How This Freelancer Went From $80K in Debt to Near-Millionaire

She credits her ‘main’ hustle, smart and aggressive debt repayment strategies and a big dose of optimism.

Written by Rebecca Safier / October 6, 2022

Quick Bites

  • A side hustle has the potential to turn into your primary source of income, as Rebecca Lake proved when she turned her freelance writing side gig into a $25,000 per month business.
  • The debt snowball and debt avalanche methods can help you get rid of debt, two strategies that Lake used to pay off $80,000 in student loans and credit card debt.
  • A positive mindset may be crucial for turning your financial situation around. Lake says you have to believe that things can be better in order to make changes and achieve your goals.

In 2014, Rebecca Lake was a single mother of two struggling to make ends meet.

“I was a broke single mom with nearly $80,000 in debt and no job,” Lake says.

While she had a small freelance writing side hustle, Lake was having trouble affording rent and groceries, let alone the payments on her student loans and credit cards. But she was determined to turn her situation around, both for herself and her kids.

“I had been homeschooling my kids and didn't want to change that,” says Lake. “So I decided I would try to turn my side hustle into a full-time business.”

From this decision—and a ton of work along the way—Lake was able to turn her fledgling freelance side hustle into a $25,000 per month business. She also built two profitable blogs, bought two homes, and is taking steps to become a certified educator in personal finance.

Not only did Lake pay off her $80,000 in debt, but she has now saved close to $1 million. From her experiences, Lake now makes it a priority to teach her kids the fundamentals of entrepreneurship and personal finance.

Inside this article

  1. Struggling to make ends meet
  2. From side hustle to main gig
  3. Using debt repayment methods
  4. Growing her net worth
  5. Setting up passive income
  6. Building an ironclad mindset

Struggling to make ends meet

Lake had been a married stay-at-home mom for four years when her marriage came to an end. While she was earning about $1,500 per month from freelance writing online, her income wasn’t high or consistent enough to cover her living expenses.

“I took my two kids who were 4 and 6 and used my meager savings to rent an apartment,” says Lake. “I had no job or income other than the money I was making from [freelance] writing.”

Lake rented a condo for $875 per month in a retirement community. While she says the older neighbors were not too happy living next door to young children, the rent payments fit her budget.

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She and her kids lived there for the next two years. During this time, Lake worked on turning her side hustle into a full-time job, growing her network and applying to every freelance job in the personal finance niche she could find.

“I didn't allow myself room to think that I would fail,” says Lake. “There was no choice of being successful or not, I just knew that I had to provide for the three of us.”

Turning a side hustle into a full-time business

To grow her freelancing business, Lake set specific income goals and worked to meet them. Her first goal was $2,500 per month, which she hit within the first month of being on her own with her kids.

“I challenged myself to increase that to $5,000 [per month], and within six months I'd hit that goal,” she says. “So I raised the next [monthly] goal to $10,000, which I hit approximately one and a half years into freelancing full-time.”

From there, Lake was able to continue growing her freelance business steadily. She had her first $20,000 month in October 2018 and has been making between $20,000 and $25,000 per month ever since.

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These years of growing her business weren’t easy, though. Lake had to carve out time to write between homeschooling her kids and making meals throughout the day.

“I would get up early and write in the mornings before my kids got up,” says Lake. “Then we'd do schoolwork for a few hours. I might write a little more during the day while they played independently.”

After she made dinner and her kids went to bed, Lake would work from 9 p.m. until 2 a.m. Then, she says, she’d wake up with her kids and do it all again the next day.

“There have been times in the last eight years when I've even worked on Thanksgiving or Christmas because I had to get it done to pay the bills,” Lake says.

Since she started hitting $20,000 months in late 2018, though, Lake has been able to ease her foot off the gas pedal.

“Now it's different,” she says. “I work on my freelance writing business Monday through Friday only from 9 a.m. to around 1 p.m. every day. We homeschool in the afternoons, and then the rest of the day is leisure time or family time.”

Using the debt snowball and debt avalanche methods to pay off debt

Once Lake started moving out of survival mode, she was able to prioritize paying off her debt. She owed $80,000 in total, which was a mix of student loans and credit card debt.

“The student loans were all federal loans in my name that I'd used to pay for college and later, grad school,” says Lake. “The $40,000 in credit cards were in my name, but [it was debt] my husband had run up as an authorized user on my accounts.”

