Life & Business

Life & Business: What To Do If Your Dream Put You In Debt

by Sabrina Smelko


Talking about money isn’t easy. In fact, talking about money was once so hard for Sandra Hanna that when she was invited to be on Oprah to share her financial story, she broke out in nervous hives so badly that a makeup artist had to airbrush her entire face, neck and chest! It’s so great to see more and more conversations being had around this once taboo topic that everyone experiences and struggles with — even Sandra.

Just a few years ago, Sandra was a complete financial disaster. Together with her five girlfriends, all of whom were also in debt, they set out to fix it. Inspired by Oprah’s Debt Diet series, they formed a money group and developed a system to get out of debt once and for all. And it worked! Sandra has not only paid off her debt, but has made hundreds of thousands in income, and, along with her friends, she launched Smart Cookies to help others do the same. Since their start, they’ve published two books, have a TV series under their belt and have been featured on OprahThe Today ShowCNN, Anderson CooperABC News and in the New York Times. Today, we’re thrilled to have Sandra joining us to share her knowledge and expertise on what to do if your dream put you in debt. —Sabrina

Maybe it’s because I still feel like most people would openly discuss details of their sex life, rather than open up honestly about their financial situation.

Maybe it stems back to my own issues of being ashamed of my own debt and unwillingness to talk about money.

But for whatever the reason, these days, more than anything, I just LOVE it when people are brave and confident enough to talk openly about their financial situation — especially when it’s less than perfect.

Recently, I had the opportunity to work with more than 100 women who were brave enough to do just that; to own up to their less than perfect financial situation and commit to doing something about it by taking a course we ran on Smart Cookies, called the Debt Free Bliss Boot Camp.

The women who joined the online course were amazing — they were smart, successful, driven and they went into debt simply because they were following their dream to start their own business, to create their own freedom and follow their life’s passion.

And there’s nothing wrong with taking on some debt to start a business, because when you’re just starting out you’ve got to do whatever it takes, and it takes money to get things off the ground — and sometimes (but not always) that means taking on some debt. But for these women, even years after getting their business up and running, and with money coming in and success in their business, they still couldn’t get a grip on their debt. But should this really be surprising, considering paying off debt is a skill we aren’t really taught anywhere?

We worked together in the boot camp for six months, and these women from all over North America, who started off as strangers, all became a circle of very special friends. They are some of the most inspiring women I know and their success in paying down their debt in only six months blew me away. Because I was once in their position and I know so many other smart business owners struggle with debt, I would love to share what I learned from their stories and the specific strategies they implemented to ditch their debt for good.

Get it out in the open.

When we run our own business we juggle so many things and it’s very easy to let things we don’t want to deal with stay out of site, out of mind. I have a very close friend who used to keep her unopened credit card bills in the microwave. But getting your debt right out in the open (and out of the microwave), where you can’t avoid it, is very important. All of the women who paid off their debt in our boot camp took the time to write out these four things about their debt and post it somewhere they would see it everyday.

  1. Name of debt ( business loan, credit card, student loan, etc.)
  2. The current balance
  3. The current interest rate
  4. The minimum payment

I remember doing this only a few years ago with my own debt, and I broke out in hives in the process. But, facing it was what I needed to do to feel like I was taking back control and saying thank you. Yes, thank you. Let me explain what I mean by that, because this exercise was a game-changer for the women in our boot camp. Next to all of their balances, interest rates and minimum payments they wrote a big bold thank you for what their debt afforded them to do. Think about that right now; did your debt help you go to school, did it give you the office of your dreams, were you able to travel to Europe for art school? Facing your debt, getting it out in the open and feeling a bit of gratitude instead of disgust and fear just might be exactly what you need to face the reality and finally kiss it goodbye for good. For Collette Larson, blogger at thislittlejoy, it was this seemingly simple shift that helped her pay off thousands of dollars of her graduate school student loan while starting her blog.

Focus on life beyond your debt.

So your dream put you in debt — that’s okay. You’re clearly a doer and you’re going to pay that debt off, but you’ll do it much faster and with way less headache if you have a crystal-clear picture of what your life will look like debt-free. Will you have more freedom to launch your next product line? Will you sleep better knowing the money you make from your business can now go towards supporting your family?

Lori, who paid off more than $25,000 of debt in our boot camp, shared with me that she could literally taste the freedom that being debt-free would give her. She could see the trip she and her son would be able to take together and she could feel the sense of pride she would have knowing that she paid for the trip in-full, ahead of their vacation. This vision is what kept her going, it’s what gave her the motivation to pay off more than $25,000 and take her dream trip to Alaska with her son (which she just returned home from). When you think about your life and your business debt-free, what will you have the freedom to do that you can’t right now?

Put the snowball method to work.

