Hey everyone! Today I have a guest post for you from Kyle over at DollarDilligence.com. He's got a similar debt payoff story to mine, and I thought you'd all enjoy seeing some different strategies other people are using to get out of debt. Enjoy! ~M$M
I paid off $33k of debt in 18 months on a teacher’s salary! It didn’t just happen, and it came with sacrifice. I’d like to share with you a few “extreme” things I did to get out of debt.
How the heck did I do that, and what kind of debt was it?
Very simply stated, I was normal, far too normal. I graduated college with around $40k in student loan debt and just lived a normal life for about 6 years.
That's when I woke up. I finally figured out that if I wanted to be successful with my finances I could not continue to be normal. I started a financial plan and was laser focused.
The next time I looked up, I was debt free! I paid off $33,000 of student loan debt in 18 months. I didn’t do it without being a little bit unconventional (read my full debt free story here.) Some of the things I did to pay off debt were just plain crazy. I mean nuts, psychotic, looney, you get the point.
This list is not all-inclusive, but here are a few extreme things I did to help pay off debt:
Down to the Cent Budgeting
I had experimented with a budget before, but this was different. I used budgeting apps and spreadsheets and tracked every cent! I did whatever I could to cut corners and be an extreme cheapskate.
I tracked everything. I tracked $0.32 fountain pop purchases (1 cent per ounce on Friday’s baby!). I used the envelope system and paid cash for nearly everything. When I ran out of cash, I was done spending for the month.
The number one thing that contributed to me paying off my debt this fast was the budget.
I lived in my sister’s basement
I was single, and pretty much lived with roommates throughout my 20s, but I found myself in a difficult situation while paying off debt.
When I got engaged, I knew I was going to live with my fiancee the following summer after she graduated from her nursing program. The problem was, this was 7 months down the road. My lease was up in the rental unit I had been in for several years with roommates. It was relatively cheap, but nothing extreme and we had to move.
I had two choices: rent month to month at an elevated rent rate because I didn’t want a lease, OR I could swallow my pride and live in my sister’s basement and save a sh*t load of money (that’s a lot for those wondering).
Yea I lived in the basement. My younger sister’s basement.
It was honestly a difficult decision, and I felt like a complete loser at first.
Looking back on it? I really don’t care what conventional wisdom says about living with family or friends or whatever. I didn’t and don’t care what people say. It worked out well enough for me, and I figure I saved anywhere from $3-4k in the end.
Luckily I get along great with my sister and her boyfriend, and it really turned out to be a great move.
Don’t get me wrong, it freaking sucked at times. The times when I wanted to eat dinner and had to wait for the kitchen. The times when I wanted to shower/use the bathroom and I had to wait for the bathroom (they only had 1 for a short time while remodeling). The times I wanted to not walk around on eggshells.
As much as it sucked, I’d do it all over again in a heartbeat. It accelerated my debt payoff by nearly 3-4 months in my estimation.
Do you know how much people spend on food per month? It’s insane! While paying off debt, I was down to $100 a month on food. This includes dining out (which didn’t exist to me).
As my boy Dave Ramsey says, “The only time you should see the inside of a restaurant while you’re in debt is if you’re working there.”
My fiancee was extremely supportive of this, but it was tough to stay under $100.
I ate the same meals repeatedly. Every week. I ate oatmeal for breakfast. I ate peanut butter and jelly sandwiches every day for lunch. For dinner, I ate deer (I hunt), rice and beans, spaghetti, or some kind of breakfast concoction.
It likely was not the healthiest diet, but I’ve honestly hardly wavered from this meal plan. Now that I live with my fiancee, our food budget is higher, but not by a ton, and I still eat pb&js every damn day.
I challenge you to track your food spending for 1 month. Keep track of everything you spend on groceries, at gas stations, coffee, and restaurants. Add up the total at the end of the month. You’ll be shocked.
Don’t eat your paycheck.
Budgeting, living in a basement, and saving money on food were the most important decisions I made while paying off debt. That being said, they weren’t all I did.
A few more things that I did really added up and helped me destroy my debt:
- Side Hustled my a$$ off (worked evenings, weekends)
- Sold on Craigslist (scary and addicting)
- No new clothes, ever. (True story, I wore 1 pair of pants to work for about 5 straight years)
- Never went out to eat, drink, etc.
- Said NO. Trips, parties, etc. Just say NO. It’s very powerful, and you’ll likely not miss out on much! #FOMO (my students taught me that #FOMO means Fear Of Missing Out) I do not have this disease LOL.
So that’s it! When I finally became debt free, I loosened up a little. However, the habits I developed while paying off debt will stick with me for the rest of my life hopefully, and set me up for a financially successful future.
Although it was honestly hard at the time, I am glad I finally decided to bust out of debt. It was a lesson that will stick with me forever. Stop paying others with car payments, credit cards, or student loan payments. Start paying yourself first and become debt free.
Kyle is a personal finance blogger who paid off $33,000 of student loans in 18 months! His goal is to share strategies, tips, and tricks for getting out of debt and saving money! Check out Kyle’s blog at dollardiligence.com Follow him on Twitter @dollardiligence.