paint brush painting strokes of orange on canvas

Eliminating Credit Card Debt on an Artist’s Income

Jul 16, 2020
Empower Insights

How a young freelancer tackled her debt by defining her values

As a freelance artist, Samantha Johns’s annual income tops out at about $24,000 — before taxes. That number doesn’t leave a lot of room for extra expenses. But Johns, who is 34, grew up in a home where money was tight, so she learned early on how to be frugal. When she started living with a partner with more extravagant spending habits, though, her credit card debt began to creep up. “I didn’t feel like it was excessive,” she says, “but I was still spending more than I could afford.” Before long, Johns found herself with $4,000 in credit card debt. And, she says, “It was because I didn’t have a budget.”

Then, in 2018, Johns was offered an amazing opportunity. She’d been accepted to an artist residency in Sicily — but she’d have to pay for her own airfare. Unfortunately, she also realized that her mounting debt and lack of savings meant the trip was out of reach financially.

Still, the offer was too good to pass up. With almost a year before the residency would start, Johns resolved to get her finances in order and make the trip happen. At first, the Minneapolis resident didn’t make any changes to her spending. She simply tracked it (with the help of an app) so she could see where every penny went. Then, after two-and-a-half months of tracking, she made a detailed budget, with monthly caps for her spending in categories from gas to parking to eating at restaurants.

For the first few months, she did her best, but she still continually overspent in every category. Then came the lightbulb moment: “You see that you keep going over, and you see that the spending doesn’t reflect your values,” she says. Johns had intended to prioritize her art — but instead she was frittering money away here and there, without taking note of the cumulative effect of those small decisions.

If you pay off debt and don't reset habits, it just comes back.

After that realization, Johns made serious cuts to all of her spending. She also picked up more hours at each of her gigs. She promised herself that the longer hours and severely restricted spending would be temporary — just until she’d paid off her credit card debt. Once it was paid off, she’d start fresh and create a new, sustainable budget for the long term.

The plan worked. She put all of her extra income toward her credit card bill, making large payments that slowed the accumulation of interest. Seven months after she’d first created her budget, the debt was gone and she was able to attend the residency.

When Johns returned from Sicily, she kept her promise to herself — returning to working her regular hours and loosening up her spending a little. But she still keeps a close eye on her budget. “If you pay off debt and don't reset habits, it just comes back,” she says.

Though those seven months weren’t easy, Johns felt good knowing that she was working toward something important to her. And along the way, she learned how to comfortably budget for the long term without running up credit card debt. “Personal finance isn’t about math,” she says. “It’s about habits.”

Invest for your future with an Empower Investment Account

Latest Empower Insights

Glass jar filled with coins, labeled "Travel"
Sep 29, 2020
Empower Insights

Road trip

Savings tips for mapping out your next summer vacation.

A family of 4 sits on a dock peering at the view of a lake
Sep 22, 2020
Empower Insights

Summer of sacrifice

How one family is persevering after losing much more than an annual trip.

View of the front of a home
Sep 14, 2020
Empower Insights

Parked at home

How one family is moving forward after pumping brakes on summer RV trip.

Carefully consider the investment option’s objectives, risks, fees and expenses. Contact Empower Retirement for a prospectus, summary prospectus for SEC registered products or disclosure document for unregistered products, if available, containing this information. Read each carefully before investing.

Securities offered and/or distributed by GWFS Equities, Inc., Member FINRA/SIPC. GWFS is an affiliate of Empower Retirement, LLC; Great-West Funds, Inc.; and registered investment adviser, Advised Assets Group, LLC. Investing involves risk, including possible loss of principal. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.

IMPORTANT: The projections, or other information generated on the website by the investment analysis tool regarding the likelihood of various investment outcomes, are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. The results may vary with each use and over time.

Insurance products are issued by or offered through Great-West Life & Annuity Insurance Company, Corporate Headquarters: Greenwood Village, CO; or in New York, by Great-West Life & Annuity Insurance Company of New York, Home Office: New York, NY. Guarantees are subject to the terms and conditions of the contract and the claims-paying ability of the insurer.

The Empower Institute is a research group within Empower Retirement, LLC.

All features may not currently be available and are subject to change without notice. ©2020 Empower Retirement, LLC. All rights reserved.

Unless otherwise noted: Not a Deposit | Not FDIC Insured | Not Bank Guaranteed | Funds May Lose Value | Not Insured by Any Federal Government Agency.