How I Paid Off $28K in Debt in Just TWO Years - It IS Possible

Dear Internet World,

I’m exposing my debt to you. Which is kind of a scary thought. It was something I was ashamed about, and I still do not openly feel comfortable discussing it with my family and friends to this day. I still have a ways to go, but I recently paid of one of my largest loans and I began to feel lighter and free.

Here is a graphical representation of all my debt over the last couple years on various dates. As you can see – I haven’t had credit card debt for the last several years, but what I DO have is student loans and I had a car loan. In 2012 I owed $54k – now I owe around $26k. I still have a ways to go, but I am very proud of having paid off $28,000 in just a fairly short amount of time.

Row Labels	School Loan	CitiBank	Osla	Sallie Mae	Toyota	Grand Total
9/18/2012	$               2,975.13	$  14,044.99	$  12,592.58	$  16,224.74	$    8,407.67	$    54,245.11
12/2/2012	$               2,892.32	$  13,977.97	$  12,411.70	$  16,149.72	$    7,953.63	$    53,385.34
1/20/2014	$               2,551.00	$  13,255.00	$  11,483.00	$  12,524.00		$    39,813.00
5/30/2014	$               2,373.00	$  13,152.00	$  11,188.00	$    7,050.00		$    33,763.00
11/21/2014	$               2,311.00	$  12,840.00	$  10,696.00			$    25,847.00

With every loan that I have paid off, there is no doubt in my mind that this is the way life should be led – debt-free. The first debt I paid off was my Toyota car loan, and then it was my Sallie Mae student loan which was over $16k! I paid off my car first because it was my highest payment amount every month at $300/month. A financial advisor told me that if I paid off my Toyota loan, that it would then free up that $300 for me to attack my other debts which had lower payments. After Toyota, the next loan one I paid off was my largest and worst loan I ever took: Sallie Mae. The reason I paid Sallie Mae next was because the interest was nearly 10%! How can companies be allowed to get away with charging students these kinds of interest rates when they are just 18-19 years old and starting out in life for the first time? You don’t get a house loan without a deposit; why would someone give you such a large sum with no credit history or down payment? 

Here is how I did it:

• Work bonus structure – my company pays me a quarterly bonus that is essentially guaranteed. My base salary is not that high for my industry, but my bonus is 20% of my income, and puts me at a very competitive overall salary. I put all of this bonus money to attacking my loans.

• Higher paying job – in the past, I struggled to find a good job. I finally got a job where they paid well and also had good benefits. I’ve held onto this job the last few years, and I am so grateful. There have been times where I struggled with earning enough. At one point after having my college degree, I was only making $12/hour. I don’t know how anyone expects a college grad to make a living off $12/day in Southern California.

• Company Stock Plan – Having a job that pays you well is the first step, but I have realized that benefits at a company can be very important as well. My company basically guarantees 15% on our stock purchase plan. 15% is a higher rate of return than the interest on any of my loans (especially after Sallie Mae is paid off). I invested as much as I could in these stocks and then cashed them out, and paid off my loans faster. I know many people in my company who did not participate in this plan because they could not “afford” it, but trust me – there is always a way to afford it! Also, if your company offers matching for your 401(k) that is also another free money opportunity you cannot turn away. Never turn away free money that you can get from your company!

• Cheap rent (for California anyway) – I have the most modest apartment of all my friends in the less glamorous side Los Angeles. My husband and I did a slight upgrade 6 months ago and moved to a slightly bigger place, but it’s a modest upgrade as well and only because we had to move for his schooling. My friends and colleagues who make similar income as me pay roughly $200-700 more in rent than I do. But honestly – I feel I have made my small apartments cozy and meaningful to me and my family anyway. It’s not how big the space is, or the location – but the love. I know that’s cheesy, but it’s really been true for me. I make sure my small space is clean, and I decorate it nice, and am very thoughtful about the atmosphere in my home. Though it’s small, it’s my sanctuary. They say to take pride in what you have and be grateful because there is someone who is happier with less.

• Side Hustle – my husband and I started a side business. We re-sell items on eBay. We aren’t raking in piles and piles of money, but it’s a good part-time income stream. We use the business money to pay our bills, and if that leaves me with extra in my checking account at the end of the month, it either goes to savings or to my debt. I don’t want to add this in as if this is not something that is hard work and requires effort. We work for it – so it is truly like having a part-time job.

• Tax Returns – I don’t spend my tax return at all. It goes to savings or debt.

My biggest advice would be that if you are working in a job that is not helping you get by and make a decent living, keep looking for a higher paying job. Money is not everything when it comes to a career, but working for a company that offers competitive pay and benefits makes a HUGE difference. If you are good at your job, you deserve to be paid a livable wage. (Not $12/hour, especially if you have a college degree). Whatever job you do now, there is another company paying more and offering better benefits. Keep hustling, and get paid the money you deserve.