From Financial Despair to Freedom: How Budgeting Transformed a $105,000 Debt Burden
At just 22 years old, Brett Holzhauer found himself drowning in $105,000 of debt, a situation that left him overwhelmed with stress, anxiety, and sleepless nights. The personal finance writer, now 32, vividly recalls the moment he decided to change his life, lying in a freezing Salt Lake City apartment, unable to afford to turn on the heater. "I will not live like this," he declared, setting a goal to be debt-free by age 30.
The Debt Breakdown and a Beachside Celebration
Holzhauer's debt consisted of $80,000 in private student loans and approximately $25,000 split between a car loan and credit cards. According to EducationData.org, this placed him among the 17.8% of borrowers with student loans ranging from $40,000 to $100,000. The average borrower takes around 20 years to repay such loans, but Holzhauer managed to clear his in just eight years, finishing 12 years ahead of schedule.
His journey culminated in a celebratory moment on Dania Beach, Florida, where he made his final payment of $1,752 on his phone and toasted with a bottle of Andre sparkling wine alongside his girlfriend. "I didn't want to live with that burden forever," Holzhauer explained, reflecting on the relief of ending his financial struggle.
The Budgeting Blueprint That Made It Possible
Holzhauer credits a disciplined budgeting strategy as the cornerstone of his success. He began by conducting a thorough audit of his monthly expenses, writing everything down on paper to understand his cash flow. At the time, his expenses totaled about $3,500 per month, while his income ranged from $6,000 to $7,000. He and his wife allocated all extra funds toward debt repayment, adopting an "attack from all angles" approach.
Importantly, Holzhauer avoided extreme austerity measures, instead budgeting $250 to $500 monthly for enjoyment, such as travel, to maintain a balanced life. "I still wanted to enjoy my life while paying off debt," he noted, emphasizing that flexibility is key to sustainable budgeting.
Side Hustles and the Power of Saying "No"
To accelerate his debt payoff, Holzhauer took on freelance work, writing personal finance and travel articles that typically earned him $1,000 to $2,000 extra per month. He also highlighted the critical role of self-discipline, stating that learning to say "no" to impulse purchases—like new cars, shoes, or iPhones—is a major win in budgeting.
He identified specific "danger zones" for spending, cutting back on weeknight dining and clothing purchases. For apparel, he shopped at thrift stores only when necessary, and he became a mindful grocery shopper by avoiding junk food, alcohol, and soda, while sticking to lower-end stores. Holzhauer also warned against subscription services, describing them as "a death by a thousand cuts" due to their cumulative cost.
Practical Tips for Effective Budgeting
Holzhauer advises that the best budgeting system is one tailored to individual preferences, whether it involves writing numbers down, using apps, spreadsheets, or even ChatGPT. He stresses that budgeting is essential regardless of income level, but it must be paired with conscious spending habits.
Reflecting on his journey, Holzhauer admitted that buying a new car was "easily the dumbest financial move I ever made," as it contributed significantly to his non-student-loan debt. His story serves as a testament to how strategic planning, side income, and mindful spending can lead to financial freedom, even from substantial debt.
