Since June of 2018, I have paid off over $20,000 of debt…$21,647 to be exact.
I first wanted to start with a bit of background info:
Like many people, I started college at 18. I didn’t really think there was any other option for me, my money mindset had not developed at that point.
The first two years of college I lived on campus. A very expensive choice that I honestly don’t regret. I appreciate gaining the experience of being on my own and getting out of my comfort zone.
I had a GPA based scholarship throughout my undergraduate studies, but it only covered a portion of my tuition. Fees and living expenses were not covered, therefore I obviously took out loans. Whatever the scholarships and loans didn’t cover, my dad paid. I am so grateful my dad was able to help me out and allowed me to get through school as I did.
During my junior year of undergrad, me and my sister bought a house. Again, a very costly decision. I took out extra loans to make sure I had enough to pay my portion of the bills plus whatever else I needed.
I kept this up even through my masters. My tuition was actually 100% covered in grad school (except for fees) in exchange for me teaching an introductory lab. I also received a monthly stipend of about $750. I worked a part-time job since I was 16 years old. Aside from my freshman year of college, I continued to work part-time through school. However, the money I was making wasn’t enough to live off.
Or at least I thought.
By the time I finished my masters I was over $49,000 in student loan debt. I had no “real job” lined up, I just went full-time at my job at the time. I struggled A LOT that year.
Looking back, I wish I would have made saving a priority throughout high school and all of my college career. I spent so much money on clothes, make-up, and other beauty products, all of which I don’t even appreciate now. Instead of taking out unnecessary loans, I should of learned to budget and make ends meet. I’ve worked many, many hours and don’t have much to show for it.
Fast forward to June of 2018. The lease on my car was ending and I could either buy my car, lease a new car, or buy a used car. The cheapest option was to buy a used car, so I purchased a 2015 Toyota Camry for close to $19,000 after all the fees.
My total debt was now $82,200. This is when I started my REAL journey to becoming debt free.
I say real because I had been paying off my credit cards and student loans for about a year at this point, but I wasn’t taking it as seriously as I could have been. I still found myself spending a lot on clothes and other unnecessary things. Besides, the $82K was the largest amount of debt I ever had.
Why I’m doing it
It’s simple…debt is normal and I don’t want to be normal.
I think about my debt every single day. I spend hours each month crunching numbers.
I want my money to go to ME, not these lenders.
How I did it
I was living paycheck to paycheck (or going into further debt) just about every month in 2017. I started to save and pay off extra debt at the end of 2017 into early 2018.
I desperately needed to increase my income, so I finally got a “career” in my field of study in April 2018. Which definitely made paying off this much debt possible.
With this increase in income I was able to consistently put over $1,000 to my debts.
Since the beginning, I have always used the ‘debt avalanche’ method to pay off debt. Meaning I pay off loans with the highest interest rate first. This has saved me money overall and will continue to.
However, I can’t take ALL the credit.
The biggest thing was that my sister decided to sell our house. The value of it appreciated in value by about 80%. I actually owed my sister a few thousand dollars (which was part of my debt total), but in exchange for a lower cash payout for selling the house, she dropped that debt.
I also got $7,000 out of it. Almost all of it went to paying off debt.
I ended up moving into my own apartment in February of 2019. Rent + utilities costs me about $1500 per month. I’m much closer to work, but this decision would definitely set me back in paying off debt so aggressively.
The good thing was that I got accepted into Mediavine. An ad company that displays ads on my blog (which you can probably see now). I know it’s not the best way to make money, but a few hundred bucks each month definitely helps me out.
By March of 2019 I was credit card debt free and this is when it finally felt like I could make progress. My students loans gain a ton of interest each month, so making minimum payments for over a year barely helped.
After investing a bit into my blog and YouTube, I then started using that money to pay off extra debt (don’t worry I save/pay my taxes!).
I am now working on trying to save more and make a lot more! For me, I can make the biggest difference by making more money. I can only save so much.
Here’s a breakdown of all significant things that occurred over the last year:
- I bought a used car in June of 2018, which increased my car payment (lease before) from $200 to $315.
- In January of 2019 I got accepted into Mediavine, which more than doubled my ad revenue (tripled even).
- February 2019 I moved into my apartment.
- March 2019 I became credit card debt free.
- In March I also started automatic contributions to my Roth IRA ($100/month).
- In May 2019 I refinanced my car and lowered my interest rate from 6.79% to 3.85%.
I also wanted to mention how much I paid in interest over the year.
A whopping $3,295!
To be honest this makes me angry and drives me to keep going even more.
