My Financial Journey:
From $90,000 In Debt to DEBT FREE in Two Years
It was 2013 and I was graduating from my graduate degree program in Social Work, which I started immediately following my undergraduate degree program in Psychology and Communication, and I was in debt – upwards of $90,000 to be more exact. I was so excited to begin my ‘adult life,’ but I was also fearful of my future because of all of the student loan debt weighing me down.
I became steadfast in my goal to become debt free as soon as I possibly could. I read every financial management book I could get my hands on and scoured the web for financial advice. After what felt like endless research, I took the best of what I had learned and applied this newfound knowledge to my financial situation. One of the many things I did was to incorporate Dave Ramsey’s “Baby Steps” into my plan, and his advice changed my life.
From Baby Steps to Debt ELIMINATION
Dave Ramsey’s Baby Steps gave me a guideline of where to start, which was particularly helpful considering I was tackling such a large amount of debt – $90,000! When I began my journey to debt freedom I already had over $1,000 sitting in my savings account so Baby Step 1: One Thousand In An Emergency Fund was complete! I then began Baby Step 2: Pay Off All Debt (except for a mortgage). This step was not as easily tackled!
I started Baby Step 2 by listing my debts from smallest amount owed to largest amount owed and then began paying off my debts one by one using the “snowball method.” I took all the money in my savings account over the $1,000 emergency fund balance and put it toward my student loans. I began budgeting and created a plan to pay off my loans. I sent extra payments whenever I could.
I was motivated to pay off my student loans as fast as possible and therefore I made some sacrifices. I lived at home with my mother rent free (thanks, mom!), instead of living in an apartment with friends. I worked multiple jobs aside from my full-time job: I babysat and worked as an in-home mental health therapist, jobs I still continue today! And, I cut some of my spending: I didn’t go on any vacations – big or small, dined out less often, and cut out little expenses here and there that were small, but would add up fast, such as Dunkin’ Donuts iced coffees – if you know me, you know these are my favorite, whether it is warm or cold outside! I also took fewer trips to Target because everyone knows you can’t leave Target without spending upwards of $100 while still forgetting to buy the one thing you walked in there for (I still love you Target!).
It was important to me in my debt free journey not to cut out all of the fun. Therefore, I personally chose which sacrifices I was willing to make, such as cutting out random iced coffee breaks, and which things I wasn’t willing to budge on, such as occasional date night dinner dates.
Fast forward two years and in 2015 my student loans were PAID IN FULL. I can’t even begin to explain how great it felt to press ‘send’ on my final payment! I was DEBT FREE only two years after graduation! All of my efforts had paid off!
Why Debt Reduction Is Worth The Hard Work
The road to debt freedom isn’t easy. The journey can seem overwhelming, confusing, and even scary. I get it – I’ve been there! There are no ‘quick fixes.’ Getting out of debt takes a lot of hard work, patience, and the ability to keep pushing yourself forward.
In my journey to debt freedom I had phrases that I would repeat to myself for motivation, such as: “Just keep swimming!” and “What would Dave Ramsey say?” This second phrase was particularly important for me because even with all of my endless research there was hardly any advice out there for people just starting out in their adult life with debt. So much of the advice out there is for more established people with mortgage, wedding, childcare, consumer, and student loan debt. I needed advice tailored to someone who had debt they wanted to get rid of, but was just starting out in the working world – all of those milestones still ahead of them. I needed advice on how to get out of debt while also saving up for my future goals, like affording a wedding sometime in the near future or moving out of my mother’s house. I needed advice on whether or not I should be putting money towards retirement in my situation. See! I told you I understood! I was overwhelmed, confused, and yes, I will admit it – scared! However, I did it! I figured out all of the answers to those questions and I became debt free. And, I realized I could help others become debt free too.
My student loans were a huge burden on my shoulders and they made me feel stuck and hopeless. Back in 2013, at graduation, I didn’t have a job offer yet and I was entering the social work field where we are underpaid. I was worried about how I was going to afford to live while carrying all of this student loan debt. I hated the idea of my student loans being around until I was in my 30s, 40s, or even 50s. I wanted to eventually marry my high school sweetheart, but I wondered how we would afford the wedding with my HUGE amount of debt. That was when I got angry at my debt and I kicked it to the curb – little by little.
Shortly after I became debt free I got engaged to my high school sweetheart and we paid for our wedding – in cash – in 2016. If I hadn’t started – and finished – my debt free journey prior to our engagement, paying for our wedding in cash along with continuing my debt snowball would have been a struggle! We are now saving up a down payment for our future first home together, a down payment we will pay for fully in cash! Again, all possible because we are debt free and we didn’t allow ourselves to get into debt while paying for our wedding.
Now that I am debt free I know firsthand that getting out of debt is possible – no matter how sizable your debt is. HELLO I paid off more than $90,000 in two years on a social worker’s salary! I know the freedom that comes along with being debt free and I live that reality every single day now. There are so many things you could be doing with your money for YOU. How does a fully funded vacation sound?! Or the freedom to be a stay at home parent?! So, stop giving all of your hard-earned cash away to creditors so you can win with your money. The first step is Baby Step One – so, what are you waiting for?
Want to do what I did?
If you want assistance on your debt free journey, email or text Fostering Greatness today to set up a free consultation with me! I can’t wait to guide you to debt freedom utilizing the same steps I took to become debt free.
Already debt free? Well, look at you go! Now it is time to plan for the next step in your financial life. I can help you manage your finances and reach your financial goals, whatever they may be.