Guys, in 5 days, I am going to accomplish something I haven’t done in over 12 years. The first time I did this, I was still a high school senior. Any guesses??

Yes, I fell into the hole approximately 71% of college students fall into. I fell into student loan debt. This was my first dip into debt. After the student loans, it became credit cards, car payments and a mortgage. I haven’t been debt free since my 18th birthday.

A little back story..

Flash back 8 years, I had just graduated from college with slightly over $20K of student loan debt and approximately $3500 in credit card debt. That’s not too bad, considering the average student loan debt today is over $37,000 not including credit card debt. Not to mention, I graduated at a time there were very few jobs in the market (hello! great recession). But I was one of the lucky ones with a job lined up to make $40K my first year. I was set to tackle this debt head on.

Then I decided to move out on my own & I just HAD to fly through my MBA program. So, I took out an additional $9K of student loans and had zero $$ in my emergency fund. Well, let’s just say I still don’t have that MBA. But the debt stays with you even without the degree.

Life can sure come at you fast, especially if you’re not prepared. After I became pregnant with Ella, I dropped out of my MBA program and focused on being a mom. In fact, when Ella was 18 months, I quit my job altogether. Bye-bye $55K salary.

Flash forward to today. I’m 30. I’ve had my student loans paid off for 3 years. I just paid off a credit card last month. And in 5 days, I’m going to be 100% debt free – mortgage included.

So what have I learned during this past decade of being a slave to the lender? Well, let me run through a little list..

5 Lessons to Learn While Paying Off Debt:

  1. Budgeting is #1. The easiest way to get out of debt and stay out of debt is cash planning. How much money is coming in Vs. How much money is going out. I started being more intentional with my money and sticking to my monthly budget. I use the EveryDollar app on my phone to help track all my expenses. Since everything is digital and you buy anything with the ease of a single swipe, I like being able to track everything in real time. As soon as I swipe my card, BAM. I open my phone and track the expense. It’s also been a great way for me to keep track of my Airbnb income, since it’s not consistent month-to-month and trickles in every few days depending on bookings.
  2. It can be avoided. That Gucci bag every fashion blogger has, sure, I WANT it. But you know what I wanted more? To be debt free. So, I could have charged the latest YSL messenger bag to my Nordstrom credit card. Easy peasy! But I don’t HAVE to go into debt to buy what I want. By saving a little extra money each paycheck, I’ll have enough money saved up to buy one and not still be paying on it 9 months later. Another way to avoid debt…
  3. Always be prepared. That’s right. I’m talking about an emergency fund. When I initially moved out on my own after college, I was careless with my money, not budgeting and had no savings. Talk about a broke college grad. When times were tough, I had no emergency fund to fall back on, which created a lot of undue stress. The easiest way to avoid stress is to always have a plan and be prepared. I just became debt free so I’m still working on building up my emergency savings. I recommend starting with $1,000 in the bank as a buffer until all your debts are paid off. From there, it’s time to build that baby to 3-6 months. My pay is pretty consistent so I’ll probably have a small emergency savings of about $10,000.
  4. Cash is king. (That’s a lower-case k.) The power of cash is transformational. I like to use cash whenever possible. The #1 spot where I always carry cash is the grocery store. Since sticking to a cash-only budget, I’ve spent less money at the grocery store and we’ve wasted less food. We do still eat out every now and then, but we’ve made up for it by keeping out grocery budget significantly low. We’ve also recently purchased a new (used) car. By paying cash, we were able to save 10% off the sales price. I highly recommend always using cash when making large purchases! My goal is to pay for our next house with all cash.
  5. The power of self-discipline. This is by far the most important. The past decade, I’ve had this on-going stress. I couldn’t figure out exactly what the trigger was. But I knew the weight of the amount of debt I had was exhausting. I carried it with me everywhere. I made the decision to stay home with Ella for a few years, but I never thought about the opportunity cost. I felt pretty disciplined with my spending, very rarely hitting up the sales racks or stores. I even tried to avoid Target! Yet, the debt followed me. Although the sale of my house has played the most important reason in me getting out of debt, I have a completely different outlook on money and my spending. I don’t use credit cards, my cars paid for, I keep a significant balance in the bank, I have money in savings, including sinking funds, and I’m starting to save more for retirement and Ella’s future college expenses. I just paid cash for a house that I’m going to renovate (all with cash). It’s not easy and with the power of social media influence, it’s definitely very tempting to buy more than I need and everything I want. By having the power of a little bit of self-discipline (and a budget), I’m looking forward to what the future holds.

After paying off my last debt, I’ve felt an overwhelming amount of freedom. Freedom from creditors, freedom from lenders, freedom from the bank, and freedom to do whatever I want. My future is now in my control. There are so many things I want to accomplish, places I want to see and adventures I want to take. Now, I have the freedom and flexibility to tackle my bucket list head on. It sure feels good!

Do you have a debt-free story? I’d love to hear about it!