Today will mark the first day since I was 16 years old that I don’t have to worry about making a payment towards debt or have debt at the center of my plan/decision making, and that’s because… drum roll please…
I am officially debt free!!!
I have made the last payment towards any debt in my life, today, September 28th, 2018! This morning I submitted a payment of $3,590, the total remaining amount due on my last student loan, all in one large lump sum payment to officially pay off the last remaining balance of my debt.
Over the past 2 years and 9 months, I have paid off approximately $57,000 in debt. For those of you that don’t know, I started my debt free journey back in January 2016. At that time, my debt consisted of a car loan, credit cards, medical bills, and student loans. The most significant portion of my debt consisted of student loans, one of which was in default.
Take a walk with me down memory lane, back to 2006, when I took out a $20,000 student loan for one year of undergraduate studies, at an out of state university. I was young and naive for wanting to go to school out of state, while I had a 75% paid scholarship via the Florida Bright Futures Scholarship program in my very own home state. Fast forward to leaving that out of state university after one year because it was just too freaking expensive (my senses eventually kicked in). Then, in February 2016, reality smacked me in the face—I received a summons in the mail. The summons was issued by the State of New York to answer a complaint (aka you’ve been served) on an action that was taken against me for defaulting on my student loan.
Quick side note, a month prior to this very troubling and stressful time in my life, I had officially proclaimed to the world that I would start tackling my debt with the goal of becoming debt free. What began as an amazing time was temporarily derailed by receiving this summons a month after announcing this goal of mine. In January of 2016, I proclaimed to the world that I was ready to tackle my debt head-on, and had already paid off my car—the first debt I focused on.
At the time I felt a sense of drive and encouragement, and began to develop a budget plan to get my finances in order, then WHAM!!! Lawsuit. There’s nothing like a good old lawsuit to derail your plans and pop your balloon. I always say the universe has impeccable timing because if I had been sued even a few months before, I probably would have had a nervous breakdown, simply because I WAS FLAT BROKE! I got summons during tax and bonus time, so in a way I lucked out… kind of.
By February of 2016, the $20,000 student loan I took out ten years earlier was now somewhere around $31,000. It was a time when everything seemed hopeless for me—I was looking down the barrel of a loaded debt gun, with the odds stacked against me and less than $3,000 savings.
Thankfully, I managed to use that little bit of money I had saved from my tax return and bonus to hire a great NYC lawyer that bought me some time to pay this debt. I won’t go into ALL of the long boring details as it relates to this lawsuit on this post but just know there is way more to the story. In short, the loan originally was defaulted by the lender when I was a full-time student in school, and that alone would have allowed me to fight this tooth and nail in court, but I digressed. Needless to say, this debt and time in my life is dead and gone.
Once my student loan was taken care of, and my car was officially mine, it was time to tackle the rest of my debt. I had accounts in collections I wanted to clean up, credit card balances, and $18,000 in loans (1 unsubsidized and 1 subsidized) from Navient.
Auxerre So how did I do this in 2 years and 9 months?
Let me start by saying I am in a firm believer in the fact that making more money won’t necessarily help anyone’s situation if you aren’t already managing the money you do have correctly. You can make a million dollars, spend a million dollars, and have absolutely nothing to show for it. Equally, you can make $35,000, manage it well, and have $10,000 saved. With that said, I’ve always been clear about the fact that I make what I consider to be decent money because of the industry I work in, which is finance.
Having a good job, good income, and the chance at a bonus every year has definitely helped me along this journey, but I must add that it has not been what’s gotten me to this point.
Steps I took to pay down debt:
1a.) Budgeted
Budgeting for some means diet, but for me it meant understanding what money was coming in and what money was going out, so I could assess and stop the bleeding. Once I knew how much income I was bringing in and roughly how much my monthly expenses were, I put a budget in place to better manage those cash inflows and outflows.
1b.) Cut Expenses
I looked for areas that I could cut back on, and also for areas/expenses I could have eliminated entirely, like cable for example. I cut back on eating out, and I also started meal prepping and bringing my lunch to work. These small adjustments in my lifestyle had a compound effect on the extra money I was able to squeeze out of my budget to put towards debt, and over time it really started to add up.
2.) Practiced Consistency
I didn’t just bring my lunch to work for a few weeks then stop, I consistently made an effort to meal prep because I knew over the long haul, it would save me a ton of money and help me pay off debt faster. I also consistently worked on and tweaked my budget plan to the point of obsession. I was always trying to figure out how much debt I would be paying off in that given month and what gigs I could pick up to help me hit a target goal. I consistently said NO to things that took me away from my goal or off track when it came to my budget. I consistently worked the cash envelop system and even developed my own way of doing it. I consistently stayed away from clothing stores and anything that would tempt me to impulsively spend money.
