From that point forward, my goal has been to eliminate that debt as quickly as possible while maintaining my sanity.
For some people, that means eating ramen noddles, no cable, no drinking, and no fun. I can’t live like that, man! So, I did what (seemingly) most people my age did… I lived with my parents. It’s definitely not ideal for your social life, but hey – it sure beats eating ramen and living in a studio apartment with no TV.
While pursuing a debt-free life over the past four years, I’ve been able to go on plenty of vacations, go out with friends on a regular basis, and (finally) move out of my parents’ place. So far, I’ve paid off about $125k.
How I’m Pursuing a Debt-Free Lifestyle:
I’m not the type of person to brag about how tight my budget is. Having a mountain of debt is enough to worry about. If I sacrificed any more happiness by refusing to have a couple drinks, I’d have a mental breakdown.
Doubling my salary over the past four years has also been a huge help in paying off my debt. The hard work that’s gone into that is a huge part of my success in this journey thus far. Never forget about that part of the equation – it’s not all about cutting costs. Making money is part of the game too, people!
Student loan balance: $20,197
When I graduated college, I must’ve had seven different loans to take care of, so it’s nice to just have one now. I’ve consolidated twice and this one was done with LendKey at a 3.15% interest rate, which I’m very happy with.
Since my salary allows for it, I’ve always elected for loans with the shortest payoff period, in order to get the lowest interest rates. This means higher monthly payments (the required minimum payment on this is about $500 and the one before this was $800!), but I’ll pay about $3,500 per month into this until the balance is gone.
I can’t wait to put my student loans behind me for good!
Bank of America balance transfer (from student loans): $9,702
If you haven’t noticed, I have an aggressive strategy for paying off my debt. And I don’t like interest slowing down my progress.
This past summer, I finally took advantage of a balance transfer offer (I think I get like five offers a week – no kidding). This allowed me to move $10,000 from the LendKey loan to a 0% interest card until next July. This will help me save on interest payments on my LendKey account, which is nice.
If everything goes smoothly, I’ll be able to pay off the LendKey loan and then wipe out the balance on this balance transfer before the interest kicks in. Score.
Car loan: $15,154
I wasn’t sure how long I’d be living at home after I got my first job. The plan was to live there a couple years, put a big dent in my debt and then move into Boston to be closer to work. So, I got a three-year lease on a car about a year after graduation.
If you’re one of those people (you know who you are), I get it. Probably a bad deal. The way I looked at it, it was $0 down, I wasn’t driving it a whole lot, I probably wouldn’t need it in three years, and if I had to buy it, so be it. Well, that’s exactly what happened when my lease expired this past July. Instead of moving to Boston, where I might not need a car, I ended up moving to Pittsburgh. Plus, I get a car stipend for work, so I kind of need one.
So, I have a $15,154 car note with 3.99% interest. Although at some point it’d make sense to stop paying so much on my LendKey balance and switch to this when the interest payments for the car become higher, I’m just focused on finishing off my student loan debt for good. I’ve come this far – I just want to be done with it.
Once that’s all clear, I’ll pay off my car in a couple months.
Why Live Debt-Free?
If you asked me this 5 years ago, I probably wouldn’t know what to say. I’d probably mention something about debt being normal as long as you can keep up with it. Being $170k in debt has definitely changed my mind over the past couple years.
Although I’ll take on debt again for a mortgage at some point, I want to experience the freedom of being able to do what I want with my money. Truthfully, I can’t wait to invest it in stocks, real estate, and who knows – maybe some businesses.
Have you considered living that debt-free lifestyle? What obstacles are in your way? Let me know in the comments!
All opinions expressed on this blog are solely those of Home at 30 and are in no way affiliated with any other organization or institution. The purpose of this blog is to give general education and information about investing, wealth, careers, and college; It is not intended to be professional advice.
Author: Josh Ramos
Josh attended Wake Forest University and paid a fortune for it. Since then, he’s realized the obstacles that Americans face in moving up on the ladder of wealth. By founding Home at 30, he wants to help students learn the skills necessary for taking the next step on their journey to building wealth.