Debt Free & Financially Responsible
Minus my mortgage, I have ZERO (Yes, I said 0 bishes!!) debt. I fell victim to student loans, borrowing from my parents, credit card debt just like the rest of it. Here’s what I did differently. I removed the word victim and took care of business. I don’t like the word victim and I will never use it to reference any situation I am in moving forward. Ever.
In December of 2009, I finally graduated from college and was like “I AM DONE WITH SCHOOL FOREVER!” I was also a good student until alcohol entered and took over my life but gah damn I did it and finished. I got a B.S. in Kinesiology and wasn’t sure what the hell I was going to do with it but I was determined to not get my masters or PhD and get out into the working world. For the record, I personally learned more and gained more experience through my career than I did in school but that is neither here nor there. It did beyond frustrate me but nothing I can do about it now except use it as a lesson to propel me forward. Looking at the silver lining, going through college brought me to the exact place I am in now so for that I am grateful. With graduating and getting that piece of paper came with $75,000 in student loan debt, $4,000 in debt to my parents and $2500 in credit card debt totaling $81,500 in debt at the age of 22. Damn!!! For that cost I feel like I should at least have a master’s degree but nope. The huge mistake I made was taking out excessive loans to help me with living expense and then I discovered kegs and college pizza and that was a huge recipe for disaster. This was so damn daunting. Graduating college is supposed to be freeing yet I felt chained heavy to the ground.
I was thinking to myself that I have a mother f*$%&#ing degree in Exercise and an ungodly amount of debt. What job can I possibly get to ever pay that off!? I started personal training and working in research from 2009-2014 and still never missed a loan payment. No, I didn’t make great money, but it was enough to make my monthly payments and for a portion of that time I lived at home with my parents. Around a total of $80 dollars was going toward the principle payment out of my $575 / month payment. The first part of my debt I paid off was my mom and my credit cards since those were smaller balances it was easier to tackle. Literally and mentally. I knew this was just not going to cut it. I would have this debt until I was 70 or dead as it truly felt that it would never go away. I needed it to go away and I needed to change some things. (Speaking of change! Check out my blog post on change. It keeps it simple and helps provide a road map. Also, is very necessary: https://www.addictionofchoice.com/post/change-doesn-t-have-to-be-hard)
Take a Risk
In 2014, I finally got fed up with my job that I busted my ass for. I wasn’t going to make the progress I wanted to or live the life I desired to being a research assistant for a University making $36,000 / year. My boss at the time told me I would be good at sales so I began my research. I applied at a ton of sales jobs and the reason I chose that path was to take a risk and gamble on Sam. Putting the odds in my favor, gambling on my discipline, my grit and my passion. Sales is a career where you get exactly what you put into it. I was ready to grind. Ready to learn and ready to make a living that could pay of this debt and elevate my lifestyle. I landed a sales job that paid me the same yearly salary + commission. It was time to take a risk and go all in on developing my skillset.
Almost 6 years later, I am with the same company, have been promoted twice and am debt free. Obviously, there is much more to the story but let me explain how I got there. I intend to keep it simple but all in all to achieve some of the great financial success, it requires planning, sacrifice and budgeting. If that’s not what you want to hear, buck up, grow a pair of balls and power through the pain because living a debt free life is pure bliss and was worth all the damn sacrifice I had to make.
Know where the EFF your money is GOING
First, you have to know exactly where your money is going. If you don’t, shame on you! JK JK – just fix it. Calculate how much you bring home each month and first how much you must spend (rent, car payment, interest only loan payments etc.) and see what you have left over. If it’s not much, see how you can cut down some of your expenses. Down size your home. Shop at Aldi’s vs. whole foods and skip the Starbucks. These little spending habits can wreak havoc on your pocket book. If the gap is still small, find a second job. Wait on tables, sell some stuff on Facebook market, and anything extra you make you pay towards the principle balance of your loans. Listen, I know this may seem extreme to you but really ask how important it is to pay off this debt? Better yet, jump into the body of ‘Debt Free’ you and see how that f*%$^ing feels. Pretty nice right? Ok then, get the second job.
Skip the luxuries, pay more
So now that you know where your money is going, how much of it you have and all your fixed income, use the extra to pay off the loan quicker. Any extra bonus I got or anything I sold that I didn’t need, I put towards the balance of my loan. Now guess what? Anything extra I get now goes right into an investment or savings or a vacation because I HAVE NO DEBT TO TAKE IT ALL. I am telling you this again because the feeling and reward of not having debt far outweighs the sacrifices I made in the past years to make it all go away. I skipped vacations, eating out, mindless spending or shopping so I can live a life of freedom. In the end, at the ripe, young age of 33 – it was worth it. All those little spending habits add up! Do you know what adds up to $10,000? Spending only $27 / day. That is crazy!
Have some damn discipline
Just like with anything in life and to achieve greatness, this requires discipline. It requires saying no to friends, bringing your lunch to work, consistency and short-term sacrifice for long term reward. You have to think about what you want most rather than what you want now. If you start thinking about this in all avenues of your life, you can achieve great success in so many areas. Going through the repetitions of discipline makes things easier. Practice it. It will then get better with time! If friends invite you out for Happy Hour – say no. “Thank you for the invite but I have a lot to do tonight and am also trying to save money.” I promise you, they will respect it and understand. Communicate how important your goals are to the people close to you and they will offer you (hopefully) nothing but support.
To recap, all you need to do is this. Calculate how much you spend every month on your fixed expenses. This includes rent, car, insurance etc. The things you NEED. Then figure how much income you bring in per month and check out the delta (delta = difference between what your expenses are and the money you are bringing in. Once you have this evaluated, you have the power to increase the delta and this, my friends, can help out a ton! Pick up extra shifts at work, get a second job, sell some sh*t you don’t need or lower your expenses. You can lower your expenses by finding a cheaper place to live, down grading your car or eliminating unnecessary bills. Is any of that sexy? No. But think long-term vision and it will pay off! Last know exactly how much you owe in debt. I put this on a post it and stuck it to my bathroom mirror! Each time it went down, I put a new post it up. This is depicted in the picture above :) This helps you visualize it getting lower and smaller. This in itself this is a reward! I also will think in the mornings when I’m having my coffee and meditating about what it would be like to be debt free. This was extremely powerful and helped motivate me to keep going!
Financial Tip 101: Pay first, spend later
So, there’s that on what it takes and some good tips to get rid of your debt. I am really into finances and wanted to share another piece of advice. I’ve been financially successful and responsible but just like anything I talk about here on this blog, it’s a total mindset. You have to shift your mindset and think about the future, long term goals and have the desire for FREEDOM because that is what being financially responsible gives you. When you get paid, pay yourself first. If you’ve read any financial book every single one says this now what does it mean? It means that when you get your paycheck you take a portion that you can afford and put it in your savings or an investment. The goal is to not go back and touch this money but have it for a rainy day or a future purchase i.e. a house, car etc. You should take a little of your own money before anyone else does. Then you pay your bills and then you see what is left over. Most people get paid then they start spending and I highly recommend getting out of that rat race, that is, if you want to get ahead financial. In theory, you should have enough money socked away in case something happened to your job and you lost it. Enough money to cover your bills for 6 months. If this overwhelms you, start small, build the habits and if you are only saving $20 / month – that’s a hell of a start!
I hope you enjoyed this blog post as much as I enjoyed writing it!!! Please let me know your thoughts and what you want to hear at firstname.lastname@example.org
What are some small steps you are going to take to better yourself financially?