“Focus not on what you earn, focus on how you spend what you earn.”Stephen Magnus
I was young, fabulous, and broke for as long as I can remember. Started out driving a Mustang at age 16, a Lexus at 17, and a second Mustang at 18. My parents gave us things that they never had. They pretty much gave me everything I asked for… on one condition: you have to get a job. Sounded like a pretty fair trade, because I always wanted to work so I could have my own money and buy my own things. As a 16-year-old, I thought, ” I get paid every 2 weeks, so I’ll just spend all my money because I’m gonna get more”. This is where the cycle of living paycheck to paycheck began.
Fast forward to age 21 where I’m a young, fabulous, and broke college student that rarely attends class, earns $350 every 2 weeks waiting tables, and takes out loans to pay bills. I put the remainder of the lifestyle I couldn’t afford on my mom’s credit card. On the bright side, I looked really cool pulling up to all the parties in my overpriced Mustang. Priorities…amiright?
University life didn’t tickle my fancy, so I decided to discontinue my college education (aka dropout).
Cue: The “S”-Word: STUDENT LOANS
Isn’t it amazing how quickly that 6-month deferral period goes by? The “your payment will be due soon” emails started rolling in, and adulthood officially started setting in. I borrowed $4,000 from the US Government to skip class and party. I went online, did some research, and learned that you can defer your payments for up to 36 months. I called up my friends at Great Lakes Student Loans and gave them the “I’m a broke college dropout that can’t afford the payments. Is there any way you can help me out please?” Of course, their answer was YES, because THE INTEREST KEEPS ACCUMULATING. Little did I know that $4,000 would turn into $8,000 in less than 2 years…
By age 23, I was about $16,000 in debt. I maxed out 3 credit cards, used a cash advance to get a tattoo, and still had $8,000 in student loan debt.
Then it happened…
I was rear-ended and my Mustang was TOTALED. Crushed like a cockroach.
I was heartbroken because I was about $4,000 away from paying it off. My heart healed once I received that insurance check for $13,000 (Actual Cash Value of my car). At this point I had two choices: Buy another car (aka go back into debt) or pay off my bills and travel the world?
If you know me, you already know I chose the latter. I gave my mom a nice chunk of money for letting me rack up her credit card over the years. I paid off all my credit cards and put the rest in my savings. I was still in denial about my student loans, but I figured I had to start paying them back eventually. I started out paying $50/month ($38 went to interest, $12 to the principal). I had $5,000 in my savings and $8,000 in student loans #Progress
In June 2015, I went and worked on a cruise ship in Hawaii for about a year which allowed me to reduce spending and save since they paid for our living expenses. We worked 7 days a week, 12-16 hour days, 5 months straight. NO DAYS OFF. Believe me when I say that working on a cruise ship isn’t nearly as glamorous as it sounds. This truly taught me the value of hard work, and that it doesn’t make sense to work every day and still be broke.
After Hawaii, I moved to Washington, D.C. with my boyfriend. I found a job at a diamond store and was earning $950 every two weeks. It was good money, but I wanted a bit more. I started working as a brand ambassador on the weekends making $20/hour. I figured if I could work seven days at sea, then I could work seven days on land. I started doubling my student loan payments from $50/month to $100. I was making progress on the principal. Soon my $100 payments turned to $200, $300, and so on. I paid off about 50% of my loan in one year.
Ya girl was on the right track, paying off bills, and becoming debt-free. In August 2017, I got bored with working 9-5 and the monotony of Corporate America. Your frugal friend thought it would be a great idea to quit her job to Teach English abroad in Nicaragua. I returned 21 days later with no job, 1/3 of my savings GONE, $2,500 in credit card debt, and $4,000 in student loan debt.
Cue: Pity party and job search
In between crying about my life and my money, it took me about three months to find another full-time job. Luckily I had my brand ambassador gig on the weekends and my savings to keep me afloat. I kept paying $50 to my student loans just to keep the ball rolling. After a few temp jobs, the diamond store hired me back, I got a second job working as a receptionist at H&R Block, and I had my weekend gig. three jobs = three sources of income. I was back on top! Surprisingly, the diamond store laid me off after the holidays because business was slow (although this wasn’t discussed when I was rehired). It was a bit discouraging, but I used that month to apply to jobs, set up interviews, and save some money. By February 2018, I was back to three jobs and was working seven days a week. At this point, I was putting at least $500 towards my loans, and saving $400/month. I was exhausted and felt like a zombie, but at least I was a financially stable zombie.
My job at H&R Block ended after the tax season in April 2018, I took a break from my weekend job and focused on my full-time job in the city. My boyfriend and I moved to a new place, took a few trips to Costa Rica and Cancun, life was good.
I began getting a little comfortable with how much money I was making at my current job. I was also enjoying not working 7 days a week. I started going out more, indulging more than usual, and having some fun. Next thing I knew, I was living paycheck to paycheck for about a month. Luckily, I came across this book when I was cleaning, titled Dave Ramsey’s Complete Guide to Money. It was EXACTLY what I needed to get me back on track. I withdrew money from my savings to pay off my credit card and my student loans. I stopped drinking for a month and saved over $200, I picked up a couple of weekend shifts, and also tracked every single penny I earned and spent.
On September 13, 2018, I made my final student loan payment and officially became debt free!!!! It’s so surreal and truly a blessing. It’s also a testament to what hard work and resilience are about. It wasn’t easy, but it was worth it. If I can do it, you can too. I earn about $2500/month (after taxes) from one job, which equals $30,000/year. There are people that are making five times my salary and live paycheck to paycheck. Keep in mind that it’s not about how much you make, it’s about how you spend it.
Please know that becoming debt-free isn’t easy, but it’s worth it. If you’re ready to be debt-free, click here to get started 🙂