How I Found Financial Freedom After Paying Off $20,000 in Debt


money love storyIn 2009, Kate Northrup, then just 26, was making more money than most twenty-somethings running a successful direct-sales marketing company, with more than 3,000 other entrepreneurs reporting to her.

There was just one problem: Northrup was deep in debt.

Despite the fact that she was earning a plum salary, Northrup hadn’t managed to amass any savings. Instead, she’d spent beyond her means—eventually digging herself into a $20,000 hole.

“I didn’t open my mail, so I had no idea how much I owed … or to whom,” Northrup says. “I was that adorable ostrich with its head in the sand.”

Once she took stock of her situation, Northrup pinpointed her financial ignorance to an unlikely source: low self-esteem or, what she calls, a lack of self love. “It doesn’t matter how many financial strategies you know,” she says. “If you don’t value yourself, you won’t actually do them.”

Thanks to her newfound sense of accountability, she slowly but surely climbed her way out of debt within two years—and then wrote a book about her journey. We asked Northrup to share some key insights from “Money, A Love Story: Untangle Your Financial Woes and Create the Life You Really Want,” including how you, too, can approach your own finances with a bit more love.

LearnVest: What inspired you to write the book?

Kate Northrup: It was my own experience of getting into debt, and then getting out of it. I never had a problem making money—the hard part was keeping it. I used to hope that somebody else would just take care of it for me. I also believed that if I kept making more money, I’d eventually figure it out. Obviously, as I learned, that’s not the case. I needed to pay better attention to the money I was making in a loving way. As a result, I’ve been able to make and keep more—and give more.

But what’s love got to do with money?

Just like any other relationship, your life with money has its ups and downs, its twists and turns, its breakups and makeups. And, just like other relationships, living happily with it really comes down to love—being stressed and overwhelmed by money only makes us retreat.

  • Brooke Z

    My relationship with money is one of guilt, but also of hopefulness. I’m trying & I’m very conscious of my efforts to do better & be better. I want my daughter, who is now two, to be able to grow up in a financially “free” household. Having that security/freedom (whether it be a substantial emergency fund or having no credit card debt), would be priceless to my & my family.

  • Joyce

    I have a love/hate relationship with money. While I love money because of the things it allows me to have, I hate money because of the stress it brings me. I make a decent salary for someone my age, but because of my student loan and car loan debt, I’m not able to love my money the way I’d like to! I should be able to save a ton more, but instead any extra funds go directly to my loans.

  • Julie

    My relationship with money is beginning to be fruitful. My husband graduated last May and finally has a position that pays enough to cover the bills. For the first time we are going to try to live off one income to prepare us for me to quit my job in January and stay home full time with our baby. It has definitely been a roller coaster to even think this would ever be a possibility, and we still have some challenges ahead of us (like sticking with a tighter budget), but we are both committed to making it happen.

  • Sash

    I hate my relationship with money. I don’t have enough And I want more of it but I also need to get out of debt. I need to be more committed to a budget and to money. I need to salvage my relationship with money

  • Radouarde

    I love what money does to me!
    It has been an exciting and frustrating couple of years filled with lessons learned, either the easy way or the hard way. The beauty of the hard way is that you will never make that mistake again (if you learn to see yourself as a powerful, wise, smart, and valuable person).
    It is true that you can’t control everything that happens to you financially, but that doesn’t mean that you shouldn’t try to manage and control it as much as you can.
    It’s like saying: “I might have an accident on this high traffic intersection anyway, so why be careful and vigilant?” (one eyebrow raised)
    I’ve learned to enjoy money and be grateful for the things it does allow me to do in the midst of everything else I’m still striving to make happen.
    I spent 6 months on my cousin’s couch (among many other money tightening activities) to pay off my roughly $7000 credit card debt, only to spend the next 6 months (and counting) paying for my mother’s medical bill from her out-of-nowhere sciatic/arthritis treatments.
    My plan was to spend the 7th month splurging on myself as a reward. Life put a hold on that.
    I couldn’t control my mother getting sick, but I’m so grateful I had gotten my finances in order right before that and was better able to face the new bills.
    That’s just one example of many others.
    Money (among many other components-God, self-esteem, etc.) empowers me when I do the right thing; that’s what I love about money. It’s a fair love affair. I treat it right, it treats me right. :)

  • T & K

    The older I get I feel less anxious than earlier times with regards to money. Lucky and grateful that I have enough for now and hopefully into retirement.

  • My Peace Of Food

    My relationship with money has been troubled. I’m pretty sure I thought I had to choose “love or money” when I got married because my husband has very low self esteem and didn’t see a future mapped out for him in this country. But I’m actually starting to remove the blocks, I think, with tapping. I just started, and it feels like an uphill battle, but something’s gotta give! I am giving up these limiting beliefs!

