Accounts paid off: 5 of 5
“Every little step helps. It’s the accumulation of all those little steps that really make a big difference.”
I don’t know about you, but it took me a long time to get my career off the ground. I always knew what I wanted to do (write, write, and write some more!), but never could seem to make it happen. From going to college in Kentucky to working as a banker in Ohio, to getting a corporate job in New York and finally my dream job here in San Francisco, it’s taken me 7 years to finally say I love what I do for a living.
Besides periodic times of self-doubt and frustration, this journey came with its fair share of financial ups and downs. I’ve gotten into and (thankfully) out of credit card debt, seen my savings fluctuate drastically, and am continuing a battle against student loan debt. I’ve also learned a thing or two about what’s important and how a budget can can lead to financial fulfillment.
Another lesson I’ve learned over the years is that I’m not alone in this crazy journey (wish I had known that a few years ago…). That’s why I’m so excited to be sharing our latest success profile with you. The path to success is often long and rarely straight – such as the path our latest success profile, Brandon, has created for himself. Through some exciting career changes and necessary habit improvements, he worked his way out of debt and on to a life of financial freedom. Let’s find out how he did it!
The Debt Journey Begins…
Brandon’s journey with debt started slowly. A self-admitted “electronics guy”, he developed what he described as bad spending habits when he was only 18. A few short years later he got his first career-oriented job and his first brand new car, thus adding more debt on top of his student loans. So far, his story sounds like what most young professionals go through, all the way up to deciding to purchase a home…
Then Brandon’s inner voice kicked in before he made it too far down the home purchasing path. He decided to ask a trusted financial expert in the Atlanta community, Clark Howard, for advice. Even though the market for buyers was favorable at the time, Howard advised Brandon that his option to move back home with his parents for the express purpose of paying off his debt instead of buying a house was the better option. And that Brandon did…
One Step Back, Two Steps Forward
While Brandon liked the idea of moving home to pay off debt, he wanted to make it clear to his parents that he had no intention of taking advantage of their generosity. He created an Excel spreadsheet with amortization schedules to show his parents exactly when he’d be paid off. Graciously, Brandon’s parents agreed to let him come back and live rent-free so he could pursue his aggressive repayment plan.
Although this was before Brandon’s ReadyForZero days, his debt payoff schedule and plan looked pretty similar to what he would have seen on ReadyForZero. He prioritized his highest interest rate debt first (credit cards, then auto loans, and finally student loans). And living rent-free would allow him to reach these goals faster.
We asked him if it was difficult to take the step of moving back home as an adult (a move many would deem unthinkable), and he gave a pretty encouraging response!
“I was super excited and positive about being able to pay all that off. At 25 when you’re living at home, it’s kind of dorky, but it was for a purpose, and so I was dedicated to that. Yeah there were some sacrifices I had to make, like my social life. It was ultimately worth it.
…I tried to be as frugal as possible because it would be kind of lame if I went home and said, ‘Hey I’m going to live off you rent free and then I’m going to go party all time.’ That wouldn’t be cool. But I didn’t just lock myself in my bedroom and not come out and do anything. I limited what I did, focused on my goals, but still had some fun too; just toned it down.”
One of the best things about this plan is that it incorporates balance. No matter what your debt payoff plan looks like, it has to be sustainable. Brandon took a large step by moving back home with his parents, but doing so allowed him to pave a path to debt freedom while still focusing on his personal needs. And Brandon’s results were pretty incredible…
In just one year, Brandon paid off $25,000 of debt!
Not bad for one year of living with the parents! However, Brandon’s path later took a turn and so too did his financial picture.
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A Few Career Turns, A Few New Hobbies, And Some Debt Creep
After Brandon paid off his debt, he changed his career path. While he now has a job he loves in IT (thanks to an interest in computers and some self-taught skills), he started out in human resources and took a turn in consulting. The consulting work partially contributed to a personal economic downturn for Brandon:
“After that $25,000 was paid off, I was mostly debt-free for a number of years, and then I remembered it was like gaining weight. If you don’t watch it, if you’re not careful, if you’re complacent about it, it will sneak back up on you. That’s kind of what happened. I bought some stuff and helped make ends meet. I went through a time when I was at the consulting firm where they had a slowdown of business and my salary got bumped down to almost half of what it was previously. Before you know it, I had $8,000 or $9,000 [of debt]…That $8,000 stuck with me for several years. It would wax and wane a bit, but it just seemed like it wasn’t going anywhere.”
