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The words “student loan debt” still make me sick. After finishing my MA in school administration in 2014, I owed $19,700. To make matters worse, I also owed $5,000 on my undergrad student loans.
I desperately wanted to crush those loans. But there was one big problem:
I didn’t act on that motivation.
Things changed in 2015 when I began a new job as an assistant principal. We got a bit more serious about my debts and began making extra payments.
One month, an extra paycheck month helped us pay off the rest of my undergrad loans, and the next month we were able to pay nearly $1,000 in additional principal on my grad school loans.
I honestly felt like Andy in The Shawshank Redemption, whittling away at a massive stone wall with just a small rock hammer. We were making progress, but it was slow.
Meanwhile, I slowly came to the realization that my new job was an awful fit, and I wanted to quit just as badly as my boss wanted me to leave. I realized that even if I left my job, I would still have the constant reminder of a truly awful work experience with every single student loan payment.
One day, I’d finally had enough and something inside me snapped. In the next 54 days we paid off nearly $18,000.
When I share our story with others, people are usually either shocked or completely dumbfounded. And when the story was picked up by CNBC and Yahoo! Finance, many commenters refused to believe that two educators could possibly pay off that much debt in under two months.
They said we were liars, must have received a big inheritance, and wrote some awful things which aren’t worth repeating.
But the truth is that ordinary people with average middle class income profiles really can pay off a lot of debt in a shor time with the right mindset and motivation.
Thanks to some intense frugality and willingness to take chances and bet on ourselves, my wife and I became the kind of debt destroyers we were used to reading about on the web. And we did it through old-fashioned hard work—without the benefit of anyone else’s help or money.
I still think anyone can get out of debt with the proper mindset and motivation. In the rest of this post, I’m going to outline three simple ways you can adjust your mindset to pay off debt as fast possible.
1. Think Big and Set Huge Goals
Before we got serious about paying off my debt, my wife and I were budget-conscious, but we definitely were not frugal. We didn’t live it up by any means, but we had many of the standard millennial habits: going out to eat out of convenience, checking out new movies from time to time, grabbing a drink with friends, and shopping for “deals” on things we didn’t really need.
When we decided to pay off my loans, we knew we would have to make changes in virtually every area of our budget if we were going to do it quickly. So we made many changes to our budget which added up to be a larger percentage of our budget than I realized was possible.
It wasn’t easy, but we cut out and/or reduced almost everything in our budget:
- Restaurant spending was temporarily cut to $0
- No spending money on beverages, with a few exceptions: coffee creamer and coffee from the grocery store, and free Starbucks paid for with secret hacks
- All new clothing and shoe spending was cut to $0
- All entertainment other than Netflix and cable was eliminated (…gasp, yes, we kept the cable and still have it today)
- Any grocery items we couldn’t buy within our very tight grocery budget at Aldi
Because we own our house and live in an area with outrageous property taxes, these changes were literally the biggest money saving moves we could make.
After taking a scalpel to our budget, we basically lived what I call scorched-Earth style: we 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.
I know this may not be the norm, especially if you’re a single-income household or have several children. But if you are a dual income household and have no kids, let me be blunt:
You need to stop making excuses, roll up your sleeves, and get to work.
2. Treat Your Debt Like a Full-Blown Emergency
By treating debt like a full-blown crisis, we managed to bring my loan balance down to $10,000 in a very short time. We lived like we were broke while our co-workers carried on like debt was just a part of life.
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. (Side note: if anyone every tries to convince you that teachers are overpaid, they’re either lying or bad at math.)
Whenever I thought about our debt, I had this vision of our house burning down. It was like the debt was an all-consuming fire.
Simple math showed that we could pay off the remaining $10,000 balance on my loan debt without completely wiping out our emergency fund and other short-term savings. 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.
Yes, it was a little scary, but sometimes you just have to take big calculated risks to achieve big goals.
Of course, you might not be sitting on a 6 month emergency fund like we were at the time. I get that.
But let’s look at this from another angle. If your spouse or parents had only 3 months to live and required new, cutting edge medication with a price tag of $10,000, you would do whatever it took to make that money and buy the medicaiton. I know I would hustle until my legs gave out if I were in that position.
If more people treated their debt like an emergency that required urgent attention, fewer people would still be in debt.
3. Focus on All You Have to Gain
If you’re in debt and motivated to pay it off early, you need to focus on the finish line and push as hard as you can to get there. If you focus on all that you have to gain—freedom, happiness, the opportunity to leave a job you hate and pursue your dreams—it won’t magically wipe away your debt.
But it will definitely make it easier to sacrifice until it hurts if you keep your eyes on the end goal.
It’s not going to be easy. At times, it will really suck. But don’t give up. As Jim Rohn said, “Discipline is the bridge between goals and accomplishment.” And while you’re on that bridge, the road may get bumpy, but the destination is worth it.
And don’t forget — your journey is yours alone. Don’t waste time comparing it someone else’s journey. And never compare your beginning to someone else’s middle. When you’re striving to get out of debt, nothing else can kill your momentum faster than playing the comparison game.