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How I Paid Off $20,000 in Debt in 6 Months

How I Paid Off $20,000 in Debt in 6 Months

It seems as if it’s almost impossible for Millenials and GenZ to get ahead financially these days. Record inflation, insane gas prices, and a tough housing market are just a few of my generation’s hurdles on top of the student loan and mental health crises.

As a fully remote worker even before the pandemic, I knew that I could break the “broke millennial” stereotype by getting serious about my finances in early 2020. (Travel wasn’t an option so it wasn’t like I could spend my discretionary income on plane tickets, anyway!)

During the COVID lockdowns, I read every article, blog, and book I could about financial freedom and knew I had to make some “drastic-to-me” changes if I wanted to set up my future self for success.

I got so serious about my finances that I paid off $20,000 in debt in just six months. Here’s how:

You must know where your money goes each month, full stop. There are tons of free tools on the internet to help you create a household budget, but I prefer a Google Sheet. In my budget, I have two columns: monthly expenses and the amount. Then, I have rows for expenses ranging from the greatest to the smallest. My mortgage is first, then groceries, utilities, and so on. Some financial gurus swear by a Zero-Based Budget, which is sort of what my husband and I follow. We have set categories for eating out, streaming services, and entertainment, but we also have a set minimum that must go towards debt each month. Our budget doesn’t quite hit zero each month, but what is left we roll into sinking funds such as house projects, travel, and Christmas presents.

Remember that budget I mentioned? All expenses need to be discussed before cutting. For us, it was multiple streaming services and digital subscriptions. I realized it was cheaper to share logins with family members and that I was accidentally paying for two of the same accounts with different email accounts. Free services that scan your bank account or credit cards can find mistakes like this and give you a better idea of what subscriptions you’re actually paying for.

The pandemic was great for cleaning out my closet and home office. Use apps like Poshmark, Mercari, or Facebook Marketplace to list your gently used clothing, electronics, or collector’s items and watch the cash roll in. Be aware that new tax rules are going to make it harder to start and maintain a reselling side hustle. I was able to make an extra $500 in the course of a few weekends by listing items I no longer used or wanted. Pro tip: be as detailed as possible in your listings and include the dimensions and condition of your item(s). Take high-quality photos on your smartphone by remembering the rule of thirds.

In the age of the Great Resignation, it should go without saying that making more money is key if you want to greatly pay down your debt. For a year and a half, I was technically working two and a half jobs. I was a director of marketing for an organization on the West Coast while I was juggling 15 freelance contracts on the East Coast. I would start my day at 8 a.m.; I usually ended around midnight. Rarely would I give myself a weekend off. COVID was still rampant, which didn’t allow for much social time anyway, but I greatly prioritized making money over my social life. Whether it’s freelancing, negotiating a raise, or changing jobs, bringing in extra income was instrumental to paying down debt in such a short timeframe.

There’s a reason why minimalism is hot right now—it’s because material things won’t add very much to your happiness. With an influx of cash, I was tempted more than once to treat myself at the mall, but I had to really change my mindset and remember that the short-term satisfaction wasn’t worth straying from my financial goals. I started frequent garage sales and thrift shops instead of splurging at department stores if I felt the urge to just “shop” or if I was in the market for new-to-me seasonal decor. The thrill of the hunt turned into a passion and I’m proud to say that the majority of my home décor is second-hand. (Great for the environment and my wallet!)

I completely paid off my car and some student loans while saving for a down payment for my house. Now, am I 100 percent debt-free?

Not quite, but I’m getting oh-so-close and taught myself more about personal finance than I ever learned in school. Despite the current state of the US economy, young people can turn their financial situation around—it just takes planning and dedication.

This article is republished courtesy of the Foundation for Economic Education.

Image credit: Flickr-Marco Verch, CC BY 2.0.



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  • Avatar
    Jerry Collins
    October 26, 2022, 11:04 pm

    Things have never been easy for any generation. We have all had our challenges to deal with. A good start in adult life is not buying more education than you can afford.

    School and housing might have cost less, but wages were significantly lower.

    After college graduation in 1978, we were experiencing the worst economic recession since the Great Depression, and with my liberal arts degree I was working two minimum wage jobs. My budget was so tight I could either eat breakfast at McDonalds and walk seven miles to work, or ride the bus on an empty stomach.

    I was drafted out of college, and after a stint in the army I graduated in 1978 with a degree in sociology. I ran up a college debt of $3,000. The dollar has been devalued about twenty times since then, with a dollar today having the same spending power of a nickel then. So, my $3,000 debt would have been about $27,000 today. After graduation I worked two jobs earning minimum wage, and money was tight. I paid off my student loans in about two years, applying everything from my second job towards paying it off, and living pretty lean on my income from the first job. I worked from 6AM to 11PM Monday through Friday. And worked another part time job all day each Saturday.

    I was very, very poor, and had to cut expenses until I worked myself out of it:

    I had room-mates through college, and for several years afterward, to split expenses with.

    I bought discount dish detergent (lemon scent) and used it for laundry, dishes, body wash, and shampoo.

    Since I smoked at that time, I bought a huge can of rolling tobacco each month and smoked it through one of two inexpensive Doctor Grabow pipes.

    I bought a dental cleaning pick and disclosure tablets, which allowed me to keep my teeth clean and plaque free.

    I learned how to cut my own hair, because I couldn’t afford a haircut.

    I ate spoonful’s of peanut butter to keep hunger pangs down.

    I’d buy a 25 cent cup of coffee at a fast food restaurant, and fill my pockets with crackers and ketchup packets so I could make tomato soup when I got home.

    I continued to work two minimum wage jobs from 1978-1981, then dropped one job so I could attend computer programming school evenings and weekends for a year. At the end of it, I got kicked out of my apartment for non-payment, and was homeless for a couple of months, sleeping on friends’ sofas, before I got my got my first job programming computers.

    Since I had no car, I would ride the bus to a different part of town each day, and walk from place to place handing out resumes. By the end of two months, I had holes in my leather soles. But I found a computer programming job, and things got better.

    Deprivation is a huge motivator. It gets you busy moving your ass and making things better. I don’t ever want to do that again, but I did it when it was necessary. I did what needed to be done, for as long as it needed to be done, until it was done.

  • Avatar
    July 16, 2023, 3:53 pm

    I adore this article!


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