Around that time, Brandon also picked up some new hobbies such as skydiving. In pursuit of that hobby, Brandon wanted to buy his own parachute rig – nearly a $5,000 investment. So he got to work on saving until one day he rethought his strategy. Remembering his days of debt payoff years before, Brandon realized that making a large purchase while in debt didn’t make sense after all:
“So before I had a chance to change my mind, I went to my online banking portal and sent the money to my credit card and was just done with it. That knocked it in half immediately. And with that momentum, I scraped up a couple more thousand just emptying my savings account (not touching retirement, cause I don’t want to do that) and I was able to pay off this other couple of thousand. And then I had a pretty good month or two of work where I was doing some travelling and making some overtime, and so I had bigger than normal paychecks. And then I just used every bit of extra money. It was like, bam bam, and two or three months later it was gone.”
All in all, years of carrying $8,000 worth of credit card debt were eradicated in just a couple of months! All it took was a shift in priorities and a burning desire to get rid of the debt for good. In Brandon’s words, “I’m the kind of person where it’s hard to get me going, but if I get my mind on something, I’ll go to great lengths to accomplish it.”
Fool Me Once, Shame on You; Fool Me Twice…
After two bouts of debt, Brandon has resolved to never have to go through this again. But it’s not always easy to keep this resolve strong, especially as life’s curveballs get in the way. Brandon compared a simultaneous struggle to maintain a healthy lifestyle with staying out of debt:
“I was struggling with weight before in my life and I got the determination to lose weight. I lost 70 pounds in 7 months one time and 60 pounds in 6 months another time. It’s just all about putting your mind to it, being dedicated to the goal.”
And, like paying off debt, losing weight required a change in habits first and foremost:
“I stopped going to fast food places and stopped eating junk and drinking soda. I started going to Whole Foods and eating organic foods and stopped eating bread. What a difference that made. Seriously, without even killing myself at the gym, I lost 60 pounds in six months.”
Now that Brandon is at a healthy weight and debt-free, it’s more important than ever that he maintains the habits he developed to get himself there!
“Now that I’m debt free and I’m not having to spend all of that extra money, I finally had the opportunity to get a little bit of cushion in my checking accounts. I have one checking account for bill payments and direct deposit and another one that’s attached to my debit card that I make purchases with…But now that I’m at zero balance, whenever I see anything that’s not zero, I immediately go and pay it down. It just feels good, you know, having it at zero.”
That cushion can be the key to staying debt-free – not just for Brandon, but for anyone who is or was battling debt. Whether you call it an emergency fund, a buffer, or just simply extra money, having a fund to rely on when times get tough is the key to making sure you don’t have to swipe a credit card to make ends meet. In Brandon’s words, it’s all about dedication: “Just the dedication to it, you know, being willing to set some things aside for an intended benefit, it’s something that you have to do.”
Lessons We Can All Learn
Now that Brandon has won the war against debt, we couldn’t let him go without hearing some of his words of wisdom! So, what can we all do to win our own wars against debt?
“Don’t let it get ahead of you. You’ve got to keep hold of it. And have a plan. If you sit down and you have the goal, ‘I’m going to pay this debt off’, then you can make a plan and use resources like ReadyForZero to help you.
…You know in my case I was able to make big steps to pay off that $8,000, but I recognize that a lot of people can’t do that. And so every little step helps. It’s the accumulation of all those little steps that really make a big difference… You just kind of need to, until you’re out of debt, live your life in the pursuit of that goal.”
Live your life in pursuit of that goal. Whether your goal is to improve your career, pay off debt, or anything else, this is advice that can help you get there in a hurry. Achievement comes down to dedication, balance, focus, and sometimes a little bit of sacrifice. But, as Brandon has shown, it can all be worth it in the end!