To tackle this debt, Lake kept to a strict weekly budget.

“I spent $75 a week on groceries and $25 a week on gas and basically nothing else unless it was free,” she says.

After building an emergency fund, she funneled all her extra income into paying off the debt using the debt snowball method. The debt snowball is a method of debt repayment that involves targeting loans with the smallest balances and working your way up.

“Getting rid of a few smaller debts first helped me to stay motivated to stick to the plan,” says Lake.

After paying off some smaller debts, Lake switched to the debt avalanche strategy. With the debt avalanche, you target loans with the highest interest rate.

Once she had enough disposable income, she paid hundreds (and sometimes thousands) of extra dollars per month on her debt. Lake paid off her credit card balances first, and in 2020, she made the last payment on her student loans.

Growing her net worth

As Lake systematically worked away at her debt, she also started saving and investing. She built a savings account so she would have cash on hand to cover in the event of an emergency. She also set up a retirement account for herself and education funds for her kids.

“I started saving consistently in 2015,” says Lake. “I opened an SEP IRA for myself and college savings accounts for my kids. I also opened individual savings accounts for each of them and started putting in what I could.”

In the beginning, Lake set aside $100 per month into her IRA and $50 each into her kids’ savings accounts.

“It wasn't much, but I did like seeing the balance go up every month, so I stuck with it,” she says. “As my income grew, I increased those contributions.”

These days, she’s able to save almost $126,000 per year and has nearly $1 million in various accounts for herself and her kids.

“I'm putting about $10,500 a month into savings right now,” says Lake. “Of that amount, $4,500 goes to my SEP IRA, $3,000 goes to my Vanguard digital advisor account, $2,000 goes into my emergency fund, which is really just a big cash pot, and $1,000 is split between custodial savings accounts for my kids.”

While Lake’s monthly expenses are higher than they used to be, she still keeps spending low so she can maximize her savings. Her advice for others looking to save? Invest your money.

“Investing can help you grow your money faster than just putting it in a savings account,” she says. “My portfolio has taken a hit recently because of the ups and downs in the market, but I won't stop investing since I know that what goes down usually does come back up.”

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Setting up additional income streams

As a freelance writer, Lake knows how to create engaging blog posts for an online audience. So she decided to apply her writing skills to build her own blogs and in so doing, set up an additional income stream.

Lake runs four blogs: personal finance site Boss Single Mama, mom blog Busy Mom Smart Mom, freelance writing site Write to Six Figures and her latest creation Cute Frog Creations, a blog about k-pop that she launched to help promote her daughter’s Etsy store. Two of Lake’s blogs have become profitable, earning her an extra $3,000 per month.

Along with applying her writing skills, Lake also learned about blogging from courses and YouTube. Her advice for others interested in blogging is this: “Give it time, learn the basics and don't try to measure yourself by what others are doing.”

Building an ironclad mindset

Between 2014 and today, Lake was able to pull her finances back from the brink and create comfort and security for her family. Building a strong, optimistic mindset, she says, is key to achieving your goals.

“Debt can be soul-crushing and losing a job is always scary, but you have to believe that things can be better,” says Lake. “If you let yourself think nothing will ever change or improve, then it won't.”

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For Lake, setting financial goals helped her stay on track and make progress.

“Once I started setting goals for income, debt repayment and saving and visualizing those goals, I began achieving them,” she says. “And I was not afraid to set really big goals.”

For others who are trying to pay off debt or increase income, Lake recommends starting with a small step.

“If you feel like you're drowning in debt or under financial worries in general, find one thing you can do right now to alter your course,” she advises.

That might mean making a list of your debts, for example, or opening letters from bill collectors.

“These are small things, but they can get you on the path to taking bigger steps like getting help from a credit counselor if you need, dedicating a chunk of your day to looking for a better job or getting caught up on one bill that's past due,” she says.

According to Lake, taking that first small step can initiate the momentum that will lead to bigger changes.

“I've been there and done all of that and it's not easy, but getting started is the hardest part,” says Lake. “Once you can do that, it becomes much easier to keep going.”

About the Author

Headshot of personal finance writer Rebecca Safier

Rebecca Safier

Rebecca has been writing about personal finance and education since 2014. Formerly a senior student loans and personal loans writer for Student Loan Hero and LendingTree, Rebecca now covers a variety of personal finance topics, including budgeting, saving for retirement, home buying and more.

Full bio

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