How I Ended Up Debt-Free at 25 With A College Degree and Car.
Every dollar you owe is a nightmare.
“I figured I’d pay it off. I mind as well”.
The woman behind the counter, who looked like she was extremely new to this, cracked a smile and agreed. Only a few months before this I had a brand-new (used) car and didn’t really want to empty my savings account to buy it flat-out.
“Who taught you about money?”
I knew my answer right away.
My frugal father.
Finances are really not my thing. The only C I got in college was in a finance class. My professor, a retired CFO, was probably brilliant in his career. Teaching? Not really his strong-suit.
So I taught myself the material, beat down his door for office hours and offered him some of my sushi once.
Trust me, that C was a miracle.
When I learned about minimalism a little over a year ago, I was both fascinated with the concept while simultaneously knowing I had followed a lot of the same principles. Mostly because of some simple lessons my father beat into my head like a baseball when I was young:
1. Don’t buy what you don’t need.
2. Screw getting a nice car, it will depreciate.
3. Avoid debt at all costs.
A lot of people I know didn’t avoid debt. Damn-near everyone. Some made it out with $100,000+ in loans just for their undergraduate business degrees, liberal arts majors or excessive housing costs.
Being out of debt at 25 is a combination of luck, circumstance and making key choices to get me to where I am. And like I said, I don’t know sh*t about finances.
But I figured out how to save.
1. Working my tail off
We don’t all have parent’s that save us money for when we’re older. Thankfully, I had enough for 1 year of tuition at a state college (or so) covered.
If I could go back and tell myself 1 thing: It would be not to go.
Yes, you read that right.
My college experience shaped me, actually prepared me for my current profession and provided a wonderful experience. I also saved my own ass by getting a Resident Assistant job at the end of my first year, which covered all of my housing and food costs for the next 3 years. Without this, I would’ve been more than $20,000+ in debt right now. Even if I moved off campus, the money, I’d still gotten a killer deal.
And I didn’t stop there, I always had at least 2–3 campus jobs. I worked in Admissions, Student Development, took internships and even stayed over multiple summers. At the end of it all, I came out with a small loan of $3500, which I actually had in my bank account to pay off (But I waited).
When you’re 18 you don’t know what you’re doing most of the time and that goes triple for finances. I only wish my high school counselors had pushed me to spend a year or two at a community college or maybe enter a national-service program instead (or even trade-school, if that’s for you).
2. Service.
My AmeriCorps experience is one I talk about a lot because it had a profound impact on my life. Not only because I was committing a year of my life to fully serving others, I was also learning how to stretch a dollar even further.
If I could go back and tell myself 1 thing: College can wait.
Most adults out there don’t know what they want to do with their lives, why would kids fresh out of high school? Spending $40,000/year on a private university probably won’t help you. “Studying what you love” is gonna send you right into debt. Which you won’t love.
AmeriCorps (1 among many national-service programs) not only paid my living fees, it gave me a $5000 scholarship on top of it (Which helped cover the rest of my loan) and gave me real-world work experience to help land a job.
It also made me conscious of the power of service. Whether it’s in my job or in my community, I see natural disasters happen on the news every day and actually understand how that affects people’s lives because I was on the front lines putting in the 12 hours days needed to help fix it.
3. Saying no to what I don’t need.
I’ve somewhat made this point already, but it bears repeating. There are so many things out there we waste our money on when they’re not giving us much value.
If I could go back and tell myself 1 thing: Stick to essentials.
There have been a few trips that put me in a tough spot. And yeah, I’ve seen the articles about how it’s “perfectly fine to spend all of your money on experiences”.
No, no it isn’t.
Don’t starve yourself so you can go on vacation and post the picture on Instagram.
I’ve seen friends blow thousands of dollars on trips only to complain that they “couldn’t buy this” or “couldn’t do that” afterward. Yes, life is short. Yes, experiences are great. But I’ve learned you also have to have your sh*t together at home first before you leave it.
4. Buying a car and paying it off quickly
I specifically looked for a car I could have paid off in 6 months. Many, many people told me this wasn’t possible. Thankfully, a group I belong to a forward-thinking Facebook group who assured me it was.
And they were right.
If I could go back and tell myself 1 thing: Don’t rush buying a car.
Even if the mileage was a little high, I was willing to take on short-term debt to have a little more reliability. It was important to me to own the vehicle and rid myself of pesky payments.
I’ve learned every dollar you borrow isn’t a dollar. It’s a dollar plus interest. We don’t see interest so it’s hard to feel the effect until years down the line. I’m trying to be as conscious of it as I can now.
Within 4 months, the car is now 100% paid for.
Staying out of debt has often felt like an uphill battle.
There are always people trying to sell you more and more stuff you can’t afford. More years of college. Another degree. A new car. Upgraded features. This product, that product. Products, products, products.
I filter out the noise by:
1. Knowing exactly where my finances are.
2. Keeping track what I need vs what I want.
3. Prioritizing my health over everything.
There’s something beautiful about living a life you can afford now so you can live better later. Most people won’t and I’ve witnessed person after person tell me they’ve regretted poor spending decisions when they needed the money the most.
I’m trying to make sure that’s never me. Even if it’s hard.
