If you're reading this, I'm earning money. Thanks for helping to feed my family. Please see our disclosure for more information. Also, any advice provided is for informational purposes only. I'm not a CPA, lawyer, or doctor, although my parents wanted me to be all three. So, talk to a professional before acting on anything you read below.
One of the great things about blogging is the chance to meet wonderful people and connect with them on a personal level. We have that today with Jodi. She commented on my article about how I paid off $20,000 in student loan debt and I loved her debt payoff story. She was kind enough to share her story in depth with me and she’s allowing me to share it with all of you.
I truly believe her experience to be inspirational and a testament to owning your own financial situation. Jodi took charge of her finances, did the hard, but necessary work of paying them off, and she’s staring at $67,000 debt payoff that is down to its last payment as I share this. A true inspiration. Please read Jodi’s story below.
I am 36 years old and live in New York City, where I have lived since college graduation in 2002.
In 2008, I earned a second degree to become a certified court reporter, which has been my full-time profession since.
I borrowed a total of $50,000 in student loans for both degrees. While finishing up my court reporting degree, I was working part time and going to school only at night.
At a certain point, after one of my very long and exhausting days, I reasoned out that I would finish school a lot faster (and therefore, be able to get a job in my intended field much quicker) if I began going to school full time instead. So, I decided to leave my job and focus solely on expediting my degree.
Looking back, I think this was one of the best decisions for me. It enabled me to get a job just ahead of the economy crash of 2008.
But, it also meant I had to live off of my credit cards for a few months while finishing up school without an income. Scary! And it sure did add up on the plastic.
I have always been practical -- not a big shopper, nor a frequent vacationer -- so debt has never been something I was comfortable with. My reasoning, though, was that accruing debt when I did was a means to an end in my life that would one day pay off.
With that said, it was not something I truly cracked down on until the last three years or so, when I moved into my own apartment. Prior, I had been living with my best friend for many years and sharing expenses.
Ironically, although my new situation was going to cost me significantly more in rent and bills, I used it as an opportunity to truly examine my finances in order to see how I could make them stretch farther for me. As a result, I became much more strict/smart with money management. I had to!
I didn't want to give up my social life entirely, especially as a single woman living in NYC, because I knew that I wouldn't be happy if I didn't allow myself a little bit of wiggle room. But, I began to be a lot more selective in events I chose to attend if they were going to cost money.
I had to get used to the idea of simply saying "no." If I didn't really, really want to go, then I didn't. Instead, I tried to focus on the positive feeling that I'd get from knowing that I'd spent $0 by not attending some of those more borderline events that I likely would've have been front and center at before.
You really have to get over the fear of "missing out" when you become serious about debt payoff!
This moment, for me, was that three-year mark where I moved into my own apartment. It was the right time for me to live solo, and I was truly excited about it, but I knew I'd also have to make some changes and sacrifices in order to get by.
So, I started to envision the freeing feeling that would inevitably come on future paydays when I could actually KEEP some of my money without feeling like there was somewhere more responsible for it to go!
From then, I began paying as much money as I could every month towards that debt, allowing my excitement at the thought of one day being finished to motivate me.
One of the first things I did was to start researching online in order to learn from others, which included reading personal stories and blogs (like yours!) This has helped me to truly see the light at the end of the tunnel by seeing others come out on the other side.
I also did use Dave Ramsey's Snowball Method before even knowing who he was or that that's what it was called. It just seemed so logical to me! I used this method in choosing to pay off my student loan debt for good before tackling my credit cards.
Yes, the student loan debt was "good" debt that carried lower interest rates than my credit cards. But, it was also a debt that was locking up $300 monthly payments from me.
So, since that total debt was far smaller than my credit card debt by this time, I decided to attack it full force as my priority. I figured out which of the loans had the highest interest rate and paid that off first, then the second, and so on.
Getting that "Congratulations!" email was like winning the lottery!
In the meantime, I had found a great 21-month 0% credit card offer, so I transferred my remaining credit card debt to that card. I learned that a credit card that offers a deal like this can be a very positive tool in debt management if you use it responsibly. I vowed to never make a purchase on this card and to only pay it down -- which I stuck to. It was reassuring to know that I had nearly two years where my payments would ALL go to the principle and not to interest.
I also cut cable and made my own antenna using a YouTube instructional video so that I could get the basic HD channels and news free. And I switched to a cheaper phone carrier that actually offered a better plan. These changes alone saved me about $120/month.
I then started following the "$5 Savings Plan," where you set aside any $5 bill that comes your way. Doing so requires you to be a cash user and not a card swiper, but I thought that using cash would likely make me more mindful in my spending anyway -- which it certainly did.
Putting aside all of my $5 bills wasn't "saving" me any money or making me any extra, but yet I found it very useful as a way to segment my money. This way, I could draw on it in those last few days before payday when things were tight, and it allowed me to avoid using credit at a time I might have been forced to before. I simply found it to be a fun way to create short-term savings for myself.
All of these strategies have led to the point where my next payment will be my very LAST payment towards my debt. I couldn't be more excited!
Despite being "only" 36, I am now turning my focus to how I can have a comfortable retirement, which I think is so important to start thinking about. The younger the better. I am fortunate enough to have a pension through my job, and now that my money isn't going to be tied up in debt, I also opened up a supplementary retirement account that will now get 5% of my paycheck as well.
Additionally, I did my research on the best savings accounts out there today and settled on the Barclays Dream Account, which offers 1.05% APY, plus incentive bonuses every six months if you continually deposit money and also keep it there. I plan to set up automatic deposits to that account so that I can finally start SAVING. Hallelujah!
Also, a vacation to celebrate my freedom from debt is in the works very soon -- once I can officially pay for it all up front.
My advice to others like me, especially if you are paying down your debt solo (many people don't realize how huge of a difference two incomes makes!) is: Get uncomfortable with your debt, and begin to imagine a time where your money can go to only the things that YOU want it to go to.
From there, take affirmative steps to make it happen, even if they seem small at first. Be conscious and be persistent and they will add up. It's 100% worth it!
What are your thoughts on Jodi’s story? Do you have your own debt payoff story? Please share it below. Get the chance to be featured on Run The Money!
5 Things You Absolutely Have To Do If You Want More Money
4 Steps To Take If Your Property Isn’t Selling
Useful Ways To Fund Your New Business Startup
Best Ways to Sell with Recurring Payments
Dealing With Major Personal Debt Effectively
4 Obstacles That Are Holding You Back from Making Money
The Path Of Recovery: From “I Can’t” To Full Body Potential
Why Trading Is The Perfect Side Hustle