She Strengthens

Breaking Free from Debt: Our Extreme Approach

After completing graduate school, I found myself drowning in a staggering $75,000 of student loan debt. The weight of this financial burden was overwhelming, and I didn’t know where to turn. That was until a friend introduced me to Dave Ramsey’s personal finance principles, which sparked a newfound determination to tackle my debt head-on.

The Debt Snowball Effect

Ramsey’s debt snowball approach resonated with me – paying off the smallest debt first while making minimum payments on the rest. This strategy not only simplified the process but also provided a sense of accomplishment as each debt was eliminated. Inspired by Ramsey’s book and online resources, my husband and I set an ambitious goal: to pay off our combined $117,000 of student loans in just three years.

Taking Drastic Measures

To achieve this feat, we knew we had to take drastic measures. We moved in with my parents, drove older cars, and developed side hustles to supplement our income. We also drastically cut back on non-essential expenses, adopting a strict budget that would allow us to funnel every spare dollar towards our debt.

Why We Chose This Path

Some might argue that our approach is too extreme, but we had several compelling reasons to stick to our plan. Firstly, our debt-to-income ratio was alarmingly high, with nearly 50% of my net pay going towards student loan payments each month. Secondly, the less we spent, the sooner we’d be debt-free. By making short-term sacrifices, we’d reap long-term rewards, such as buying a townhouse, saving for retirement, and traveling.

Living with Intention

Our decision to rent a room from my parents came with an unspoken understanding that we’d pay off our debt as quickly as possible. This arrangement not only saved us money but also kept us accountable. We’ve also discovered that the best things in life are indeed free – walks, hikes, yoga classes, and game nights have become our new norm. By focusing on what truly adds value to our lives, we’ve developed a greater appreciation for the simple things.

Lessons Learned

This journey has taught me valuable lessons about mindful spending and the importance of aligning my values with my financial decisions. Once we’re debt-free, I’ll still prioritize frugality, but I’ll do so with intention and purpose. We’re not just paying off debt; we’re building a foundation for a life of financial freedom and flexibility.

The End Goal

Our extreme approach to frugality might not be for everyone, but it’s been instrumental in helping us tackle our debt. By staying committed to our plan, we’ll soon be able to shift our focus towards other goals, such as building wealth and creating a fulfilling life. The journey hasn’t always been easy, but the sense of accomplishment we’ll feel when we’re 100% debt-free will make every sacrifice worthwhile.