Recently I launched a new interview series highlighting people who have made remarkable changes in their lives. The first interview featured JP Livingston, who retired at 28 with a net worth exceeding $2 million. This post profiles Aja McClanahan, who made significant sacrifices to pay off $120,000 in debt.
In this interview you will learn:
- How she eliminated her debt
- How she maintained disciplined progress
- The sacrifices she made to become debt free
- Her advice for people who feel they have no money to start paying off debt
- How she increased her income to accelerate repayment
- What she would do differently, and more
Aja’s article, “Hood Rich — How Living in the Hood Saved Our Finances,” drew me in. She writes: “We live in ‘Da ‘Hood.’ Corner stores, kids out late at night, gunshots, alley mechanics and all the realities of hood life. This is where our home is located. A home on the next block is selling for $2,500.”
Yes — she and her family paid off over $120,000 in non-mortgage debt while raising children. That achievement made her a perfect fit for this series: eliminating six figures of debt while parenting is no small feat.
Below are reader-submitted questions (and some of mine) about how she paid off debt. Follow the Facebook page to submit questions for future interviews.
Here’s how Aja and her family paid off $120,000 in debt and achieved financial freedom. You can follow her blog Principles of Increase for more details.
1. Tell me your story. How much debt did you have and what was it from?
Aja: I grew up in the Chicago suburbs and married my high school sweetheart at 24. Before marriage we attempted to compile a complete picture of our debts to establish a budget, but we underestimated student loans by roughly $20,000.
After marrying, we began receiving notices and calls about outstanding balances while living on one income. Shortly after, our first child was born and I wanted to stay home with her. To make it work we committed to two things: pay off debt and increase our income with flexible or home-based work.
When we totaled everything, we had about $60,000 in student loans between us. Later we borrowed $30,000 for a luxury SUV, and I accumulated roughly $30,000 in debt from an early business attempt. That added to about $120,000 in debt — and we didn’t even own a home.
We decided to pay it all off no matter what. Through increasing income and trimming expenses, we reached total debt freedom in 2013.
2. Why did you want to get out of debt quickly? What was your turning point?
Aja: The turning point was when my husband’s paychecks were garnished — about $700 a month. Debt controlled nearly everything we did. There was no money to travel, enjoy life with our children, or invest for the future. Debt felt like our boss.
The birth of our first child changed our priorities. We wanted to give our children as much attention as possible and raise them to be financially wise, creative, and industrious. Working both full-time while servicing large debt would have made that virtually impossible, so we committed to eliminating the debt.
3. How long did it take to become debt free?
Aja: That’s hard to pin down because we made progress, then sometimes took on new balances, and then refocused. Around 2008 we started seriously attacking the debt and by then had about $100,000 left of the total. In December 2013 we paid the final bill — my husband’s student loan — and it was the most exhilarating feeling.
4. How did you maintain consistent discipline?
Aja: It was extremely difficult. I watched friends and family enjoy life while we made sacrifices: moving in with relatives, driving older cars, and declining social invitations that weren’t in the budget. Two things helped. First, we kept our family vision front and center with vision boards reminding us why we were making sacrifices — debt freedom, travel, owning investments.
Second, I plugged into a community of people on the same path. I listened to the Dave Ramsey podcast while working from home; the “debt-free screams” motivated me and helped me put in extra hours. Finding inspiration and community made discipline easier to maintain.
5. Should I pay off debt first or start investing? What influenced your decision?
Aja: It depends on your situation and risk tolerance. We chose debt freedom for peace of mind. While I wish we had saved more earlier — because time in the market is powerful — living on a very thin margin with little savings made debt freedom a way to reduce the risk of a financial crisis.
We accepted that we missed investment gains during those early years, but we now actively invest and save. For us, the emotional and practical benefit of not owing money outweighed the potential higher returns from investing earlier.