  • ronnie

    My relationship with money is that i chase it i am always looking for it,if i just stop and look at what I owe each month i would have something left over. Having a budget would help a lot just sticking to is the problem.

  • Debra

    My relationship with money is a mystery unfolding. I feel that I was not taught a proper view of money as an energy source while growing up. The energy that surrounded it was either shameful or full of fear and it’s resulting neighbor,greed. After falling into pitfall after pitfall in my twenties and thirties, I finally began to take a different approach. I learn to detach my emotions from money and use it with a different mind set. I have slip ups, but I am truly fascinated by the evolotion of my relationship with money.

  • Kim

    I have a Love/hate relationship with money. I love it when I have it and hate it when I don’t.

  • AnthonyA

    Tragic awareness – it’s like a display in a fine art musuem – I know it’s there, I’ve read all about it, but I never get to touch it and take enough home to satisfy me.

  • Linda

    My relationship with money is a scary one. I was doing fairly well and then the economy hit and my husband’s business started failing. I had to take many, many withdrawals from my IRA’s just to cover bills at the business as well as the mortgage. Now he’s left me and I have no retirement $ left. He has no $ to give me as the business is basically bankrupt and he’s just selling off equipment to cover the commercial loans until he can either rent or sell the building. My credit used to be perfect and now is really bad as all my $ went into trying to keep the business afloat so my credit cards and other debtors were paid late. I have tuition payments for my daughter in college and now am trying to save up enough $ to move (downpayment, etc…) as we live in the building that the business is in and there is no possible way I can stay there with just my income as the expenses are huge. My husband has moved in with his girlfriend and I’m left with no retirement, no savings, a very old car that will need to be replaced at some point in the not so distant future, bad credit and a daunting move. I need to get re-established and then really, really focus on my financial situation. I thought I was investing in OUR future. I am scared to think of what my future and retirement (which is not all that far away) is going to be like. I HAVE to get my financial situation back on track and get some major $ into a retirement fund. Wish me luck!

  • Cher

    It’s a mess!!! But working on it.

  • Kimberly

    My relationship with money is pretty typical, I think. I can sum it up in three words: Avoidance, Fear, Frustration.

    I would love to have a plan and know that if I faithfully followed it things would demonstrably change for the better. Bring on the book! :):)

  • Rebecca

    My relationship with money has always been a negative one, my own fault of course. I believe that I’ve gotten somewhat better with it, at the very least more aware of it, but I’m an emotional spender. It seems to fill a void, temporarily. Kate’s book seems like it would really help me understand my spending and make better decisions to create a positive relationship instead of a negative one.

  • JW

    My relationship with money is tumultuous. I spend when I
    have an emotional set back, a rough day, or need a pick me up. Unfortunately,
    this has turned into a vicious cycle because the more debt I rack up, the more
    bad days and emotional stress I have, leading to more spending! I feel guilty
    because I’d like to help my family, and my boyfriend won’t consider marriage
    until I am out of debt. He has helped me to the tune of 20k over the 7 years we’ve
    been together and I have squandered it all. I want to improve my consciousness
    about money, and stop using shopping as a pick me up.

  • Corinne Wahlberg

    My relationship with money is like having a split personality or perhaps dating two people at once because I live in two currencies. Because I work for an American company remotely while pursing a very expensive MFA at Central School in London, I am living two financial lives. The American money flows much like it did before I left, when I was under employed and just getting by. I’ve been working to pay off American bills, shifting to whatever card is offering zero percent interest for a year, a game I’ve successfully played for about 6 years. Then there is my UK financial self, spending loan money to live and cutting back on extraneous expenses like clothes and things and saving up for experiences. Hopefully I’ll exit my program with only student loans, having eliminated my credit card debt by working through it. Then debt will be like a child that I have to take care of until she’s ready to strike out on her own, I suppose. Chances are I’ll be paying off student debt for about 18 years!

  • Margo

    I am having a healthy love affair with money. I’m not jealous when “he” shares himself with others because he always accepts my invitations to visit. He is count-on-able and nonjudgmental. He would tell you that I honor and respect him, that I treat him with care and integrity and never take him for granted.

  • RJ41

    What an Aha! moment – my relationship with money mirrors my relationships with my ex’s. it lets me down which is just a perspective that can be changed. Thanks for the great article. I’m going to emphasize the positive from now on.

