Here we are with another inspiring story for our Debt Free Living Series.
This week we are going to hear from Melanie over at DearDebt.com. She was able to pay off over $80,000 in student loan debt.
Let’s hear how she did it!
Tell us a little bit about yourself!
Hello reader! My name is Melanie Lockert and I’m the founder of the DearDebt.com blog as well as the author of the Dear Debt book.
My blog and book share how I overcame $81,000 in student loan debt. I also organize Lola Retreat, a retreat to empower women with tools and resources to get their finances straight.
I’m a full-fledged coffee addict, cat mom to Miles and Thelonious (also a jazz lover), and a newbie boxer. I live in Los Angeles and enjoy traveling, speaking Spanish, and going to shows.
How did you end up in debt and how much debt was it?
I borrowed a total of $81,000 for two degrees. I borrowed $23,000 for my B.A. from California State University Long Beach and $58,000 for my M.A. from New York University.
Including all of the interest, it was probably closer to six figures but I didn’t track that.
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What was the turning point for you where you decided to start paying off your debt?
When I graduated from NYU and saw that I still had $68,000 left after making payments for several years on my undergrad loans, I was in complete denial. I couldn’t find a full-time job and just acted like my student loans didn’t exist.
Then six months after graduation, I hadn’t secured a job. I could no longer afford to live in NYC and pay my student loans.
I ended up leaving for Portland, Oregon to live with my then-partner. We split a studio apartment but all I could find were jobs making $10 to $12 per hour.
I felt so depressed that I couldn’t find a full-time job with a master’s degree. My debt was causing me so much anxiety and all of 2012 was spent in a serious depression.
At the end of 2012, I hit a breaking point. I couldn’t continue to spend that much energy obsessing and being depressed about my debt.
I discovered personal blogs and realized that I could channel my negative energy into something positive with a blog. So in January 2013, I started Dear Debt.
Every month, I’d include my debt repayment progress. There were the signature dear debt letters, which are breakup letters to debt. The blog created a community that kept me accountable and led to other opportunities that helped me pay off debt.
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How long did it take you to get rid of your debt?
It took me a total of 9 years to pay off $81,000. But I also went to school at two different times. I graduated in 2006 with $23,000 and paid that for a few years. In 2011, I graduated from NYU and combined still had $68,000.
Previously, I just paid the minimum. After NYU, I got serious with my debt. So I paid off that $68,000 in 4.5 years.
What was your motivation to pay off all that debt?
My main motivation to become debt-free was to live the life I wanted. I didn’t love living in Portland and felt so restricted.
I felt like all of my choices were made for me. I had to say “no” to nearly everything and if I did have to spend money, it was always looking at the cheapest option.
When I got hit with major debt fatigue — because making four-figure payments for years is exhausting — I created a debt-free dream list. On this list, I wrote down things I’d do once I was debt free that I couldn’t do now.
On that list, I wrote that I’d move back to LA. I wrote that I would get a cat and go to Italy with my mom. Thinking of the life I would live after paying off debt kept me motivated.
I figured if I do the hard work now, I can enjoy later. I’m happy to report I’ve done everything on my debt-free dream list!
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?
As I mentioned, I experienced debt fatigue and combat that with my debt-free dream list. I felt exhausted because I was working seven days a week with all of my side hustles.
I also had to learn how to say no to friends and family. I had to make hard decisions like not flying home for the holidays because I couldn’t afford it. Paying off debt was so hard but it’s been worth it!
Did budgeting play a factor in you being able to pay off your debt?
Budgeting sort of played a factor. I mean that to say that I had already cut back on all my expenses. I didn’t have a car, health insurance, cable or Netflix. I walked or biked everywhere and didn’t really go out.
After slashing all of my expenses, I realized my only option was to earn more money. So while budgeting was a factor, for me, earning more played a much bigger role in my debt payoff journey.
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What’s the strangest thing you did to save money while you were trying to pay off your debt?
I don’t know if I did anything strange exactly. I did work side hustles like being an event assistant or helping throw a 40th birthday party so I could get extra food leftovers. That certainly helped my food budget.
If you could give 2 pieces of advice to someone trying to pay off debt fast, what would they be?
My advice would be to connect to your WHY. Why is it important that you pay off debt? What are your dreams on the other side of debt?
If you don’t connect to your why, paying off debt won’t matter or mean anything to you. I also recommend calculating your daily interest. I was paying $11 per day in interest at the height of my debt.
When I realized that I was wasting $300 each month to interest — a roundtrip flight from LA to NYC — I got so mad. That fueled me to get out of debt faster.
What steps are you taking to ensure you stay out of debt?
I don’t have to worry about student loans anymore because I’m done with school! But I do have a credit card — and while I briefly had credit card debt for 3 months this year while building my business — I’m free now.
I’m working to keep my business sustainable but also growing. I have a fully-funded emergency, investments and keep an eye on my spending.
Now that you’ve paid off your debt, what financial goals do you have next?
My next big goal is to get a six figure net worth. I also want to create a product that can help me get more passive income.
I think a lot of us can relate to your story. Thank you for sharing it with us Melanie!
The weight of debt on your shoulders can be overwhelming, I’m glad you were able to overcome that and are now living the debt-free life you dreamed of!
Congratulations and we look forward to following your journey as you continue to grow your business.
If you found inspiration in that story, make sure you join our email Tribe so you don’t miss the next installment of this series!
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