This week I have another great Debt Mindset Series interview with Val, the mastermind behind The Common Cents Club. Val found herself in $50,000 of student loan debt, and she wanted to pay them off quickly so they wouldn’t balloon over the course of her repayment plan.
She also had dreams of being a stay-at-home mom, so she knew she had to make it happen sooner rather than later.
Describe your debt situation. How much you have/had and how you accumulated it.
At age 25, I finished grad school with almost $50,000 in student loans. Most of the loans were unsubsidized federal loans at 6.8% interest, but there was a mixture of other loans in there too.
I was put on a 20-year repayment plan after consolidation, reworked my own plan to try to pay them off in 8 years, and ultimately paid them off in less than three years.
When did you decide your debt was a problem?
When I discovered the nearly $50,000 I was going to graduate with would cost close to $100,000 to repay on the standard repayment plan I was put on, I knew it was a problem. I was fortunate to land a job as a school counselor during a time when school counselors were being cut at record rates.
However, my salary was only $36,000 and it wasn’t projected to reach $50,000 for at least a decade. I felt like I was going to live like a broke college student forever or pay $100,000 over 20 years for something that should have only cost $50,000.
Did you implement a specific strategy to start paying off your debt? Why did you use that strategy?
I started paying off the unsubsidized loan that was accumulating interest first. Then I started chipping away at the loan with the highest interest next. I worked my way down to pay off the lowest interest loan last because it was the interest that would make the difference in how much I would have to repay overall.
So I used the avalanche method because it allowed me to keep the most money.
What were some obstacles you were/are faced with? How did you deal with the days when you lost motivation?
Being surrounded by others who had a more lavish lifestyle was a challenge because I stayed very frugal in order to ‘find’ money to pay off my debt. It was hard to drive the beater car when my work parking lot was filled with shiny, pearly white SUVs that were at least 10 years newer.
Spring break was full of Cancun vacations and tans while mine was a staycation. I also got married during this time, so I had the challenge of planning and paying for my wedding while trying to pay off my student loans. We kept it a very simple wedding so we didn’t add any more debt to our life.
Listening to podcasts of other “weird” people who valued and sacrificed to get a debt-free life and getting my husband on board helped a lot. Finding people who had similar goals (or at least didn’t think I was totally crazy) helped me refocus on what I wanted most when I was tempted with what I wanted right now or comparing to the clothes, cars, vacations, and homes others had. A simple sticky note above my desk helped remind me of my goals and that I was inching closer to that finish line.
Would you prefer to cut costs or earn more to pay off debt?
At the time I was really focused on cutting costs. I had my salary and did the best I could with that. We were super frugal and still are to a degree. Now that I’ve discovered all the different ways to make money, and as I contemplate the best way of paying off our home mortgage, I’m focusing more on earning more money.
Are there any side hustles that helped you on your journey to debt payoff?
I taught summer school one summer to earn about $2,000.
What’s the craziest thing you’ve done to make a debt payment?
I refused to buy a smartphone and pay for data until my student loans were paid off. I got so frugal that I even canceled the texting plan on my phone and refused to pay 25¢ just to respond “k” in order to save money.
What motivates you? What would you say to people who think they can’t get out of debt in an attempt to change their mindset?
Being in debt is not a life sentence. It’s a habit, and habits can be changed. Debt is simply spending more money than you earn. Once you can wrap your head around that, you can take action to earn more, spend less, or both. Having a vision of what you want most in life will help you combat the struggles of what you want right now.
Learn More About Val Breit
Becoming debt free was the first step Val Breit took to design a unique lifestyle full of things that matter most. She started The Common Cents Club, which teaches how to crush financial goals by being smart with your money and time.
You can discover her biggest student loan repayment mistake on the blog or find great money saving tips on Pinterest.
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