  • Brit

    My relationship with money is that of a loving protector shielding my money from danger. Having low paying jobs in the past I learned to live on minimum wage. As the years went on my career outlook improved and the better wages followed. And to this day I still live as if I were making minimum wage, while saving and investing the rest in an IRA and a brokerage trading account.

  • JenJen

    Unfortunately I cheat on my relationship with money. I have a spreadsheet with all of my debts and due dates, and budgets, which I look at everyday. I am extremely OCD about checking and updating my spreadsheets, and know where every penny goes. I employ the tactics of sleeping on if I want to buy something big before I buy it, but I still find myself doing the shameful “Man, why did I need to buy two new shirts just because they were on sale?!” the next morning when I check my bank account.

  • Jennifer Megan Varnadore

    I would have to say that my relationship with money is one of shame and fear. I’ve always felt that with the low amount of income I’ve always had, and the time I’ve had to spend taking care of my family, even when I was like 12-18 (and my mother should have been taking care of me instead of me her.) I have to be thrifty. I love being thrifty and bargain-hunting. However, a lot of the time, even though I can get cheaper deals on lots of things, there are some things I will walk away from even if it’s knock-down I can’t see myself living without it from the next day forward types of items. I’ll walk out of the store, want to cry, and tell myself it’s for the best, even though I truly wanted it desperately. I beat myself up for that. I end up wanting to go back, and knowing that more than likely it won’t be there if I did. It’s usually a good price too, I just tend to shove what I want onto the back-burner to give everyone else what I feel they deserve.

  • Char

    Every “self-help” book, activity, etc. Costs money! How in the heck do you expect someone to get out of debt, someone who is living paycheck to paycheck to pay for help? There is NO FREE HELP. People make money off of someone’s else problem/misery.

  • Char

    How in the world is a person suppose to get out of debt if they purchase every self-help book available? No help is free or cost effective. Its terrible for people to make money off of others problems or misery.

  • lovetohatemoney

    It’s a love hate exchange right now. I was I an excellent position but once again got a credit card for “emergencies,” which eventually slipped into my everyday means of payment. I’m maxed out and feeling overwhelmed and embarrassedd, despite my six figure income”

  • Nicole V Armand

    I am a 43 year old financial disaster. My gross pay monthly is right at 5,000, but I only bring home right at 3- regular deductions aren’t the problem. I have every possible loan with my credit union, and I am cut $750 a month, that goes to the 5 loans with my CU. I also have ELEVEN loans with loan companies. That’s a total of 16 mouse per month, ranging from $95 to $285. I am a single Mom with master’s degree ( a school administrator) who had to take on a 2nd job and about to start a third.

    I have been a financial disaster my entire life- which turned me into an addict (pain pills) because while taking the pills, I didn’t care. I lost my home and my car before I filed for bankruptcy in late 2009. By mid 2010, I was taking more loans because I transferred my addiction gambling. Many, many times I have thought of suicide, because I would have to send my kids to their Dad’s house for a week because I could not feed them until payday.

    And at 43 years old, I still CANNOT MANAGE MONEY, and don’t think I ever will. It KILLS ME when I have to tell my children NO for something, that it has to wait- even things for school. I can’t even imagine what it would be like to go one day without a bill collector calling me, or my bank account be in the black. As for savings, that’s a JOKE for me. That will NEVER happen; thank God I have a retirement policy, but I’ll have to work 20 more years, just for my retirement to equal my current pay.

    I don’t go out places, I have no friends- they all gave up, everytime I am asked to go someplace, I always have an excuse, but it’s because I CANNOT spend any money on that- and FORGET vacations- that’s also a JOKE

    I could write much, much more, but I’m sure everyone has heard enough…..

    The Financil Disaster Forever

    • ThisMoment25

      Dear 43 yr old,

      I can certainly see the pain and the frustration laid out here in your story- I just wanted to say that I empathize with your situation and that everything seems really bad right now, but I would encourage you to dig deep down and find the courage to try again for you and your kids.

      They deserve better and so do you.

  • ThisMoment25

    My relationship with money is evolving : before I had a family I made great money saved some and travelled , shopped in all the best stores and indulged my inner child… Now that I have a husband and a son I’ve changed my behavior- paid off debt and saving more for a house, college and retirement

  • christa

    It’s a dysfunctional relationship! Constantly stressed! I feel guilty about spending and use of credit cards yet I can’t seem to stay on budget or make significant progress on reducing the balances… they keep going up!

  • AbbieAnnie

    My relationship is one of shame and depression. Just like you said because of low self esteem etc spending was my distraction. Unfortunately it (debt) is now stopping me from living a filling life and I need to get a grasp on it to do so. In 2014 I look forward to accepting my mistakes and harsh realities to get my addiction under control and being moneywise in the future.