Some people are experts at debt repayment – and you’re about to meet one of them.
Jackie Beck didn’t just pay off almost $10,000 in student loans in just 5 months, she also paid off over $147,000 in total debt including her mortgage. To chronicle her journey and help others, she launched the blog The Debt Myth which gives tips and tools for how others can get out of debt.
In the interview below, Jackie tells us how she managed to accomplish this incredible goal and what she wishes everyone would think about before taking out student loans.
What Made You Get Serious About Your Student Loan Repayment?
I finally got serious about paying off the balance of my student loan in 2007 — after basically alternating between making slightly-larger-than-minimum payments on it, deferring it, or having it in forbearance for much of the time.
Once I actually focused on paying it off, it took me a little less than 5 months to knock out the remaining balance of $9,759.46.
How Did You Manage to Pay Back Your Loans in 5 Months?
Having an income again helped! But, I also kind of went crazy with making paying it off a priority. I woke up every single day thinking about how I could pay it off as quickly as possible.
I tracked my expenses, asked for discounts on the things I did have to buy, brought in extra money, and made multiple payments to the loan each month. I obsessed. Obsessing is a good thing when you’re paying off debt!
Why Did You Use Your Emergency Fund to Pay Back the Final Loan Amount?
I’d been talking to my husband about how I didn’t understand why people kept money in the bank when they were paying a bunch of interest on loans, when it hit me that I was talking about myself too.
I had money in the bank! Money that I’d been saving for emergencies. So, I put my money where my mouth was and paid off the $4,400 balance I had left by then. And it felt great!
You Paid Off a Total of $147,000 in Debt, Including Your Loan. How Did You Manage to Do That?
It’s all about focusing on one debt at a time until they’re all gone. And, of course, it’s about doing the one thing so many people don’t do: I stopped borrowing. You don’t get out of debt by adding more.
I made it a rule that unless I had the money in my hot little hands, I wasn’t buying it. No excuses. If an emergency happened and I didn’t have the money, I found a way to deal with it without borrowing. I also built up an emergency fund again, and started saving monthly for irregular expenses so that I’d have the money by the time they rolled around.
The great thing about only spending money you already have is that you can do anything you want without guilt or a debt hangover.
What Do You Wish Other People Knew About Student Loans?
For those with student loans, I wish they knew that even low interest rates are worth worrying about. Interest adds up over time, especially on higher interest private student debt, over long 5 to 20 year periods like with student loans. Make them a priority and knock them out. If you get a windfall and are debating between paying down debt or something fun – pay down debt! Then have fun with your own money later.
For those without student loans yet or those considering taking out more, I wish they knew that there’s no such thing as good debt or bad debt. ALL debt is risky, and while it’s great to get a degree followed by a good job, borrowing money to go to school doesn’t mean you’ll actually DO either of those things.
Everyone thinks they will, yet actual graduation rates prove that wrong. Understand your risk, and do everything you can to avoid or minimize it. That means asking things like “What would I do if I borrowed to go to school and then didn’t graduate for some reason?” or “What if I borrowed to go to school, got a degree, and still ended up just working part time at a local store afterward?” Or even “What if I graduated, got a great job, and hated it or wanted to do something else?”
It pays to spend time thinking about those scenarios, because they happen to a LOT of people.
How Did it Feel to Send in That Final Payment?
It felt great! My life changed at that moment, because for the first time I knew what it felt like to be free of the stress and worry that comes along with debt.
Paying off my student loan was the catalyst that put me & my husband on the path to total debt freedom. I want everyone to feel that way!
Author: Dave Rathmanner
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