Today, I’m excited to share a guest post from one of my favorite bloggers, Kara Perez. On her blog she shares her progress through her debt journey – so far she’s knocked out over $10,000 worth of student loans in less than six months. I asked her to share why she is so determined to pay off her debt so quickly.
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I’ve been lucky enough to do and see a lot of cool stuff. I’ve been skydiving over the Great Barrier Reef. I’ve climbed ancient Mayan ruins. I’ve been to Harry Potter World. I know about cool and amazing experiences. Far and away the best decision I have ever made though, was dedicating myself to getting out of debt.
My debt comes in the form of student loans. I graduated college in 2011 with $25,302 in student loan debt. I had a tough time finding a job after graduation and with a cross country move, a new city to adjust to and the expenses of living independently for the first time, that debt has stuck around for the last couple years.
September of 2014 I decided to get out of debt once and for all. I still had about $16,500 left on my loans at that point and I wanted to get out of debt as fast as I could. I was willing to go extreme with my measures too: this wasn’t going to be some half assed jaunt to the finish line but rather an all out sprint.
I set a goal of being debt free by December 2015. While that was more than a year away, giving me what seems like plenty of time, it was a lofty goal when you look at my employment. I work several part time jobs and make under $28,000 a year. Last year I was unemployed for three months and made a total of $20,000. Finishing off this last $16,500 was going to take a lot of work and dedication. But the thought of letting that debt and the emotions that come with it: stress, worry, annoyance, hang around my neck for another few years was enough to light and keep a fire under my butt. There were limitations on my life too: never being able to keep everything I earned, always limiting myself because I had to make a debt payment, never being comfortable being un-or-underemployed, were all because of debt. And I wanted those gone.
Eight months later I am proud to report I have only $5,108 left in debt and I am going to be debt free by August of this year! I have done everything I can think of to reduce my debt as fast as I can and it is working! What’s amazing to me though, is that as my debt decreases, my happiness, self-determination and self-esteem increase. Ridding myself of debt has made me a harder and smarter worker, a happier person and a more independent adult.
If you have any debt I encourage you to take action on it today. Don’t feel overwhelmed or intimidated by your debt or by your lifestyle. There are ways you can increase payments, I promise.
The first thing you have to do is take a long hard look at your spending. Your spending is who you are. When you see where all your money goes, you’ll see what it is you prioritize. Are you buying lunch three days a week? Is daycare sucking up all your money? Are you spending insane amounts on coffee shops and movie tickets?
Take the time to sit down and go over at least two months of spending. It may be painful and you may feel ashamed or embarrassed but this is the essential first step we all must take. And if you’re truly embarrassed, remember that I used to walk to the grocery store and buy a Twix EVERY DAY. FOR TWO MONTHS. It was my ‘treat’ that I ‘deserved.’ And it cost me $50 over just two months. Now that’s truly embarrassing.
The second thing to do is maximize the opportunities you have right now. It may seem like you don’t have any bonuses or perks to be squeezed out of your job (or jobs) but if you take a closer look there might be some. Does work offer free coffee? You should never be buying coffee out or drinking it at home during the week if so. Does work offer a discounted gym membership? Take advantage of that and drop the old full price one.
Personally, I work four different jobs and I squeeze everything I can out of them. The catering company I work for? I take home the leftover food at events and live off that for a few days. The coaching job? I get a 50% discount on sneakers through their athletic department. Taking a good look at your perks can save you extra cash!
After you’ve done these things it’ll honestly seem easy to save money. Some fast and true things I do that have made huge differences: walk/bike more, drive less. Re-negotiate cable/insurance/phone bills. Eat out less. Get friends together for clothing swaps instead of shopping. Use the library for books, movies and music. Hit up a local university for free speaker and screenings. Google ‘frugal lifestyle’ and see what other people are doing. Trimming even $50 a month and sending that money to your debt means an extra $600 paid off each year!
Working to get out of debt or to build up savings is working towards giving yourself freedom. There’s no better gift. I already have less stress, less worry and more happiness in my life. That makes all these little sacrifices completely worth it.