How I Turned My Utang Cycle Into Passive Income- A Debt Survivor’s Story

Growing up in the Philippines, I believed debt was simply unavoidable. Everyone around me—my neighbors, parents, even the families of friends—had utang. It was a cycle handed on like an unwritten custom. You borrow to survive, pay minimum payments, and hope that somehow things would turn around someday. Still, for most it never does.

Credit card debt, personal loans, and monthly payments barely covering the interest found me drowning. My pay vanished before I could really appreciate it- way before I could even save money. Debt felt like weight, and I knew I would never be free if I did nothing. I so decided to break out from the debt cycle and, more importantly, discover a means to turn my financial horror into a development possibility.

The first step I did on learning how to get out of debt was acknowledging that the problem wasn’t just my income but my mindset. I had grown up seeing debt as normal, something to be tolerated rather than conquered. I came to see that breaking free involved redefining money rather than only clearing debt.

I began by enumerating all of my debts—loans, credit card balances, and other obligations I had accrued over years. The stats were appalling. Alone, interest payments were consuming my monthly salary. Making minimal payments on the rest, I choose to start with my smallest balance using the debt snowball approach. The drive to keep on came from seeing first debt go.

Paying off debt, though, was insufficient. I started looking for ways to generate income passively as I wanted something more than my regular monthly income.

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I knew credit cards weren’t inherently bad. The problem was how I had been using them. Instead of racking up more bad debt, I started leveraging my credit strategically.

I applied for a cashback credit card and used it only for necessary expenses, paying off the full balance each month to avoid more interest. The rewards I earned went directly into an emergency fund, which gave me financial security I never had before.

Then, I discovered that some people use credit card points to fund side hustles. Inspired, I signed up for an online course using rewards points and learned about digital products. That course would later help me build a passive income stream.

With my newfound knowledge, I looked into different ways to earn passive income. I wanted something sustainable, something that could grow without requiring all my time.

1. Online Business & Digital Products - I created an ebook about budgeting for Filipinos, using what I learned from my debt repayment journey. I listed it online, and to my surprise, it started selling.
2. Real Estate Investment - I pooled savings and a small business loan to invest in a condo unit, renting it out for rental income. The tax benefits and long-term appreciation made it a smart move.
3. Mutual Funds & Stock Market - I started small, putting extra income into mutual funds and index funds, slowly building a diversified investment portfolio.

These income streams didn’t make me rich overnight, but they gave me something more valuable: financial stability and the ability to finally control my future.

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Breaking the utang cycle wasn’t just about money—it meant facing cultural expectations. Pakikisama (social harmony) often meant lending money to family even when I couldn’t afford it. I had to set boundaries while still offering help in smarter ways, like teaching relatives how to budget or showing them ways to earn extra cash.

I also faced skepticism. When I stopped spending on unnecessary gatherings or cut back on gifts, some thought I was being selfish. But I knew that prioritizing my financial health now meant I could truly help later.

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Years ago, I was buried under debt, wondering if I'd ever escape. Today, not only have I broken free, but I now earn a steady stream of income that allows me to live life on my terms.

One of the most rewarding moments? Being able to surprise my parents with a retirement fund. The same cycle of debt they had lived with for decades ended with me. Through smart credit card use, investments, and passive income streams, I didn’t just survive—I thrived.

If you’re feeling stuck in debt, know this: there is a way out. And not just out, but up. The key is to change your mindset, take control, and use the same financial tools that once held you down to build something greater. Your debt to passive income journey starts with one decision—to believe that you deserve financial freedom.

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