Leah is an illustrative composite, built from common experiences shared by single parents managing consumer debt. Her numbers are realistic, but she is not a real person and this is not a guarantee of results.
At 38, Leah was raising her eight-year-old daughter, working full-time in an administration role and bringing home about $4,850 a month. She rented a modest two-bedroom unit, drove an older car and had no expensive habits. Yet she was carrying a car loan and three credit cards after a separation, moving costs, school expenses and a run of repairs.
Her total debt was $31,900:
- Car loan: $14,700 at 9.4%, repayment $355 a month
- Card one: $7,800 at 20.99%, minimum $195 a month
- Card two: $5,900 at 20.99%, minimum $150 a month
- Card three: $3,500 at 20.99%, minimum $95 a month
The minimums alone came to $795 a month, before the occasional extra payment. Some months she paid more; other months, a school bill or a tyre pushed spending back onto a card. “Paid off” felt like a word for somebody else.
Why the situation felt so hard
Leah was not failing because she lacked willpower. The maths was working against her. Average card rates sit around 20.99% a year, based on RBA data cited in 2026 reporting. On $17,200 of card debt, that is roughly $300 of interest in the first month alone before meaningful progress on the balance.
She was also dealing with costs that have climbed faster than comfort. ABS figures released in August 2026 put annual CPI inflation at 3.5% to July, with housing up 5.0% and food up 3.2%. Mid-2026 Finder data says more than half of Australian mortgage holders spend over 30% of take-home pay on repayments, while rental affordability is also at record lows. Cotality put the national median rent at $705 a week in July.
Leah’s rent was below that figure, but it still took a large bite out of her pay. Her first breakthrough was not finding $10,000. It was stopping the cycle of using credit to cover routine surprises.
Step one: a plan based on real life
Leah spent one Saturday morning downloading three months of bank and card transactions. She did not label every coffee a moral failure. She looked for repeat costs she could change without making life miserable.
She found about $465 a month to redirect:
- $110 from cancelling and pausing subscriptions, including unused streaming services
- $85 from changing mobile and internet plans after asking providers for retention offers
- $120 from a tighter supermarket plan: one online order, packed work lunches and fewer top-up shops
- $75 from reducing takeaway to one planned family night a fortnight
- $75 from changing car insurance and setting aside a small amount for annual bills
She also opened a separate savings account and put $30 a week into it until it reached $600. That buffer mattered. When her daughter needed a new school uniform item, Leah used cash instead of a card.
Step two: lower the cost before attacking the balance
Leah rang each card provider, explained she was experiencing financial pressure and asked about hardship assistance, a lower rate or a structured repayment arrangement. One provider reduced her rate temporarily. Another froze further use of the card and set a fixed repayment arrangement. She kept records of every call and asked for agreements in writing.
She did not apply for more cards or take out a high-cost payday loan. She also checked whether consolidating would genuinely lower the total cost. In her case, fees and the risk of stretching the debt out made it less useful than keeping the cards closed and paying them down directly.
Her car was necessary for work and school drop-offs, so selling it was not a realistic first move. Instead, she refinanced the remaining car loan to 7.2%, reducing the required payment by $35 a month. She redirected that $35 straight back into debt repayments.
Step three: use the avalanche, with a visible win
Leah paid minimums on every account and sent every extra dollar to the card with the highest interest rate. This is called the debt avalanche method. It saves more interest than spreading extra payments evenly.
Her new debt payment total was $1,120 a month: the $795 minimums plus $325 from cuts and refinancing, alongside an average $120 a month from occasional weekend admin work and selling unused household items early on.
The first card was gone in five months. Leah then rolled its $195 minimum payment onto the next card. After 12 months, two cards had disappeared. The final card fell in month 16, despite a couple of imperfect months when school holidays cost more than expected.
Then she turned the full snowball of payments onto the car loan. By month 22, it was gone too.
What $1,120 a month changed
Over 22 months, Leah paid around $24,640 from her regular plan, plus approximately $7,260 from tax-time refunds, a small pay rise, extra shifts and selling a few unused items. Not every dollar was predictable, and the exact interest changed as balances fell. But the central rule stayed the same: windfalls did not become spending money until the debt was cleared.
Her final month was quiet. She made the last transfer, received confirmation that the loan was closed and sat at her kitchen table crying with relief. The win was not that she became rich. It was that her pay finally belonged to the present instead of old emergencies.
If your starting point looks like Leah’s
Start smaller than you think you need to. List each debt, its rate, minimum payment and due date. Build a modest cash buffer, contact lenders early if payments are becoming difficult, and choose one repayment target. A free financial counsellor can help if you are overwhelmed; in Australia, the National Debt Helpline is available on 1800 007 007.
Leah’s path took 22 months, not 22 days. Yours may take longer or move faster. Either way, one clear next payment is still progress, and you deserve a plan that leaves room for being a person as well as paying off debt.
This article is general information only and not personal financial advice.