"It took having several honest conversations with myself to keep me on track with my goal of not being in so much debt the older I get."
What was your "enough is enough" moment?
My enough is enough moment was approaching my 31st birthday and realizing that I didn’t want to carry this $26,000 debt around anymore. I had really been thinking about how I want to live my life as I get older.
You see, the older you get, the more likely it is that your responsibilities will increase especially if you go on to have children. I didn’t want to keep paying student loans into my late 30’s or 40’s. Being in debt robs you of your peace of mind.
How much debt did you pay off in total?
I graduated with my Bachelors and Masters degree and a total of $26,000 in student loans. I took a standard repayment plan. This means I was scheduled to pay it off in 10 years. I began making payments of $294 monthly in April 2014 and sent a balloon payment of $20,000 from my savings account in April of 2017 saving myself 7 years. My loan was at an interest rate of 6.5%.
How much income were you earning when you/as you have accomplished this?
I don't earn six figures, that's for sure!
What specific things did you do to save that $20,000 you put towards your debt?
I drove a 1999 Toyota Camry for 9 years. Having an old car saved me a ton of money on insurance and interest. When there’s a lien (car note) on your car, you are required to maintain full coverage at all times. I also had no car payments because I bought the car for cash in 2008.
I only had to keep up with routine maintenance like oil changes. Of course, over time, I had to do some work like replacing the timing belt, water pump, and radiator but that is normal wear and tear. My car was one of the most reliable possessions I had.
I chose not to have a car loan because a car loan is a liability especially if you have no business to write it off against. Most people have gradually accepted having car loans as being normal. It isn’t.
The same way a lot of people believe driving a used car is a bad deal because it could break down on you. There are many good used cars out there. Get a mechanic to check on your car before you purchase it and that’s why we have services like CarFax.
Also, I’ve tried to keep my housing expense low. Rent is such a major fixed recurring expense. For most people housing takes up the majority of the budget especially if you live in a city like New York. It is important to keep your housing cost low.
How did you keep yourself motivated?
Staying motivated meant that I had to be as logical as possible. You know why people say “cold hard cash”? Money has no emotions. Emotions and money don’t mix. My friends occasionally made snide comments about my old car because they felt I could be driving something better. I’m not going to say it didn’t get to me. Sometimes, it did.
It took having several honest conversations with myself to keep me on track with my goal of not being in so much debt the older I get. My Camry wasn’t problematic at all. In fact, in the last year, I made many road trips and never had any trouble on the road. So why fix it if it ain’t broke?
How did you manage the days where you just wanted to go out and spend money?
Maintaining a visual of being and living debt free was motivation enough to keep me from running out and just spending money. I do enjoy treating myself every now and then though. I recently just started traveling and I don’t spend on things anymore. I spend on valuable experiences.
What would be your money advice to your 21-year old self?
My money advice to my 21-year old self would be to always save for a rainy day because those days will always come. Have a mentality of accumulating assets (not things) early because time goes by so fast and assets yield interest over time.
What steps are you taking to ensure your debt freedom is permanent?
I am keeping away from any loans; student loans or car loans, personal loans etc. I just changed my car too. Two weeks after paying off my student loan, someone hit my car while it was parked outside in front of my place. My car insurance company called it a total loss and I had to get a new car. Luckily, I had some emergency funds left and was able to buy another (used) car for cash at $5,800. I love my new car! I think it was God’s way of saying, “Okay girl, get a new car already.
What advice would you give anyone reading this looking for encouragement?
You need to decide what is important to you and how you want to live your life in 5, 10, 15 years from now. It may seem like a long time but it comes before you know it. Would you like to party and have all the fun now while ignoring your debt? Getting into debt is easy; paying back is the hard part. It doesn’t matter how deep in the financial hole you are, you can still get out of your bad situation if you start taking small steps today.
Thank you so much for sharing your amazing story Ogechi!
You can keep in touch with Ogechi via Instagram and Facebook: @onesavvydollar or send an email to [email protected]