Transcript for Tips for taking a leap toward your debt-free dreams
with our series take a leap where we're helping folks leap into bold change. This morning we're going to show you how to pay off debt. Did you know the average U.S. Household has over $53,000 in credit card and student loan yeah and we want to introduce you to a mother of two who's making it her mission to take on her finances. I decided to make 2020 my year to make a leap. Reporter: Patrice sosoo has big dreams for 2020. Simplicity, calmness, beauty and most importantly paying off my debt. Reporter: And she has big debt. When I graduated college I had $97,000 in student loan debt. And since then it has increased to $130,000 thanks to interest. Reporter: Yes, $130,000 in debt. Like so many Americans, Patrice paid her minimum each month and prioritized living her life. But it came at a cost. Having that student loan debt over my head just felt like a dark cloud. It's completely overwhelming and the reason I decided to do it now is really because of my children. Good morning, Patrice. Reporter: To Hepa these meet CEO and co-founder of. Llevest, Sallie krawcheck giving Patrice some valuable advice. While this may feel overwhelming, in fact, it's not. Reporter: Sallie helping Patrice set and maintain a budget using her intentional spending plan. We here at ellevest laid out a number of different values. Pick the top three to five for you. Definitely kindness. Taking a step back and saying I will spend on those things that give me the greatest joy in life is intentional spending. Reporter: Patrice is also putting in the work boosting income through her side hustle and selling items online. I'm so excited because this is more money towards my debt. Reporter: Sallie's tip to tackle debt fast. We're just going to start chipping away at them from the highest interest rate to the you could feel the stress lift from her as we went through the plan. I feel really inspired. I feel like this is the right time and I just want to get it done. Patrice and financial expert Sallie, thank you so much. Patrice, thank you for allowing us to share your story. Are you ready for this. I'm so ready. I'm finally ready. Intention, and, Sallie, you'll help her and us and have suggests for us. It starts with spending. You have a formula. Yeah, we do. In fact, the first step was to diagnose where Patrice is spending the take home pay so we took a look at what is she considered to be her needs. Rent, gas are, utilities, fun, fun, fun. Oh, wants but I call it fun then future use and diagnosed it. What we recommend at elleves it is what we call the 50/30/20 50% to needs, 20% to future use, 30% to fun. We love this because what it does is it guarantees you live below, you know, the -- below where you're able to. You're living below your means. That's what you can do. And -- Still have fun. Life is for living. Having fun this there while investing in future you really important. You can do this. I can absolutely do it. Let's step over here. Okay, all right. Americans, let me tell you a figure. Americans hold over $444 billion in credit card debt. 444, so you have a suggestion for us when it comes to credit card debt. What was interesting, we started with this is a student loan issue. When Patrice came to visit, as with so many other Americans we said wait a second. This is a credit card and student loan issue and those credit card rates for Patrice as high as 19%. So what we did was we got to start with a credit card debt and literally froze the credit card. We put it in ice. That way if she needs it for an emergency, she can unfreeze it and get to it. But it really makes her think. You got to really want to get there. You know it. Or microwave it and then we started to attack, are some of those needs really needs? And can we do things like go with fixed expenses and call the utility company and tell the cell phone company you're about to leave. You'll be surprised how much people will give you a deal and put the student loan pay on auto pay and often they'll take the rate down. Okay. Side hustle. Right. Side hustle. I love the pile of money here. Who doesn't, yeah. First of all what we'll do is take those expenses that she saved and put them towards the credit card debt an opportunity loan debt in order of the highest to lowest interest rate. The other thing we're going to have her do which might surprise you is she's got savings. Take the savings and put a big chunk of that to the credit card debt. Whoa. Boy, I want my savings but, look, if there is an emergency you can put it on the credit card. Okay, okay. So this is what we call a financial arbitrage where you're earning almost nothing on the savings but paying a lot on the debt and then we get to side hustle. First of all even before that, she is, wow, go ask for a raise. Just go to work, ask for a raise. You probably -- you know, you'll probably get something. She's killing it at work then I love she's selling clothes on sites like the realreal. Can do some freelancing so there are a number of things you can do. We don't want to forget it's not just about cutting expenses. Sometimes about making more money too. All of these suggestions, are these all doable for you and your family. Absolutely. I already started doing some of the things in the past two weeks I've sold so many things on poshmark and craigslist and made over $1200. What are you selling? Wow. Really. I'm selling clothes, furniture, shoe, things I don't even rather. $1200 just like that. Yeah. All right. Final point is money is women's number one source of stress and taking action the way Patrice is is the number one driver of their confidence in their future. Not only is there a financial change you can just feel her confidence. Oh, Sallie, bless your heart, thank you so much, Patrice. Really Progressive. Be sure to follow Patrice's debt-busting journey and join in on the conversation on all our social accounts. Visit our website for Sallie's
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