A Journey of 1000 Sacrifices

How I paid off nearly $30,000 of student loan debt in 6 months

“The journey of one thousand miles begins with one step”

— Lao Tzu

This simple proverb has been my primary motivation over the past 6 months of the journey toward financial freedom. In January 2017, my combined student loan balance from college and graduate school totaled just over $98,000! The next month, my income-driven repayment plan lapsed, nearly tripling the monthly payment. It was time to take action.

It served as a “turning point” and marked the first time my payments actually contributed to the principle, instead of barely covering the daily compounding interest. It was a moment of financial awakening and caused me to make radical changes in my priorities.

2017 Vision Board — created before financial freedom journey

Although I didn’t have financial freedom in mind when I created my 2017 vision board, a primary theme is to relentlessly pursue all goals; I refuse to make excuses. Eliminating debt just so happened to be added to the picture as my #1 goal.

Instead of paying the minimum and seeing NO momentum, I decided to get aggressive with repayment. There was no way I could devote myself to 10+ years of loan repayment. (See my first post on the traps of repayment programs).

The same day I became intentional about eliminating debt, I discovered The Dave Ramsey Show on YouTube. It was a complete game changer! I spent an entire weekend absorbing principles of the debt snowball, debt avalanche, cash flow system, cash envelopes, debt free screams and more.

While I’ve never been an excessive spender and lived within my means, I did not have a financial plan or goals. These tools provided me with a foundation to take the first step of the journey and accept the sacrifice needed to survive “one thousand miles”.

Journey by the Numbers

I started tracking the journey by creating a series of charts and tables to track automatic and additional payments. Each month I became more encouraged by the progress. The first month of the debt snowball was so small it’s not even visible. By March, I doubled the required payment, and was gazelle-intense by April (read: Goodbye, tax return)!

View of monthly and total payments made during the first 6 months of 2017

Explanation of chart:

Monthly: how much I paid towards loans in a given month, varied from month-to-month

Cumulative: total payment, including all previous months, steadily increased with each successive payment

Balance: current balance of all student loans, steadily decreased from month-to-month

I am living out my 2017 vision — minus the vacation — by becoming the boss of my future. To attain financial freedom requires a balance of behavior modification and tactical approaches. Below are actions steps that helped me to pay off nearly $30,000 to date.

The Process: My 7 Action Steps

1. Understand the “Why”. Without a deep enough reason for eliminating debt, we can all waiver. Commit to a goal bigger than yourself to remain focused. For some, motivation comes from a desire to be a generous giver and others to build a legacy for future generations.
2. Create a total picture of all outstanding debt. The next step is to understand your total financial picture. How much is owed in consumer debt, a mortgage, vehicle(s), student and personal loans?
3. Complete a detailed 6 month audit of all expenses. Most banks allow you to download a report of transactions from your debit and credit cards. Categorize spending and learn your current spending habits.
4. Develop a realistic zero-based budget. Every single dollar that you earn should have a purpose. Every Dollar is a simple budgeting tool (online and mobile app versions). There are many that are available. Find the one that you will use consistently. Follow general guidelines on budget proportions. Demonstrate grace, this process is experimental and can take time to develop.
5. Make a plan of action. Set a pay off date based on step 2 and make additional payments based on the budget. Make the journey real by having an arrival date in focus. Knowing that 15 or 26 months of sacrifice are needed to eliminate debt puts everything in context. Assess if you can achieve the goal by reducing expenses, increasing your income, or both.
6. Build a community of support/accountability partner. This journey impacts every facet of life. Find someone that you can trust to be honest and hold you accountable for the goals you set in step 5. Additionally the online community really supports those who are on the path — just search #DebtFreeCommunity # DebtFreeJourney on social media.
7. Pray. Sacrifice. Repeat. None of this happens over night. Walking in faith with a clear map is key. Reflect on your “why” regularly.

“As you bring your money into alignment with your values, you begin to see how what you have to give — your time, money, and abilities — can become instruments of grace that can impact the trajectory of others’ lives forever.”

— Rachel Cruze

Take the First Step

It’s been six months and I still have quite a ways to go. However, the delayed gratification of responsible personal finance will provide much more than the instant gratification of happy hour or mindless consumerism. Five years from now, will the dinners and events I missed be a big deal?

Each of us has a unique path we must walk. Perhaps your debt is just a few hundred or a few thousand dollars; you’re convinced that everyone lives and dies with debt; you don’t know anyone that lives on a budget. Those are very normal beliefs. We don’t have to be a generation, drowning in debt and too ashamed to ask for help.

There are days when the mountain of student debt— Mt. Navient — seems insurmountable and the snowball isn’t moving fast enough. Those days, I reflect on where I started, going nowhere fast without financial direction. I focus on my “why”, and week by week, the small sacrifices in my lifestyle result in major changes to the bottom line.

Besides the $30,000 that I paid, I’m most excited by the friends and family that are committing to join in the process. I hope my personal story encourages others to take the first step on an arduous, yet rewarding journey toward financial freedom.

“When I go to work now, I’m saving to build for the future instead of paying for the past” — Chris, Dave Ramsey Guest

Need an extra boost?: See Dave’s Top 10 Debt Free Screams

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