Today we have an amazing guest, Jen Smith, a contributor to The Penny Hoarder. I’m not going to give it away, but check out what she and her husband were able to accomplish. Talk about inspiring! But even if it’s not inspiring, I want you to rest easy in knowing that all of us are on different paths to financial freedom. Although results vary from person to person, never think that it isn’t possible for you to achieve debt freedom too because as you will see from Jen’s story, it’s very much possible. All you need is a plan. Take it away, Jen…
I love reading stories about people becoming debt-free. I love learning how they got there, what they overcame and what they’re doing with their newfound financial freedom.
I get to be one of those stories now.
My husband and I paid off close to $78,000 in debt in less than two years. We didn’t get an inheritance, free place to live or have nice salaries with benefits. We just put our heads down and laid into it.
That’s why sometimes when I read these stories I can see how people can get discouraged. We’re all looking for the magic bullet that will get us to financial freedom quickly and without pain. But I’ll tell you, it doesn’t exist.
So I’ll share my story with you in hopes that you, too, can overcome the glamorous illusion that paying off debt is easier for other people. It’s hard for everyone. But there are ways to pull the Band-Aid off faster and establish a financial foundation you can be proud of.
Why I Didn’t Want to Pay Off Debt
When I graduated in 2012, I had over $50,000 in student loan debt and a job that paid me $10 an hour. In college, I was adamant that I’d work extra to get my loans paid off fast. But I was living paycheck to paycheck, and each payday felt like a deflating reminder I couldn’t do it.
And at that salary point, I couldn’t. So I ignored my debt. I switched to Income-Based Repayment and tried not to think about the interest building up on my loans.
Over the next three years, I got a new job, took on side gigs to make extra money and received pay raises, but still ignored my loans. In my mind, I still wasn’t making enough to “attack them.” However, I was making enough to justify a car loan, move out of my mom’s house and plan a wedding.
What Finally Convinced Me
When we got engaged, my fiance told me he wanted to pay off his $20,000 in student loans. It was the first time I’d told him I had $50,000 of my own and $7,000 left on my car loan.
I still thought we didn’t make enough to pay off the debt — he didn’t even have a full-time job at the time, and together we made less than $50,000. I thought it would take five years if we really struggled… and I didn’t want to live the rest of my 20s sitting at home eating ramen.
As we talked, I realized we didn’t have a choice: We’d struggle just as hard relying on student loan forgiveness for the next 20 years as we would leaning into the debt for the next five.
What finally convinced me was the freedom that was available if we had no debt. Building a life where money is invested in our present and future and not in our past was the motivation I needed to get on board.
The Struggle That Killed My Motivation
When we got married, we both found ways to make money from home and cut our expenses. After revising our budget, we realized we could pay everything off in two years. I could be debt-free and enjoy the last two years of my 20s!
But alas, everyone knows motivation doesn’t last forever.
Into the first year of paying off our debt, my husband lost his job… twice. I got a nasty case of shingles for Christmas, and the overwhelm of having to do this for another year filled me with dread.
The final straw was when we got kicked out of our rental house and decided to buy a house with no planning or savings. I lost all motivation to pay off debt as I recovered from the home-buying process while still maintaining my extra jobs.
How I Overcame Lack of Motivation to Finish Strong
In the beginning, I didn’t want to pay off debt because I “thought” I didn’t have enough money. Later we slowed down our debt repayment because I “thought” I’d lost motivation. But it was all in my head.
What kept me going through the end was the little stuff. It was making small payments every week, tracking my spending in the grocery store to stay on budget and finding free things to do on the weekend.
When I stopped thinking about my debt like a mountain to climb and just started taking little steps, I was on the other side.
A good salary and motivation are nice, but they’re not going to produce the financial future you want. It’s the little habits you do day after day that will make you wealthy or broke.
So, start replacing your bad money habits with good ones today. Before you know it, you’ll be over your mountain, too.
Jen Smith is a contributor to The Penny Hoarder, one of the largest personal finance websites with more than 15 million monthly readers. In 2017, the Inc. 5000 ranked The Penny Hoarder the 25th fastest-growing private company and the No. 1 fastest-growing private media company in the United States.