This story is part of our money dairy series, where we share the personal finance stories of some of our readers. Today’s theme is: Paid off debt.
When John (not his real name) graduated from college, he was eager to start his career and build his life. He had student loans to pay off but was confident that he would be able to handle it with his entry-level salary.
Unfortunately, things didn’t go as planned. He quickly realized that his expenses were higher than expected, and his salary wasn’t enough to cover everything.
He started using credit cards and getting a personal loan to make ends meet with the thought that he would pay it off in a few months, but before he knew it, his credit card balances were quickly getting out of control.
He struggled to make the minimum payments, and the interest charges were piling up. He ended up working long hours at the office, but it wasn’t enough to cover his expenses.
For me, paying off debt was a journey inspired by several factors.
One of the main reasons I decided to tackle my debt was that I was tired of the stress and anxiety it was causing me. I was constantly worrying about how I would make my next payment, and the thought of being in debt for the rest of my life was incredibly overwhelming.
I knew I needed to take control of my finances and do something about my debt if I wanted to live a happy and fulfilling life.
I was also inspired by the many success stories I had heard from people who had successfully paid off their debt. These stories gave me hope, even if it seemed daunting at first.
Developing a plan to pay off my debt balance was essential in my journey to becoming debt-free. I knew I needed a clear strategy to make real progress and achieve my goals.
After some education, I started executing my plan, which involved a combination of budgeting, prioritizing high-interest debt over lower interest rate debt (debt avalanche method) instead of the debt snowball method, and setting specific financial goals. It wasn’t easy, but it was a crucial part of my journey to becoming debt-free.
Many resources available can help you make a plan and take the necessary steps to become debt-free. Personally, I started listening to podcasts, youtube videos and read books.
The favourites responsible for about 90% of what I did were Dave Ramsey’s podcast, Choose FI podcast, and the book your money or your life.
For those dealing with debt whether small debts or larger debts, start by reading the book Your money or your life by Vicki Robin and Joe Dominguez.
Sacrifices are often needed to pay off debt, and my journey was no different. To successfully pay off my debt, I had to make several sacrifices in my daily life.
One of the biggest sacrifices I made was in my spending habits. I had to be more mindful of my expenses and prioritize my spending to redirect as much money as possible to pay off my debt.
This meant cutting back on things like dining out, shopping for non-essential items, and entertainment expenses. While it was difficult to give up some of the things I enjoyed, it was a necessary sacrifice to achieve my financial goals.
I also had to make sacrifices in my long-term plans. For example, I had to put my plans to travel on hold while I focused on paying off my debt. This wasn’t easy, but it was a temporary sacrifice that I knew would pay off in the long run.
Overall, paying off any amount of debt requires a certain level of discipline and sacrifice, and it can be tough at times. But making these sacrifices helped me stay focused on my goals and motivated me to keep going, even when it was difficult.
I know it can be difficult and overwhelming Journey. However, it is possible to pay off your debt and achieve financial freedom if you have the right mindset and strategies. Here are a few pieces of advice that helped me on my journey to becoming debt-free:
Other ideas I found later on especially reading your blog posts but didn’t take advantage of are balance transfer card and debt consolidation loan.
At the time, it wasn’t easy, and it felt like my financial situation was a mess especially when it felt like you were making little progress or when you face setbacks along the way. One thing I did and I think it’s the best way to stay motivated was to celebrate small wins.
It’s important to celebrate your progress, no matter how small it may seem. This might involve treating yourself to a small reward or simply acknowledging and appreciating your progress.
Another thing I did was to track my progress and keep it in view, something as simple as checking my credit report and see my credit score improve is very motivating.
Hmnnn……the biggest challenge I faced while paying off my debt was staying motivated and focused.
There were times when it felt like I was making little progress, and it was easy to get discouraged and lose sight of my goals. It was also tough to make sacrifices in my spending and put my long-term plans on hold while I focused on paying off my debt.
Another challenge I faced was finding the extra money I needed to make progress on my debt. As a result, I had to increase my income through side hustle and additional work.
Through my journey to becoming debt-free, I discovered that I could make difficult financial decisions and stick to a budget, even when it was difficult.
I also learned that I could be disciplined and sacrifice short-term pleasures to achieve long-term goals.
But most importantly, I learned a lot about my mindset and attitudes toward money. I realized that my relationship with money had been holding me back and that by changing my mindset and taking control of my finances, I could live a happier and more fulfilling life.
One thing I would do differently is start saving for emergencies earlier on in the process. While I was focused on paying off my debt, I didn’t have much of an emergency fund in place, which left me vulnerable to unexpected expenses. If I could do it again, I would start building up an emergency fund as soon as possible to have a safety net in case of financial setbacks.
A big thank you to our guest today. Their story shows us that we can overcome financial problems and reach our goals with the right mindset and plan.
