I Paid Off $300K in Debt and Became a Self-Made Millionaire by 37: 6 Steps That Got Me There

Jen Yuson Photography / Bernadette Joy

Bernadette Joy, money coach and founder of Crush Your Money Goals, was $300,000 in debt when she decided she needed to make a change in how she was handling her finances. The six-figure debt had accumulated over the years thanks to a combination of student loans, two mortgages and credit card debt.

“It was in 2016 that I realized that I had all of this [debt] and no game plan,” she said. “What particularly triggered the change in my personal finance strategy was graduating with $72,000 in student loans from my master’s program, and realizing that most of my friends who had student loans had a 10- or 20-year plan for it. I was like, ‘Oh no, I definitely don’t want that.'”

So Joy made a plan to pay off her debt — which she was able to do in just three years — and then upped her investing strategy to accumulate $1 million in assets by age 37. Here are the exact steps she took to get there.

Break Big Goals Down Into Smaller Ones

When Joy made the decision to pay off her debts, she didn’t know how she was going to do it, so the first thing she did was break her big goal down into smaller, more manageable goals. Joy first focused on paying off her $72,000 in student loans, which she wanted to accomplish in two years.

“I had to go back and reverse engineer my game plan,” she said. “If it’s $72,000 in two years, that feels like a lot, so let me keep dividing it backward. Then it was $36,000 a year, which was more than what I was making at the time, so that still felt like a lot.”

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Joy kept going with her backward division until she reached a goal that she felt was realistic — $36,000 over 12 months meant $3,000 a month; $3,000 a month meant $750 a week; and $750 a week meant a little over $100 per day.

“That’s when the light bulb went off,” Joy said. “I was like, ‘I don’t think I’m capable of figuring out a $72,000 problem, but I’m capable of figuring out a $100 problem.'”

Look For Ways To Earn More

To bring in an extra $100 a day, Joy got creative. The first thing she did was sell and resell items for profit. Next, she started a side gig.

“I was working in HR, so I started a side hustle of helping people with their resumes,” she said. “I started out charging $19 and increased [my rate] over time.”

Overhaul Your Budget

“After about six months of selling things and just trying to hustle my way through, I was like, this is not going to be sustainable,” Joy said. “I’ve still got a long way to go on this and I’m starting to run out of ideas.”

So instead of focusing on earning more, Joy got educated on budgeting and looked for ways to cut back on her expenses.

“I also decided at that point to pause on 401(k) investing to really just focus on doubling down on paying down debt,” Joy said. “That’s how I went from having this really big problem to, let me just focus on the student loans first and I’ll worry about everything else after.”

Make Your Money Work for You

Once Your Debts Are Paid Off, Start Investing

While some personal finance experts advise continuing to invest while paying off debts, Joy found more success by focusing on one goal at a time.

“It’s controversial in the personal finance space, but I’m a big proponent of paying down debt first,” she said. “I couldn’t [focus on] growing my assets without paying debt first.”

Invest In Real Estate — but Do It Wisely

Joy became completely debt-free in 2019, at which point she shifted her focus to increasing her wealth.

“One of the two biggest contributors to growing my net worth was real estate, and, specifically, buying my primary residences in a way that was different than most of my peers,” Joy said. “As a millennial, most of my peers were buying [homes with a] minimum down payment and a 30-year mortgage. The first home that I bought, I bought on a 10-year mortgage.”

Joy was intentional about buying a home that she could pay off quickly, so she bought a much smaller home than what she could afford based on her mortgage approval.

“I bought at half of what the bank told me I could afford,” she said. “My payments were probably equivalent to what my friends were paying on a 30-year [mortgage], but on a much smaller home. People made fun of me or were like, ‘Why are you doing that when you can you can afford so much more?’ But I was able to pay off that first home in seven years instead of 30 years.”

Joy then used the equity from her first home to help pay off her next home, which she refinanced from a 30-year to a 15-year mortgage. Then, she bought a third home.

Make Your Money Work for You

“The third one I also bought on a 10-year mortgage, but I ended up paying it off in two,” Joy said. “A lot of people say, ‘You had really low interest rates, why would you pay off the mortgage?’ But the trade-off was that I was building equity really quickly on my home. Then, once those homes are paid off, it frees up so much cash flow because for most people, your mortgage is your probably your largest expense.”

Max Out Your Retirement Savings Contributions

Because Joy no longer had to put money toward mortgage payments, she was able to max out her retirement savings contributions.

“The other big contributor to the asset side of it was investing, mostly in ‘boring’ [investments like my] 401(k),” Joy said.

Joy made it a priority to max out her 401(k) and IRA contributions. Because she is self-employed, she was able to take advantage of the unique benefits of a solo 401(k).

“I do the match and I do the company sharing on that, which helps me grow my investments every year and also helps me save a lot of money on taxes,” Joy said. “As soon as I figured out that I could have my own 401(k) as a solo entrepreneur, that really changed the game for me in terms of not just the dollar amount of investing, but my mindset to say, OK, I actually don’t need like another entity, I can build these systems for myself.”

Make Your Money Work for You

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