The snowball method is by far the most powerful method I’ve seen for paying debt down. Collette, blogger at thislittlejoy, paid off a huge portion of her graduate school student loan using this system and shared with me that it permanently shifted everything she thought she knew about paying down debt. Here’s how it works: you start by putting as much money as you can towards either your debt with the highest interest rate, or your debt with the smallest balance, while still paying the minimum on larger debts. Once the first debt is paid off, you take what was being applied to the first and start paying that towards the next debt, gradually proceeding until all of your debts are squashed. It’s simple and it works.

Automate that puppy.

You’ve automated and systematized everything else in your business, but what about your debt? Once you’ve got your snowball plan in place, automation is your best friend. There are so many simple apps to help you get your debt to zero, so put them to work for you. You’ve got about a million things you would rather focus on than paying down your debt, so put it on cruise control. Lily Anderson, who built a beautiful jewelery design business while paying off $6,000 of debt, set up automatic payments so when things got busy in her business, she didn’t have to worry about remembering to transfer extra money over to her debt.

Get your bank and credit card company on speed dial.

I would rather look at an excel spreadsheet all day than spend time talking to someone at my credit card company, but having a conversation with someone at your bank or credit card company will likely save you hundreds if not thousands of dollars if you’re paying off debt. That’s worth a phone call, don’t you think? When I picked up the phone and finally called, I saved myself thousands of dollars in interest and unnecessary fees by canceling a fee that I had blindly paid monthly for years — something called consumer protection insurance, which some banker had convinced me was necessary when I first got my credit card in college. And I know so many other business owners who share the same experience; one of my dear friends and sought-after coach, Hillary Rubin, recently shared with me that she was shocked at how helpful her bank was while she was paying her debt down. They helped her find consolidation options and saved her thousands in interest. Now, here’s the secret — because I know you don’t want to spend your precious time trapped in robo-voice land trying desperately to reach a real human being — before you dial, enter your bank or credit card’s name into a website called gethuman.com. Doing this will give you the best phone number or dial combination to get you directly to a helpful, real human every single time.

Of course, there is no question that paying off debt requires organization, discipline and yes, you do have to face the numbers. But in my experience, those who are the most successful at paying down their debt do two things differently than most. First, they focus on why they want to be debt-free and secondly, and most importantly, they have someone to support them and hold them accountable along the way. This person could be a mentor, another business owner, your partner, or maybe you join us in our next Smart Cookie boot camp. An accountability partner can be found in a lot of places, but having someone you trust to support you and cheer you on is, in my experience, the biggest success factor in paying down your debt. Because working towards any big goal is hard, but having a cheering squad behind you just might make the journey a bit easier to take.

Suggested For You


  • Smart cookie debt boot camp was definitely a turning point for me and my relationship and attitude toward my debt and just money overall. Breaking it down into simple action items really takes some of the anxiety out of it!!

  • I would love to hear about those who went into debt to fund a venture that was ultimately unsuccessful, and how they were able to pay off the debt while continuing to pursue a dream.

      • This one (the link doesn’t work, it takes you to smartcookie.com, not smartcookies.com):
        ‘Recently, I had the opportunity to work with more than 100 women who were brave enough to do just that; to own up to their less than perfect financial situation and commit to doing something about it by taking a course we ran on Smart Cookies, called the Debt Free Bliss Boot Camp.’

  • OMG ! You’re stalking me aren’t you ? I’m sad to say that this is one of the most appropriate posts to my life I’ve ever read. As a creative, the money side of my business is a real stress to me, so I stick my head in the sand and ignore it. Thank goodness I have an amazing business partner who guides me through, but reading this is the inspiration I need to take paying down my debt – the debt which enabled me to start the business, seriously. Thanks guys. Where would I be without D*S ? Sigh

  • Honestly, it’s hard to realize a situation, especially when you realised you are on debt. it ‘s hard but it’s not the end of the world even if your bank counsellor tried to convince you about it. Trust me I know what it is. But after taking conscience of the situation, I changed my way of living : end of shopping, end of running things as I wanted. But despite all I ‘ve been through, I was lucky enough to meet my husband whom I told him everything, especially my bank account situation. Seven years later, I am about to run my business as I want, I changed my way of living, I don’t do shopping as I dis before, I do not meet the persons I was in contact before… But I do not have any regrets

Leave a Reply

Design*Sponge reserves the right to restrict comments that do not contribute constructively to the conversation at hand, that comment on people's physical appearance, contain profanity, personal attacks, hate speech or seek to promote a personal or unrelated business. Our goal is to create a safe space where everyone (commenters, subjects of posts and moderators) feels comfortable to speak. Please treat others the way you would like to be treated and be willing to take responsibility for the impact your words may have on others. Disagreement, differences of opinion and heated discussion are welcome, but comments that do not seek to have a mature and constructive dialogue will not be published. We moderate all comments with great care and do not delete any lightly. Please note that our team (writers, moderators and guests) deserve the same right to speak and respond as you do, and your comments may be responded to or disagreed with. These guidelines help us maintain a safe space and work toward our goal of connecting with and learning from each other.