You wake up and you don’t have to worry about the money you owe on your car, the money you owe on your student loans. You will finally be in control of your paycheck! Your feeling of freedom is not just about the numbers on a piece of paper, but the sense of being able to take risks, move to a different city, change jobs or just breathe and not have to worry about monthly bills.
That’s what it is like for some people when they decide to get serious about getting out of debt. Life becomes easier, your decisions become much less difficult, and your finances become a source of pressure instead of worry.
Interestingly, many people don’t realize that they can make dramatic progress towards eliminating debt in a shorter amount of time than they first think.
An Amazing Journey to Becoming Debt Free in Just a Few Short Years!
One young professional eliminated almost $30,000 worth of debt in about a year. The young professional accumulated the debt through an auto loan and student loan. These types of loans are the most common types of debt for young adults.
The impressive thing about the young professional’s journey to becoming debt-free was the speed and level of discipline that they had while paying of the debt. The amount of debt the young professional paid off in such a short amount of time took a significant amount of focus, budget discipline and a determined attitude.
Intentionality drove my journey from start to finish (and still continues) as I consistently acted toward my goal using deliberate actions over time.
How My Journey Started
I had no major financial issue pushing me to make this decision — only a general feeling of unease about having debt. When I graduated from college, leased my first car, and drove it off the lot, the thrill of owning the car passed very quickly after leaving the dealership. The thrill of excitement turned into a feeling of concern after realizing how much money I would have to pay each month, which was a large amount of money compared to how much I had to pay on other bills. I realized my debt created a disagreement between what was considered an accomplishment (buying a car) and what I was expected to do now that I had that debt (pay for the car for the next three years).
I started listening to financial podcasts, but what really made me rethink how I was treating my debt was after talking with coworkers who were aggressively paying off their own debt. They helped me see that I didn’t have to live with my debt for as long as the loan states. Knowing this made me do something else as a way to keep living without debt.
It helped motivate my journey.
Paying Off Debt Living on a Moderate Income
The most exciting thing about this journey is that I have done it without making a ton of money — my previous salary was around $48000 annually and now it is slightly higher due to various side jobs.
It proves that people can be debt-free even if they earn moderate incomes, so long as they control their spending and maintain a clear set of priorities for their lives.
The main objective of keeping expenses down and directing every available dollar towards debt each month was not a complex accounting problem, but rather one of repeated actions taken regularly.
The Budget That Made It All Happen
One of the biggest reasons this plan was successful was the tight, monthly budget. First, by finding roommates to live with, the rent payment was much more affordable. Therefore, housing expense was greatly reduced. In addition, food costs (grocery shopping), phone service, and insurance were monitored very closely.
Because of meal preparation and cooking simple meals, the price of groceries remained within a limited range from month to month. Likewise, many low-cost and quick-prep meals could be prepared easily such as chicken, rice, veggies, tacos, and homemade Mexican dishes kept the price of food to a minimum.
It wasn’t meant to keep anyone from living, it was meant to make intentions real.
In addition, a small amount of money was budgeted for entertainment to maintain a social life and a sense of mental well-being during this time of paying off debt in order to not experience total burnout.
Motivation Was the Biggest Challenge
Although paying off debt is not physical work, paying off debt is very much a mental workout.
Every paycheck represents an opportunity to give in to the temptation to use the money to do something fun instead of putting the money towards paying off your debt. As this battle continues, it has become the greatest hurdle to overcome.
Motivation can sometimes diminish, which necessitates having discipline in place as an alternative way of motivating oneself.
Staying focused and pushing forward becomes much easier when somebody remembers repeatedly why they began (when looking at debt from a perspective that limits your potential).
Establishing long-term goals becomes more important than establishing short-term pleasures.
Side Hustles Are Beneficial to Speeding Up Your Progress
Extra income has aided in accelerating progress. Many little side jobs provide additional income for the purpose of paying down debt.
Many of these side jobs are very easy to perform; for example, peer-reviewed research studies, completing Internet-based tasks or doing deliveries. Although they weren’t high-end jobs, they provided momentum to assist in paying off debt.
And momentum is very powerful!
In addition, having several hundred dollars additional per month significantly reduces the time required to pay off debt.
Strategies for Reducing Expenses
Food is the easiest area of expense reduction. By meal prepping at the beginning of each week, you are eliminating the number of times you will eat out and assisting yourself in maintaining your weekly grocery budget.
Creating smaller, inexpensive, and easy-to-reward yourself with snacks or simple treats can help you stay motivated, while still staying within budget.
This is a simple psychological trick; giving yourself small rewards will help keep you motivated as you work towards your larger goal.
Sometimes that’s the only thing you need.
The Unexpected Benefits of Paying Off Debt
One of the many unexpected benefits of the process of paying off debt is the personal growth that comes from it. Developing discipline, responsibility and confidence through paying off debt.
You begin to see that you can control your money and not allow money to control you. Many times this change in mindset can be just as valuable as the financial result.
It provides independence and a stronger sense of personal responsibility.
This change in thinking also carries over into other parts of your life.
The Most Important Thing to Remember When Paying Off Debt
If I could only give you one thing to remember when working towards becoming debt-free it would be that you must have a true desire to be debt-free.
If having debt is a normal part of your life, you will not be motivated to work towards becoming debt-free. However, once you realize how much debt can restrict your future, each payment you make will become very important to you.
You will then begin to see paying off your debt is a mission.
And once you have a good understanding of how paying off your debt will provide you with freedom, flexibility and peace of mind, it will be easier for you to stay on track with your goal!
Having that clarity provides you with the motivation to continue your journey, even during times when it’s difficult.
A Small but Powerful Reward
When you achieve your goal of being free of debt, it’s normal to want to treat yourself. You may want to spend a ton of money on extravagant trips and material things. However, a way to celebrate was to get my phone upgraded since my current one was about seven years old!
While this reward was small in monetary terms, it was huge in terms of being a symbol of my commitment to the process and the progress I’ve made.
This was not a “big” purchase, but I was able to treat myself responsibly for all the hard work that went into making my debtless self a reality.
Sometimes the simplest rewards provide the most satisfaction.
This journey towards debt elimination is not about being perfect or having an impeccable income; rather, it’s about having a clear focus on your goals, keeping your costs down, coming up with new and creative ways to increase your income, and reminding yourself daily of the importance of your goal.
The freedom that awaits you at the end of your journey may seem like it’s never going to happen; however, once you’ve paid off your debt, your money (and your future) truly belong to you!
