This article was reprinted with permission from NerdWallet.
NerdWallet interviews individuals about their journey to manage debt. These responses have been edited to be more concise and clear.
In 18 months, $201,060 was paid off
Karen Akpan was fired from her lucrative contract in clinical research. Sylvester Akpan, her husband, was unemployed and earned an estimated $50,000 per year through their travel blogs Instagram. However, this income was not enough to pay their $4,300 monthly mortgage payment or put a dent into their six-digit debt.
They made some bold moves.
The Akpans bought an RV and sold their house in 2020. They then focused their efforts on increasing their income through Instagram. They were able pay off their debt in less than a year.
Related: How Americans live the Nomadland lifestyle
Although the Akpans approach was unusual, it pointed to a hard-to-dispute truth: Lowering expenses and increasing income gives you more money to pay off debt.
We were all up to our necks
Karen says that after the job loss, it was hard to get by. We lived to pay the bills.
The Akpans had fallen behind on their mortgage payments and were relying on credit cards to pay the balance. Karen and Sylvester also owed over $90,000 in student loans, as well as $110,000 for their car and timeshare.
Karen and Sylvester, who had lived in the same house for four years with their son Aiden, sold it to pay off some of their non-student loan debts. They also paid $25,000 solar loans and $36,000 pool. They ended up with $20,000.
Karen claims that we literally spent our last dollar to purchase an RV on Facebook +2.26% Marketplace and then fix it up. It was a leap in faith. It was a leap of faith.
Aiden, who is 8 years old and was home-schooled, was happy to live in an RV. Karen said that he is living the dream. Sylvester was not an easy sell, but he eventually accepted. Karen says that Sylvester is now passionate about RVs.
Everything changed once the Akpans left, Karen says. Our relationship, our marriage and our family dynamic all improved. We made the best decisions ever by being in this small space and making it work for us.
Just recently, the money started to come in
The Akpans then focused on making more through their blog, TheMomTrotter.com and its Instagram account, which covers parenting, budget travel, homeschooling, and homeschooling. Karen had been blogging for around four years but had not made much money. She decided to create more engaging content.
Do not miss these 3 ways parents can save money for their children's future
Her rates were increased and brands began to reach out to her. Representatives from the YMCA asked her to promote their summer swim program on her Instagram. She then created content for the YMCA based on her personal experience and that my audience could relate too, she said.
This partnership has taken her to brands like National Geographic, Disney DIS and Nature Valley. Although the Akpans earned money through YouTube and freelance writing about 80% of their income was from branded Instagram content.
Remember how Karen and Sylvester made about $50,000 in income through their Instagram and blog in 2019?
Their brand earned a profit of almost $318,000.
Karen said that the money started to come in just as Karen stated. Sometimes, I don't even know how it happened.
Also, read: I have $250,000 in mortgage with 24 years remaining. Do I need to sell stocks in order to pay the mortgage off before I retire?
That money should have been invested in my name.
They used this income to pay off their student loans. They paid Sylvesters $40,000 balance and Karens $69,000 at the end of 2020.
Karen had her doubts, and she still has them. She says that I should have invested the money.
Karen said that she was only beginning to understand money when her family paid off their loan. She now knows more and would have placed a lot of her earnings in a brokerage account, while still making regular loan payments.
It is difficult to decide whether to repay student loans or invest. It is worth comparing your loan interest rates with what an investment would make, among other factors.
I am now championing everyone
The Akpans make a living on Instagram, homeschooling, and local travel in their RV. They spent the winter months in Florida, and they have been making their way up the East Coast since then. (In July, Karen and her family were in Maryland when NerdWallet reached out to Karen.
They also travel internationally at least once per month depending on how cheap they can get tickets. The next big trip for them is to Kenya.
You might also like: Tracking your spending was a wake up call: This couple paid off $71k in debt over 5 years
They are still working to pay down their debt. They paid off the $6,500 car loan last summer. They also paid $18,103 on their timeshare, and $5,527 to the IRS. They are now negotiating the amount they will pay off their credit card debt.
Karen regrets not having invested last winter but she and her family are making every effort to do so now in order to plan for the future. Sylvester and Karen regularly contribute to brokerage accounts as well as Roth IRAs and 401(k). Aiden, who also has his own custodial IRA, is also on the payroll.
Aiden gets more than just retirement savings. He also receives intel. At 14 years old, his mother left Cameroon to move to the U.S.A. on her own. She didn't have any opportunity to learn personal finance as she lived with extended family. She is making sure that her son is well-informed. Karen could easily explain to you what an index fund is if you asked him.
How to get rid of your debt
A large portion of household budgets is spent on housing. Karen explains that her family was once house poor. Karen recommends looking at ways to reduce housing costs. For example, could siblings be allowed to share a room in a smaller house? Is there an area that is more affordable?
Read more: This financial advisor helps people recover from difficult times. She understands what it is like
Some people will not be able to reduce their income or increase it. These strategies may be a good option if you are struggling with debt.
Debt snowball: Pay off the smallest amount of your debt first, while also paying down any other debts. Next, move on to the next smallest debt.
Pay off the smallest amount of debt first, and then pay the minimum on all other debts. Next, move on to the next smallest debt. Debt avalanche - Pay off the highest interest debt first, while only paying the minimum on the rest. Pay the debt at the next highest rate.
An emergency fund will help you avoid taking on additional debt in the event of an unexpected expense. Start with $500 in savings. You should aim to contribute regularly to your savings account so you can cover three to six months of living expenses.
Karen offers one last tip for dealing with the ups and downs in paying off debt. She says: Have grace and take it slow. Take what you can and be kind to yourself.
Laura McMullen writes for NerdWallet. Email: email@example.com. Twitter: @lauraemcmullen.