was able to stay grounded and focused on her future goals.
His original dream sheet mentioned a trip to Europe with his family under intermediate goals. Since then, Adams has taken his family on trips to Costa Rica and visited Barcelona, Paris and London.
2. She tracked every penny and cut her spending
The first four months of layoff “was just survival mode,” Adams says. She tracked every penny her family spent so she could cut back on discretionary spending like dining out and shopping.
“In one phone call, we lost 60% of our income, a car, our health insurance, and we also had a one-year-old child at home,” she says. She needed to get some insight into her family’s drinking habits to figure out what she didn’t need. She was also able to save an additional $400 per month by reducing her cable and cell phone service and her home insurance.
Because Adams worked as a pharmaceutical sales rep, she and her family had a premium health insurance plan as part of her benefits package. After being laid off, Adams enrolled her family in Obamacare for free health insurance to cut costs.
3. She got back to work as soon as possible
“We kept our one-year-old at daycare because I needed to look for work,” she says. Adams soon found another job selling pharmaceuticals, starting with a base salary of $45,000 plus bonuses, which amounted to about $65,000 a year. Soon after, she took on a new role that was bringing in $65,000 a year plus bonuses.
Since her bonus structure was based on the amount of her sales, she became more assertive in closing deals. It helped her increase her income, spend more money on paying off her debts, and open a savings account for her son, a short-term goal on her dream sheet.