I’ve been managing my own money for many years—I’m 31 now, and have been financially supporting myself since I was 18. My parents live in Mexico, and I am in the United States. I worked at Barnes and Noble through my senior year of high school and graduated with that income. But I began to accrue credit card debt during my senior year because I didn’t have medical insurance. For instance, one short trip to the ER when I was sick with the flu cost me $2,500.
I also used credit cards to cover moving costs to college. Over the course of college, I was fortunate to get some scholarships to cover about 20 percent of the cost. To cover the rest, I took out loans and paid those off with credit cards. In 2014, I had around $70,000 debt from tuition and $6,000 in credit card debt. After graduating college, my debt kept adding up. My first job out of school required me to move and buy a car, which put my total debt around $90,000.
I started by paying off the credit cards first.
Although my first salary wasn’t very high, I did start chipping away at both my credit card debt and student loan debt each month. My goal was to pay only the minimum I could for student loans until I got rid of credit card debt.
I was careful about smart spending.
My general plan was to slow down my social life to a bare minimum and focus on spending smart. Every month, I would put aside money into a savings account that I would use only to pay off some of my credit card debt. I figured that the quicker I paid something off, the less interest would be accrued and the less money I would lose in the long term. My main strategy was to stay consistent with payments. I would make them often, multiple times a month, and focus on the highest interest loans first. By doing this, I got rid of all my credit card debt by the end of the year by putting $100 to $200 toward the cards with the highest interest every other week.
I got a boost to pay off the student loans.
In February 2017, I was offered a software engineering job in New York City that offered me a substantially higher salary than my first job out of college. I really began to attack my student loan debt. Not having that pay increase would have extended my debt for a few more years.
To pay the student loans, I really tried not to do any online shopping, and kept my life very light in terms of luxuries like new clothes—I invested only in things I needed. Some things happened by happenstance too. I had a friend who needed to move, so I let him move into my old apartment and it chopped off rent by 50 percent. Every month, I used that extra money to pay down debt. I made two or three payments a month and surpassed the minimum. For example, instead of paying $400, I ended up paying $600 toward student loans every month.
After six years of monthly installments, I finally paid off all of my student debt in August 2020.
What I learned while paying off debt
My biggest advice for guys looking to pay off their debt is to keep track of your monthly income and make a projection of how much you have to pay against debt over the next year. I remember sitting down in front of a computer crunching some basic numbers to see how much I would have decreased my debt by the end of the year, and it was a huge motivator.
Remember that the sooner you can get rid of debt, the sooner you can start buying things you have wanted. If you need motivation along the way, it’s okay to reward yourself after accomplishing a goal. But stay on track. During the quarantine, not going out or traveling also helped me put some extra income toward debt. And you should always look for a better job. Ultimately, the thing that helped me pay everything off was getting a job offer in a different city with double the salary. It took a while to happen, but when it did, it helped me put my strategy in overdrive.
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