How I Paid Off $27K of Debt in 3 Months
When I graduated in May of 2014, I told myself I would pay off my student loan debt of $31,000 within 5 years. Fast forward to March of 2019 and I’m debt free!
If I was as disciplined in the beginning as I was the final 3 months, I probably could have shaved years off that goal. Instead, I got a car in 2016 which added $16,000 to my debt. I also got married to the greatest man I ever met. Thankfully, we were able to pay for our wedding with no loans, but it did take our extra money away from paying off debt.
Of course, there were emergencies and income changes over the 5 years. However, we lived by several principles in order to make sure we could eventually be debt free. We tackled the big 3 when it comes to expenses – housing, food, and transportation. We also saved like our lives depended on it (because it really could one day).
1. We Kept Housing Costs Low
After graduating college, I moved in with a friend and rent was under $500 split between the both of us. After a year, my then-boyfriend and I got an apartment and we split the rent of $650. Once we got engaged and combined our finances, we moved into an apartment where the rent was $450. The next year it went up to $480, but it was still the most affordable apartment complex in the area. Most one bedroom apartments would go for $650+ where we lived.
Mid-2018, we got the news that Mr. BLWAB would deploy in January of 2019. That stirred up a lot of emotions and changed the timetable we had for ourselves, but we found the silver lining in the form of our finances. In order to make sure he wasn’t worried about me and so we can save a lot of money while he is away, we decided that I would move in with my mother during his deployment.
I know everyone doesn’t have the option of living with their parents, but if it is available to you, take it. Most people feel like it’s a sign of failure or they worry about what people think if they see you back in your hometown that you swore you would never return to. Don’t focus on what other people think, focus on your goals and what you need to do to achieve them. If this isn’t an option for you, don’t pay more in rent than you should just so you can impress other people. We were able to make big strides with our savings even before I moved back home because of our low rent payments.
2. We Kept Food Costs Low
Meal planning was essential in keeping food costs down. I’m sure everyone can relate to driving home after a long day at work and just wanting to cruise through a drive-thru instead of going home to slave in the kitchen. To combat my after-work laziness, I cooked a lot at one time on Sundays so the meal could last for 2 or sometimes even 3 days. I would also use my crock pot to have something cooking while I was at work later in the week. When I got home, all I had to do was make a quick side dish to go with it. Mr. BLWAB isn’t a big fan of reheated food, so I never cooked a week’s worth of meals on Sunday.
Before cooking, I grocery shopped on Sundays. I wrote down what we were going to eat that week and went to the store – usually Aldi’s – to get just what was on the list, nothing else. By only going to the store once a week with a list, your chances of buying things you don’t need is greatly diminished.
3. We Kept Transportation Costs Low
Yes, I did purchase a car that added to my debt, but I made sure I made a “sensible” purchase. A 3 year old Toyota Camry with low mileage that I negotiated from $18,500 to $15,000. I put money down on it but I also got the warranty (that I never used and regret getting btw) so my total loan amount was ~$16,000. Cars are depreciating assets and I knew to achieve my financial goals, I shouldn’t spend much on it. Mr. BLWAB bought his car for $8,000 in cash when he returned from Afghanistan in 2014. That car was totaled in 2018 but we bought his new car with the $5,000 of insurance money he received as to not add to the debt. Now that my car is paid off, we plan on never having another car payment ever again.
4. We Paid Ourselves First
Every paycheck we got we put some of it into savings and/or the debt. This was a practice that was instilled in me at a young age. In high school, I would put every $20 bill my grandparents gave me into a piggy bank. When I finally broke it open after graduation, there was $3,000 dollars in there.
We put money into savings/debt if the money in our checking got too large. We kept enough in checking to pay the bills and daily expenses but that was it. Everything else went out of sight, out of mind. This method is what allowed us to pay my car and my student loans off with payments totaling $27,000 from January to March of this year.
Hopefully, you can adopt some of these practices (and learn from my mistakes) to pay off your debt in a time frame that works for your specific situation. Feel free to access the resource library of free trackers and forms to help you on your journey. If you want more personalized help on getting debt free, just reach out to me!
