This Mom Paid Down $36,000 in Debt in 2 Years—Here's How

YouTuber, podcaster, and mom of four, Lydia Senn, paid off $36,000 in two years. Here's how she did it and her best money-saving—and spending—tips for other families.

Growing up with a mom who was a teacher and a dad who worked in social services, Lydia Senn says she never felt a sense of lack. "There was always enough, and if they struggled, it wasn't something that as a child I knew about," she recalls.

Similarly, money was something the family didn't discuss. "It was this mystery to me and something that I had to figure out as an adult. How do you manage money? What is a credit score? Why is credit important? How do you balance taking care of your finances with being a parent and having a job?"

When Senn graduated from college, she and her husband moved to the city and took advantage of all the opportunities that urban living afforded them. "We went to concerts, we went to movies, we went on vacations that we put on credit cards," she says. "We just kind of piled it on."

The couple felt like they were "bulletproof," says Senn. But then, the 2008 recession hit, and Senn lost her job while her husband took a pay cut.

Around the time Senn was pregnant with her first child, she and her husband had about $36,000 in debt, half of which was his student loans. "We felt like we have the rest of our lives to pay off this debt—we'll get to it when we get to it," she remembers.

But Senn was working as a journalist in North Georgia and began thinking about the cost of daycare plus credit card payments and more. "When we paid all of those expenses, I would only be bringing home about $100 a week," says Senn. "And that just really didn't feel worth it—to go through all of that, to bring home so little."https://1cbdcddfdf6d36f14cad6db4547e67be.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

She started thinking about what they would need to do to move forward, to send their child to college, and possibly even have some career flexibility. Senn and her husband decided to devote the last five months of her pregnancy to saving up as much money as they could by couponing. Senn brought in extra cash as a freelance writer, and later, she became a virtual assistant. In the end, they had $8,000.

"We were motivated at that point," she remembers. The couple felt like they could tackle that $36,000.

Senn decided to zero in on her skillset—writing and communicating—and began doing work for political campaigns and small businesses that needed copy on their website. "Whatever I could find, I took it," she recalls.

Within two years, Senn and her husband paid down their overall debt. Today, she shares her money-saving tips on YouTube and Instagram, empowering other families to follow in their footsteps and have a "big life on a little budget."

Here are just a few of Senn's best tips for meeting your financial goals while enjoying life.

Make Use of All of Your Skills

Senn encourages anyone looking to make extra cash to write down a list of every skill they have, regardless of how small they think it is. "Every skill that's ever been useful in your main job, in a side job, in a summer job, anything that you would list on your resume—pull it out, write it down, highlight it," she says. "And be aware of what opportunities those small skills can lead to."

Open a Sinking Fund

"When we were first getting out of debt, we really utilized sinking funds a lot," notes Senn.

Sinking funds, or a fund set up to save a fixed amount of money each month, can be used for anything you're saving up for, including an appliance, a birthday celebration, or a car.

To set one up, you first figure out when you want to have the money to spend on the item or the event. For example, say you want to book a trip for six months from now. Then, you'll want to divide the total cost of the trip by the number of months you have until that date. So you'll know you need to save a certain amount per month out of your paychecks. "It gives you plenty of time to save, plenty of time to plan, and plenty of time to get excited," says Senn.

Focus On Quality Time With Your Kids

At times, parents want to quantify how much they love their children by how much they spend on them, points out Senn.

"But we don't show our children, our parents, or anyone our love by how much we spend on them," she says. "You show it by the quality of time that you give them."

Ultimately, what your child needs more of is just you—a happy, whole, healthy parent, which, in Senn's view, is worth more than any amount of money that you could spend on them.

Don't Feel Like You Have to Be Debt-Free to Embrace Life

Parents don't have to be totally debt-free before they can enjoy things like outings with their kids. "I think that you can start small, and in the journey of life and of paying off debt, you need to give yourself some breaks," notes Senn.

That's why she thinks it's so important to set aside money, regardless of how little, to go out and explore with your children. "Maybe it's something as small as visiting an art museum or a zoo or an aquarium in your city that you have not gotten to go to before. Or maybe it is something bigger, like going on a trip or a day trip," she notes. "And this is something that I've had to learn to prioritize while our children are young."

She emphasizes how crucial it is to give yourself that much-needed bonding time as a parent, "because life is hard, and it is also fast and short and, as important as it is to stay on top of our finances, we don't need to lose sight of these big and small moments that we get to have together."

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