With just the interest I could have booked a whole trip to Australia.
That’s like a whole year of groceries.
I’m sick of losing money. My student loans gain over $5 of interest a DAY, now about $150 a month. Before it was over $170 a month!
It’s insane what these companies can get away with, but I know I’m responsible here.
This journey has not been easy. I wanted to talk about how I have felt, my thoughts, and my future financial goals and plans.
Paying off debt is one big roller coaster
I mention this in a lot of my monthly updates. It’s a ride that I’m going to be on for a few more years and it kind of sucks.
Some days I feel great about my finances. I feel a sense of ease and confidence.
Other days I feel stressed and frustrated.
In my [month] update I discussed how I don’t have a money problem. Which technically I don’t, I know that I will have money for my apartment, my groceries, my bills, all of my debt, and so on.
However, I find myself feeling negative about my finances quite often.
It never feels like enough.
In June I made my largest debt payment ever. I put an extra $1,402 to one of my student loans, on top of my $289 minimum payment. While it was exciting to be able to do, it barely felt like a dent in the total amount.
I also then tend to think about ALL the things I could do or invest in if that money was actually mine!
Trust me, I know those thoughts are pointless but it’s so difficult to push them away sometimes.
However, as much as I hate my debt I am actually grateful for it.
On my journey to becoming debt free and reaching financial freedom, I have learned SO much.
I am also super grateful that I started this journey in my mid-20s. I know a lot of people start later in life, and obviously financial gain is easier the earlier you start.
Paying off debt has kept me motivated. It has provided me a goal to work toward. Debt has become one big game…how much can I pay off this month? How can I earn more money to pay off even more?? How can I save the most on interest?
Paying off debt has continued to build my self-discipline and helped me realize what I really want and need out of life.
I used to want more money so I could drive a fancy car and dress in cool clothes. Now I want more money so I can live and give how I want to.
I never again want to struggle financially. I have lost sleep, I have cried, and I’ve felt hopeless many times before. This debt has inspired me to take control of my life and do what I have to do to never feel like that again.
I kept myself motivated by reading other people’s stories.
I’ve listened to HOURS of Dave Ramsey debt free screams, I’ve read hundreds of articles, and I’ve watched dozens of videos.
I constantly have been filling my brain with inspiration and positivity around finances.
I would learn how other people paid off their debt so quickly and how they pushed through.
I specifically loved to learn from people who did it on their own, as I am doing. While it is still VERY respectable, many people pay off large amounts of debt as a married couple.
I am single and can’t just live off of someone else’s income. Finding people like me gave me no excuses!
My financial goals going forward
Pay off another $10,000 of debt now through the end of 2019.
I want my total debt to be $50K or less by 2020. This means I really need to focus on earning more money because this will not be easy.
My expenses are quite expensive, which doesn’t leave me with a lot left over each month to put toward my debt. It’s going to depend on my online income.
I can do this!
I still plan on being debt free by April 2022.
I have less than 3 years to go and it’s definitely doable. If I can continue to save more and MAKE more money, I will reach this goal.
In 2022 I will be turning 29. I don’t know whether I’ll be at my current job or not, but whatever income I am making at that point I want to save/invest at least 50% of it. Ideally 70%.
After reaching debt freedom, my next plan of action is financial freedom.
I want to continue learning about investing.
I love learning about all the investment options out there. I’m definitely not an expert though and I want to learn as much as I can so when the time comes, I’m ready.
I invest WHAT I CAN while paying off debt because time is on my side. $100 per month is not that bad, and I can’t get back the power of compounding interest when I become debt free.
Time is on my side now and still will be in 3 years, but I still want to gain interest while I can.
I’m looking forward to being able to max out my Roth IRA and putting thousands toward investments in the future.
Becoming debt free will allow me to chase my dreams.
By the time I am 30, I want to be self-employed. Debt is a risk though and has the ability to hold me back from that.
I continue to work on my online businesses while I work full-time, because this allows me to build a base. I make a few hundred each month from my businesses, and I know this value will only increase.
By the time I am debt free, I believe I will have built a great foundation and I will have the confidence and means to work for myself. With all of my debt paid off I wouldn’t have to worry about those liabilities.
It’s easy to look at my current debt and feel discouraged. It’s easy to think I have a long way to go.
However, it’s pretty amazing to see how far I have come.
The greatest thing has been my mindset shift. I really want and believe I can do this. Paying off this amount of debt would take well over 10 years and I’m going to do it in FOUR.
That’s super exciting and I am proud I made this decision.