Consistency in your habits is the 2nd largest key when it comes to tackling debt, with the 1st being a written budget, but honestly, consistency is probably one of the hardest things to master on this journey. It’s kind of like that quote “if it was easy everyone would be doing it” and it’s true, having a good income is great, but it’s not everything.
If you don’t feel like you have a great income or feel like you only have a tiny shovel when it comes to tackling debt, trust me, you’re not alone. It’s important to fine-tune your small habits and things in your immediate control can and this WILL have resounding effects on your current situation. Don’t let having a “not so great” income discourage you, keep you in an excuse loop, or be the reason for not accomplishing your goals.
3.) Hustled On My Side Hustle
I’ve always dabbled in photography, but when it came to being sued, I got pretty creative real quick and got serious about my photography as a side hustle. Friends and family would reach out to have me take their photos, and it just grew from there through word of mouth. To be clear though, I wasn’t rolling in dough when it came to this side hustle, but every bit helps. I figured I needed a way to increase my income in a short amount of time and the best way I could do that was to hone in on the skills I currently have.
4.) Started Saying NO
I am a firm believer in balance, and while I practiced saying NO, I didn’t say no to everything, but I did say NO to a lot of things. I get it, we all get FOMO from time to time, myself included, but my desire to fix my situation triumphed anything that seemed super fun at the time. I was consistently stressed with the weight of a lawsuit looming over my head, so anything we did that was remotely fun, I had this lawsuit playing on a loop at all times in the back of my head, which ultimately took me away from the experience.
Delayed gratification and saying NO on this journey have definitely kept me focused and have actually helped shift some of my habits. Like I said earlier, I stayed away from stores that I knew would lead to impulsive spending, but that was partly because I started saying NO to myself. I understood early on that this journey would require a lot of patience and self-control, two things a lot of people in our society struggle with, and because of that, I was determined to beat it.
5.) Didn’t Let Discouragement Stop Me or Be An Excuse
Getting sued, having debt, and having zero savings sucks! Having to consistently do the same thing over and over for 2 years and 9 months is also not easy, but I didn’t let any of that stop me. You have the choice to either let a setback keep you back or use it as a stepping stone. I chose not to let any of the setbacks I’ve experienced since I started this journey deter me from my goal to become debt free.
Once I got serious and clear about what I wanted and WHY I wanted it, everything else was so trivial in the grand scheme of things. I got sued, fine, big deal, I had to put my big girl pants on and take care of my responsibilities as an adult no matter how scary it seemed. I could have easily given up, especially because I was only one month into my journey, but I CHOSE not to. I chose to let my goal be bigger than my fear, and it got me to where I am today.
In short, this journey has been truly amazing, and I wouldn’t change one bit of it for the world. The growth I’ve gone through and habits I have picked up from all of my fumbles and accomplishments throughout this experience have been priceless. From the people I’ve met, the knowledge I’ve learned, and the person I’ve become because of all of this, has been invaluable to me.
So if you’re on the fence about starting, feeling overwhelmed, or just don’t think it can ever be done, I’m here to tell you that it can. Imagine yourself taking these silly pictures one day and telling your friends about how much debt you just crushed, and then GO DO IT.
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Melanie Smyth says
Oh my god, funniest photos! Love it. Congratulations! Awesome following you on this journey!
Carmen says
Thank you! I got a few “these are cute” photos but I was totally shooting for obnoxiously funny lol, so thank you!
Kristina says
This was such a great and motivating post! I’m so inspired! Get it girl!
Carmen says
Thank you! I’m glad you enjoyed it and also found it motivating! Hoping to inspire others.
J. Money says
Work it, girl! Huge accomplishment!
Carmen says
Now I feel like I’ve made it! J.Money coming on the blog to say congrats! I’m honored!
Angela @ Tread Lightly Retire Early says
This is so freaking awesome. So well done!!! And I love the photo shoot ❤️
Carmen says
Thank you Angela! I tried to go above and beyond with the shoot 🙂
Little Green Revelation says
This is amazing!!! Congrats!!!
Carmen says
Thank you! Honestly, I feel the same, just a different kind of happy and it’s been incredible.
Jerry Stewart says
That is so “AWESOME” good for you! 🙂