6. What’s the best way to become debt free?
Aja: Start by finding your “why.” A clear purpose will help you through long or difficult journeys. Define goals and a vision for why debt freedom matters to you.
Then build a plan to support that vision. For us, Dave Ramsey’s Total Money Makeover provided a clear framework to create our customized debt-reduction strategy. We weren’t perfect, but we stuck to the plan and refused to quit.
7. What sacrifices did you have to make?
Aja: We made many financial sacrifices: canceling cable, eating out less, skipping travel and repairs. Once we even delayed fixing a vandalized air conditioner during a heat wave because paying debt took priority. Socially it could be isolating, turning down weddings or outings we couldn’t afford.
There were emotional sacrifices too. People questioned our choices, and some criticized our decision to move into the inner city as unsafe. Early on, we felt alone because few peers shared our goals. That has changed as we connected with the financial community.
8. What was it like moving into a bullet-riddled home in the inner city? How did you keep going?
Aja: It was frightening at first — sirens, barking dogs, and a level of noise that reminded us we’d moved far from suburban life. On the first night we wondered what we had done. But we were committed: we’d invested in renovations and moved in.
Rather than treating the house as merely a step toward debt freedom, we engaged with the local community. We made friends, participated in community causes, and found purpose. The neighborhood has improved over the years, and we’ve been part of that positive change.
9. How can someone start paying debt if they struggle to cover everyday bills?
Aja: Cut major expenses where possible — move in with relatives, take on roommates, or “house hack.” Be honest about wants versus needs. If you can’t reduce enough, work on increasing income. For us, adding income was transformative. With reduced expenses and more earnings, you can begin making progress.
Be creative and prepared to make sacrifices. It’s difficult but possible — the key is to start.
10. How did you increase income, and what didn’t work?
Aja: I began by selling items online. I experimented with buying toys wholesale to resell, which failed. I used a company I formed at 24 to do side work: Spanish tutoring, translation for hospitals, and marketing consulting. Over time I focused on database consulting, a fit for my business and tech background.
I ran that business from home with subcontractors, and at one point earned $10,000 a month. My advice: start somewhere, even with simple gigs like delivering pizzas. Doing anything will activate your “hustle muscle” and create opportunities until you find a fit.
11. Are your kids in sports? How do you afford activities on a budget?
Aja: My younger daughter joined a free baseball program and my older daughter has been in music programs and a free STEM/entrepreneurship program. When activities do require payment, the kids sometimes help cover costs. Because we are debt free, I can spend more time homeschooling and supporting their pursuits. Both children have earned money through TV appearances and voice-over work, which helps cover extracurriculars and other expenses.
12. If you could start over, what would you do differently?
Aja: I wouldn’t have taken on so much debt. In college I worked a lot and likely could have paid tuition instead of using loans and financial aid for non-essential spending. I also would have learned negotiation skills earlier; we paid some bills we later realized could have been negotiated or possibly not owed due to statute of limitations.
13. What’s the biggest lesson you learned about debt?
Aja: Debt can be a tool when used wisely, but society often uses it to fund consumer lifestyles, which leads to misuse. After paying off our debts, we were cautious about credit. Now we use a few credit cards responsibly and pay balances each month. If you can’t use credit responsibly, avoid it until you build the discipline. Saving and paying cash lets you avoid interest and maintain control. Debt places you on the lender’s terms; avoiding it gives you freedom.
Being debt free has made life far less stressful. We pay cash for cars, renovations, vacations, and major purchases — and we’re grateful for the freedom it provides.
14. What are your best tips for someone aiming for the same success?
Aja: Just start. Extra payments don’t have to be large — even $15 more per payment matters. Begin with a concrete action: pull your credit reports, apply for a part-time job, find a roommate, cut up credit cards, or read a debt-payoff book. Progress builds momentum and soon you’ll be driven by the results.
What other questions would you ask Aja about becoming debt free? Are you interested in a debt-free lifestyle?