I'M DEBT FREE!! : The Details of my Financial Journey
As you can tell by the title of this post, I’m debt-free! I can’t explain how good it feels to say that. I have paid off a total of $37,567, which included student loans and auto financing, in about 18 months. Just a quick side note, I am not including my current mortgage in my debt-free journey as this is my starter home and I’ll probably sell within the next few years or so. I know you wanna know all about how I did it. So let’s start at the beginning.
Before even entertaining the idea of being debt-free as a possibility, my financial journey began with my budget struggles. I was fresh out of college and working in Corporate America with a salary that was more than enough money to support myself but still found myself living from paycheck to paycheck. I’d made the decision early on to auto-draft 200 dollars out of every paycheck and put it into savings but my money management struggles always had me dipping in my savings to cover myself until my next paycheck. Also being the oldest and having the highest income in my family, I struggled to manage the finances of my own household while juggling the responsibility of helping out back home. This cycle of mismanaging my finances went on for a little over 2 years before I had enough. One of my friends, Jynesia had already started her debt-free journey and I reached out to her to get an idea of things I could learn from her to help me in my own journey. She introduced me to budgeting and it was an absolute STRUGGLE initially but over time I started to get the hang of it. My real lightbulb moment happened when I began to track every expense. Numbers don’t lie and that expense tracker was telling all my secrets. If you say you want to build a 3-month emergency fund, save for Christmas gifts early, or pay off credit card debt, do your purchases reflect that? I’ve had to call myself out several times for being a budgetnista in the google sheets but trickin like I got it in the streets...that's why it’s called a journey. In one of the many budget sessions, I remember Jynesia mentioning the fact that if I continued to make my regular debt payments I would be in my early 30’s still paying off my student loans. I rolled my eyes in annoyance at the thought but the frustration of payments stuck with me that night, and the next day, and the next day until I finally gave in and asked her how I would go about paying off my debt quicker than 10 years.
And that’s when the debt-free journey started. One important thing I want to note is that there is no one way to obtain financial freedom. I believe the very definition of financial freedom is subjective. Before starting, it’s important for you to define for yourself what financial freedom looks like. For me, mismanaging my money and not having a hold on my finances was causing me a tremendous amount of stress and straining my interpersonal relationships. A stressed me is nowhere near my best me. I am not a numbers girl and personally view capitalism as inherently unjust and immoral. My desire to pay off debt has little to do with my desire to be successful under the guise of our capitalistic society and stems mostly from a wellness perspective. Large amounts of debt and poor money management increase my stress level which can produce a plethora of health issues for me. I say all of this to convey that you have to determine for yourself what stress your current financial predicament causes YOU, and how YOU want to alleviate it, if you care to. Not sure how to start? You can simply begin to write down everything you spend money on for a week, and then review those purchases the following week. Our purchases paint a picture of our true financial priorities.
Jynesia, who first introduced me to budgeting, is very much a numbers girl and had the drive and tenacity to go, what Dave Ramsey calls, “Gazelle Intense”. It meant and still means so much to me to still be able to enjoy my life so I took things slow initially. I still wanted to dine at restaurants occasionally, take one trip out of the country a year, and not feel as restricted overall. As I got closer and closer to the finish line, I found myself picking the pace up a bit because I was ready to get everything over with. As my debt balance got lower and lower, I was motivated to give more and more of my discretionary income to decrease my debt. The company bonuses that I would normally use to fund travel or large furniture expenses I gave entirely to my student loans. The trump check that dropped this year? It went all to debt. I’d had about $10,000 in savings and decided to drain it down to $1,000 to close out my student loan debt. Reducing your emergency savings to $1,000 and throwing the remaining cash at your debt is a method made popular by Dave Ramsey, but again you can decide to do things in the way that is best for you. I also want to note that I used the avalanche method to pay off debt, meaning I attacked my debts in order of their interest rate from highest to lowest. This method doesn’t have the prettiest view, as balances don’t show drastic changes as quickly as the snowball method, which orders debt payoff in order of balances from smallest to largest. In a rush to pay off debt quickly, a lot of folks pick up second jobs or sell large assets(cars, houses,etc.) and throw the profits toward debt. I think it’s important to note that I did not choose to take up a second job, sell my house, or car to pay off debt and you don’t have to either. The greatest asset you have to pay off your debt is the money you make TODAY. Any side hustles, upcoming raises, or secondary income are just icing on the cake. Recording everything I bought and trying my best to trim the fat is what helped me the most. It started off slowly, but as I got further into the journey I was willing to part more and more from restaurants, amazon purchases, and any other expenses that were eating up my discretionary income. When you comb through your budget and expenses you’ll decide for yourself what you’re willing to let go to increase your debt payoff.
When embarking on your journey for financial freedom, it is important to surround yourself with inspiration to propel you forward. Some of my closest friends were embarking on financial journeys of their own so it was great to have people around me who had similar goals. Maybe instead of brunching at a local restaurant, we would take turns having a potluck brunch at each other’s houses. My absorption of financial material increased exponentially. I loved watching YouTubers like the budget mom who shared their budgets and debt-free journeys online. I used their material as inspiration and motivation to continue the trek forward. I grew interested in how finances paid a role in the larger context which is how I developed my current anti-capitalist views. Once I grasped the understanding that the system we contribute to was not built for the masses to be free, financially, or otherwise, it really removed most thoughts of guilt, blame, and shame surrounding money. You just have to do the best you can.
The most amazing thing about pursuing my financial freedom is the ocean of possibility it has created for me. I have been unhappy with my current career field for a while but could not even consider the possibility of transitioning to another career with my finances in such disarray. Gaining control of my finances created the clarity needed to plan for my future. Because I have developed the skills to manage a budget and save, I now have the clarity necessary to craft a plan to change my current situation for the better. I am sharing my financial journey in hopes that I may dispel the myth that your current financial situation is permanent. You don’t have to share the goal of paying off debt but if you are stressed by the thought of money and struggle to understand your finances, creating a budget may be a great way for you to alleviate some of your stress. It can be quite daunting, but any start is a good start when it comes to embarking on your journey for financial freedom.
Please be sure to check out my previous post where I detail how I budget and track my spending.
Tell me below in the comments where you are in your own personal journey.
xo,
Tasia