Conquering Debt - A Finance Coach's Story

Debt Free is the Way to Be!

In the United States, going to college is something that is considered the norm for most high school graduates from a middle class family background. You're taught that without college, you will likely end up a greeter at the local Walmart or flipping burgers at the local diner. You would think with that kind of mentality, there would be easier access to education for so many hopeful young students to be able to participate in an absolute necessity to succeed in life.

It was never a question for me that I would be attending college with the rest of my friends from high school. I prepared my whole high school career to get into the best college I possibly could. I took accelerated courses to get a higher grade point average, I participated in extra curricular activities like orchestra, editor of the school newspaper, national honors society, and varsity track so that I would appear to be a perfectly well rounded candidate to get accepted into my school of choice.

Even with ALL that preparation and hard work, I was only able to afford the state University that would be made more "affordable" to me through "in-state" tuition. When I was applying to colleges, the thought of student loan debt was not unusual to me. It was something that all students had to consider before deciding on a school. Some fortunate students were able to get scholarships, but most had to apply for federal and private loans to cover the insane costs of both tuition and boarding for 4 years.

I was lucky in the sense that my parents were willing to help with my education by paying for $10k per year towards living costs. I also decided to enroll in Air Force ROTC as they would cover my tuition of $10K per semester for learning about the military and possibly training to become an Air Force Officer if I stayed in the program. I was able to get two years of tuition waivers due to this officer training program. I also managed to keep my costs low by budgeting my daily, weekly, and monthly costs and moved into cheaper housing as soon as I was allowed.

I was extremely diligent in my budgeting as a young adult, but still when I graduated, I was faced with $50k of debt at varying interest rates between 5-9%. If I had been one of the more diligent budgeters and cost concious college students, I wondered how dire a financial situation that left other students. As soon as I could, I refinanced and consolidated my loans to ensure the lowest rate of interest I could get as a recently graduated, full time employee of a reputable CPA firm in Chicago. Every pay check, I put half of my salary into paying down my debt. It was painful and I didn't get to spend money on luxuries in those days, but paying down this debt gave me a sense of control over my money. I was proud of myself every month when I could see the debt balance go down bit by bit.

It took 3 years, but I finally became debt free. I then started saving towards retirement and for my education AGAIN when I decided to do my MBA in Spain. In that one year, I saved and invested to be able to put $40K towards my next round of higher education. The cost of my tuition for my MBA was about $35k per year for two years. And although it's cheaper to live in Barcelona than to live in New York City, it was still quite expensive to cover two years of incomeless living costs. Even with careful budgeting and cash flow monitoring, I ended my MBA with roughly $100K of debt.

Since I'd already done this debt dance before, I was confident in my ability to quickly pay off my student loan debt again. I started my job as a Sales Manager for a Telecom company in London. I went about getting the cheapest flat I could rent in a well located area, and I ended up finding a tiny hovel in a social housing block in Kings Cross for £700 per month. I was (again) able to put half of my salary towards paying off my debt and budgeting the other half of my salary accordingly. I used my company benefits to eat well while traveling for work and take advantages where I could. I racked up credit card points through work travel as well as free hotel nights. I saved on groceries by making easy and healthy meals and generally lived a no frills life for a couple more years until I felt my debt had reduced to a sufficient amount. Every bonus from work and every salary increase I negotiated for went towards paying off my loans.

This brutal strategy allowed me to become debt free in 4 years. I was helped by my higher earnings potential post MBA, earning extra money through side hustles, and continuing to live below my means. I went from living on survival mode to feeling self assured in my finances relatively quickly.

Even though my financial history wasn't particularly easy, I'm proud of myself for having navigated and conquered my student debt. I may not have been able to make luxury purchases or stay in amazing hotels while traveling, but my journey allowed me to be grateful and appreciate the value of money. Having mastered the ability to live a frugal life, I am now learning how to live an abundant life. I am now able to make investments that I would never have been able to dream of before. I can be my most authentic self and give money and my time where I see fit. I have financial freedom, and I am happy.

If you would like more information on managing your student debt, please feel free to book a free consultation!