I am incredibly lucky when it comes to my financial situation.
My parents paid for the majority of my college education, I have had a full-time corporate position since I graduated from college, and my living expenses are relatively low. In total, I think my monthly expenses are around $1,300.
But still, between $31,000 in student loans and $16,000 left to pay on my car, I have found myself $47,000 in debt.
The sad part of this all is that this is normal. I am actually in a relatively good position financially compared to others my age. Some have mortgage payments, families to support, multiple cars, credit card debt, student loans, you get the idea.
It’s almost as though we are taught to go into debt from a very young age and to work the rest of our lives to pay off that debt. We are taught that it’s normal to have student loans, it’s normal to have a car payment, and that it’s normal to be consumed by debt.
If you think that’s normal, well, then you were taught the same as me.
Now, it’s time to change that thinking. It’s time to do as Dave Ramsey says and “Live like no one else so that later you can live like no one else.”
The Beginning of Debt Repayment
No, this isn’t me trying to say “Watch what I can do” or “I’m going to pay off my debt because I don’t have much” or anything like that.
This is me starting a new journey in my life and working towards something that I think will better my life in the future. As somebody who stresses about money, the thought of someday being able to keep my entire paycheck excites the absolute sh*t out of me.
I want to share my journey to help inspire you to do the same – to pay off your debt and live debt-free.
No, it’s not going to be easy. Very rarely is life ever easy. But I want to show you that it can be done. We are going to do this together! You and I both are going to tackle our debt so that we can someday live like no one else.
Methods To Pay Off Debt
In order to pay off my debt in the shortest amount of time possible, I plan on using the snowball method.
The debt snowball method is a debt reduction strategy in which you pay off bills in order of smallest to largest, regardless of the interest rate. It’s more than a method for paying off bills. The debt snowball is designed to help you change how you behave with money so you never go into debt again. It forces you to stay intentional about paying one bill at a time until you’re debt-free. And it gives you power over your debt.
Most of us get into debt because of the fact that we think it’s normal and that there isn’t a different way. We tell ourselves that we’ll “pay it back once we get our next paycheck” or that “I’ll just pay minimums.” This is, of course, until you want the next thing you see and continue to go into debt until you stare up at a mountain of it.
Personally, I am tired of staring at that mountain. I am going to tackle my smallest debt first to gain confidence and momentum, and will then begin to tackle my student loans.
Taking The First Step To Paying Off Debt
Alright, so what does that look like? How do I plan on paying off my debt?
First, I put together a budget. I took my net monthly income and subtracted all of the recurring bills I have to pay. Between rent, student loans, a car, insurance, my phone, and a gym membership, I am paying a total of $1,339.57. That’s not bad considering others my age are paying that amount just for their rent or mortgage.
This leaves me with a remaining amount of $1,560.43. Some of that goes to food, some goes to gas, but for the most part, that’s about it. It’s not that I don’t have the money to pay off my debt. I’m just like the majority of everyone else out there and find different/unnecessary ways to spend my remaining money.
I’m not saying you shouldn’t enjoy life, but for me, the fact that I would be paying about $15,000 in interest on my debt over the next 10 years just didn’t seem worth it to me.
So, that’s what has me wanting to get going on paying off my debt as quickly as possible.
My Debt Payoff Goals
While I want to pay off my debt, I still want to have fun and make memories. That’s why I am giving myself 12 months to pay off my car.
I have a pretty good amount of money saved up that I am going to use to help get me going, I plan on putting any stimulus money towards my car payment, and then if I need to pick up a side-hustle on the weekend, so be it.
When it comes to my student loans, I want to have those paid off within 2 years of paying off my car, so 3 years from now. Is it aggressive to want to pay off $47,000 in debt in 3 years? For some people, probably. But I am always up for a good challenge and am the type of person that goes all-in when I put my mind to something.
I know I’m not going to be making $52,000 for the next 3 years. I expect that number to increase, and anything more than what I make now will only help me to pay off my debt sooner.
It’s Go Time
Some people are going to think I’m crazy for doing this and doubt that I will be able to achieve it. To that, I say “Watch me!”
If we continue to go do the conventional path that everybody else takes, we are going to live like everybody else – live in debt. It’s the strong-willed, the courageous, the bold, and the determined individuals who will achieve their goals and find success.
Wherever you are, don’t let anybody tell you what you can and can’t achieve. Be one of the strong-willed, the courageous, the bold, the determined, and create the life for yourself that you desire.
Michael Bonnell
Leave a Reply