Welcome back to our Debt Free Living Series! This week we were super excited to interview David (one of our personal favorite finance bloggers) about how he was able to pay off $18,000 in debt.
The crazy part is he did this in just 54 short days!!
Let’s find out how he was able to tackle paying off nearly $20,000 in such a short time frame.
Tell us a little bit about yourself!
My name is David Cahill, and I founded FinanceSuperhero, a personal finance blog, in 2016. I’m a public school teacher by day, a real estate agent in the evening and weekends, and most importantly, a husband and father.
Today, I live with my wife and son in the Chicago suburbs, but I remain a 100% Michigander at heart.
I’m a musician and teacher by trade, but I discovered additional passions in personal finance and real estate after my wife and I got married in 2010. We studied the teachings of Dave Ramsey through our church, and it didn’t take long for me to catch personal finance fever.
And you might say I’ve always been a real estate agent at heart – I used to watch the local real estate listings TV channel when I was only 7 years old!
How did you end up in debt and how much debt was it?
Despite earning enough scholarships to cover my pricey private college tuition, I still found myself in around $18,000 of student loan debt after 4 years. I worked part-time in college while averaging around 21 credit hours per semester, but my earnings just weren’t enough to cover room and board.
What was the turning point for you where you decided to start paying off your debt?
I was always highly aware of the burden of debt in my life, but for several years, I did not consider it to be a problem. After all, I never missed a payment, and my loan balances went down –slowly but surely—year after year.
I started grad school to pursue my school administrator licensure in 2013, which added to the small mountain of student loan debt. At the time, I wasn’t worried because I was pursuing my dream . . . or so I thought.
Two years later, I had finished my degree and secured a promotion to become an assistant principal in my school district. I felt like the luckiest guy in the world because it seemed like all of the pieces of the puzzle had fallen perfectly into place.
But things aren’t always as they seem.
The next year was the worst year of my life in just about every way imaginable. The new job was not what I thought it would be, and the stress and disappointment wreaked havoc on my mental state and overall emotional health.
I don’t like to talk much about it, but at times, it took everything in me just to make it through my day without having a mental breakdown. And that was around the time that something inside of me snapped, and I knew we had to make some changes.
What was your motivation to pay off all that debt?
Around February 2016, it became perfectly clear that I could not and would not continue in my job as an administrator. I submitted my resignation and letter of intent to return to a classroom teaching position at that time, and even though this gave me some relief, I suddenly became stressed about the financial impact of leaving my job.
I sat down that week and created a spreadsheet of all of my student loan debt and then compared it to our monthly budget. And after crunching the numbers, I realized it would be possible for us to pay off our remaining balance of nearly $18,000 in just under 6 months if we really hustled.
How long did it take you to get rid of your debt?
By treating debt like a full-blown crisis, we managed to bring my loan balance down to $10,000 in just over a month. We basically lived like we were broke – because we were, in all honesty!
Even with all of these cuts to our budget, we realized our payoff plan was still going to take us about 4-5 more months. (PSA: Teachers don’t make very much money, especially relative to their training and education.)
I knew we could pay off the remaining $10,000 balance on my loan debt if we were willing to tap into our emergency fund.
This was one of the hardest things we have ever done because our emergency fund was our security blanket; we had saved for a few years to build it up to the point that it covered nearly 6 months’ worth of living expenses.
It was hard, but we bet on ourselves and used a majority of our emergency fund to knock out $10,000 of my student loan debt, completing the entire journey from decision point to student loan debt freedom in 54 days.
Did you run into any “bumps in the road” when you were trying to pay off your debt? If so, how did you overcome them?
There were definitely bumps in the road when trying to pay off our debt. The biggest two were indecision and fear. I suppose you could also add in hunger!
At times, it was difficult to stay the course and remain committed to our goal. When friends asked us to go out for dinner, we had to say no.
We had to say no to just about everything during this short stretch. And it was hard because we wanted to have fun and let loose a bit on the weekends, but we also wanted debt freedom.
More than anything, I was afraid of what might happen if we didn’t pay off the debt before I went back to my old job and salary. I worried that all of my time and energy would be wasted if we didn’t put my current salary to use.
We were able to overcome the indecision and fear related to our plan by making an iron-clad commitment to accomplish our goal as quickly as possible. We knew that if we took our time, we’d probably fall back in our old patterns, so we put the pedal to the metal.
As Jim Rohn said, “Discipline is the bridge between goals and accomplishment.”
Did budgeting play a factor in you being able to pay off your debt?
Yes! Re-evaluating our priorities and rethinking how to budget money was the biggest factor in paying off our debt so quickly.
Before we got serious about paying off my debt, my wife and I were on a semi-strict budget, but we definitely were not frugal. We didn’t live above our means, but we occasionally splurged on the typical millennial wants: take out, new clothes, dinner with friends, etc.
We knew we would have to make changes in virtually every area of our budget if we were going to get out of debt fast. So we made several changes to almost every area of our budget:
< Restaurant spending was temporarily cut to $0
< No spending money on beverages of any kind, with one exception: coffee creamer and coffee from the grocery store
< All new clothing and shoe spending was cut to $0
< All entertainment spending was eliminated, other than Netflix and cable
< Any grocery items we couldn’t buy within our very tight grocery budget at Aldi
After we reduced everything down to bare minimum, we basically paid our mortgage, utilities, grocery bills, insurance, and gave to our church. That’s it.
When I tallied up all of the changes, we realized we were able to live on less than half of our combined monthly net income.
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What’s the strangest thing you did to save money while you were trying to pay off your debt?
I think the strangest thing we did to save money during this stretch actually cost us money in a way: We continued to give a tithe, or ten percent of our income, to our church.
This makes no sense mathematically, and I realize that, but I think it helped us pay off our debt faster because it changed our mindset about our income and spending.
If you could give 2 pieces of advice to someone trying to pay off debt fast, what would they be?
My two biggest pieces of advice for someone trying to pay off debt fast are simple:
1. Don’t let yourself make any excuses, especially if you’re a dual-income family with no kids. You need to roll up your sleeves, stop spending money on things you don’t need, and get to work. You’ll be surprised how quickly you can get out of debt if you’re willing to do hard work.
2. Focus on the reasons why you want to get out of debt, and remind yourself of these reasons every day. Write them down in a few prominent places in your house. If you can’t stay focused on them, make yourself re-write your goals using a pen and paper every single day. You have to want debt freedom more than you want anything else if you’re going to achieve it quickly.
Now that you’ve paid off your debt, what financial goals do you have next?
I’m a dreamer, so I’m always looking 10 steps ahead in life –it’s both a blessing and a curse.
Currently, my wife and I are in the early stages of planning to buy a rental property. We also will need to replace one of our aging vehicles soon before it becomes too unreliable and unsightly for me to use for my real estate business.
But overall, we’re looking forward to slowly building wealth and building a legacy for our son. We want him to learn to handle money wisely through watching our actions and learning from both the successes and inevitable failures we will experience along the way.
Thank you so much for sharing your story with our audience David! You’re living proof that with determination anything can be done, whether that be paying off debt or even getting out of an unhealthy life situation.
Best of luck to you guys and your future endeavors, we will be cheering you on from the sidelines!
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