How I Paid off $112,000 in Debt in 18 Months

You can add this to the unremitting list of “how I paid off my student loan” articles. I will admit right now that my story is more boring than most.

My secret is that there is no secret: I got paid a salary that made it possible to pay off the debt while living a reasonable lifestyle. There are no magical tricks herein. My story is completely mathematically realistic.

There were a few basic guidelines I followed that helped me pay off the debt.

1. I Reduced Debt Before Repayment
Part of the reason I was able to pay back my debt in such a short time was that a year and a half is not that long a time to sacrifice. Had I taken the maximum load of debt offered to me, it wouldn’t have been feasible to pay off the debt for several years, and I likely would have given up the fast-paying scheme.

The more interesting articles are why I only accumulated $112,000 in debt as opposed to upwards of $180,000, which is the full cost of tuition, fees and approximate living costs at my law school for three years, without interest:

How I Saved $65k in Four Years for Graduate School

How I Saved Tens of Thousands in Law School

It also helped that I was entering a profession that offered jobs that could be high enough to pay off this debt in a reasonable time period. I worry sometimes that these amazing debt paying stories may encourage people to accumulate huge debt while preparing to enter low-paying fields. Don’t accumulate so much debt that it becomes mathematically impossible to pay back!

2. I Used my Bonuses
I was lucky enough to get two bonuses during this time period, both of which I put completely towards my debt. I didn’t even consider using the money to buy anything else.

3. I Plowed All of My Money Towards Loans First
After bonuses, I paid about $5,000/month for 18 months to pay off my loans. I had an auto payment of approximately $3,000/month (which was 3 times my minimum loan payment) and then I would make periodic payments when it looked like my bank account was too flush. I could have made a higher automatic payment but I get paid every 2 weeks, making some of the accounting more difficult than getting paid twice a month, and I had already had one disaster where extra expenses left me without sufficient funds to pay my rent and credit cards on time. I figured I’d give myself a little more leeway on the monthly payment.

Instead, I would make extra payments when my bank account looked high. There’s something about having large balances in my bank account that encourages me to spend. Low balances, even if they are artificially low – like the money is in a separate bank account – subliminally encourage me to spend less. So the extra payments served both to pay down my debt and discourage spending. Still  it was really difficult writing such large amounts to pay out of my bank, particularly after loan payments were already taken out. It was like ripping a bandaid off. You force yourself not to put it off and then when you get to it, you do it quickly and move on. If I had given myself the option, I would have left the money to wallow in my bank accounts. But I was determined to pay off my debt so I made sure that

4. I Knew the Value of Money
After maxing out my 401k, transportation, taxes and health benefits, and after rent and utilities, and paying off my loans, I was left with about $1,100/month. That covered the cost of my car, home goods, clothes, food, insurance – basically everything else. For a lot of new lawyers, $1,100/month is too low. (I knew a classmate that was renting a $7,000/month apartment after all).

But $1,100 was enough money for me and I knew it. When I was an entry level employee, I lived on just a little bit less disposable income, because I was maxing out my 401k. And I remember during that time wanting for nothing.

I was also used to living like a law student.  Knowing that I could survive on less was invaluable knowledge to me; I wouldn’t have paid off such large chunks of debt so quickly had I thought I would have had to feel deprived.

5. Everyone was in the same boat
I knew I could live on less, but I also had more expenses in this time period than before. The most difficult parts during this time were moving into and furnishing my apartment, buying a professional wardrobe, and paying off some hospital bills. Also I was much older and I was in a much better-paid social sphere.

It helped that most of my friends were also paying back loans and lived similar lifestyles. I also had a lot of friends that were supporting their parents with their salaries.  It also helped that we were all working such long hours our first year that we had very little time to blow through our money. (Some people though would take this as license to spend more).

I felt that I was able to maintain a fairly comfortable existence – just without any lifestyle inflation – and I knew that the time for watching my purchases was short. It was a small price to pay to be debt-free in 18 months.

***

So there you have it – I paid off my loans by reducing the loans I took out, making enough money to cover the loans I had and then just throwing money at the loans until they disappeared.

It was technically possible, and indeed my initial plan, to pay off the debt in one year. But I thought my life was becoming too Spartan. I had increasing visions of dying without having bought a sofa for my apartment. So I went on Craigslist and I bought a sofa and chair for $60. (frugal doesn’t change, natch).

Whatever your plan, being debt free is amazing.  I don’t regret any part of it (even law school, which is rare among lawyers).

Do you have any debt repayment tips?

The Ugly Truth about Frugality

I haven’t done many diets because I hate the idea of restriction. I lasted about 4 days on a no-carbs diet and they were some of the most miserable days of my life. But one that has stuck is the “one meal a day” diet.

I started by skipping breakfast. That was quite easy. I immediately didn’t miss it. Skipping lunch was much more difficult and I could feel the hunger eating (haha) me alive. But it got easier as my body adjusted. And the hunger would subside after 15 minutes, max. And when I finally eat my meal of the day – dinner – I eat without abandon. There are no restrictions. There is always dessert. So it seems like a joyous celebration rather than a constant level of restriction.

I think the parallels to personal finance speak for themselves. I look at other people’s spending, and I’m pretty shocked about the constant frittering of money.

For me, I’m pretty used to wanting something and not buying it. It seems that for a lot of these people, that’s not how they do it. They get the itch and they scratch. I get the itch, and I store the itch in a file and revisit the itch in a week.

Frugality often reminds me of my diet. I’ve heard supermodels complain that they’re always hungry. The truth about frugality is that it often feels like you’re hungry all the time as well. Frugality means you just ignore these “hunger” pangs. If you think about frugality as a whole, you’ll feel like you are constantly living in a state of desire and denial. You’re always craving.

Sometimes you’ll feel like you’re deprived. Sometimes you’ll feel like you don’t have enough. You will have a list of things a mile long on your “to buy” list. That’s just the truth of denying what you want. It doesn’t get easier. Unless you have a way to tune out all marketing, there will always be new things that make you itch for more.

Of course, giving in to your desires isn’t what you truly want. The problem with scratching every itch is that your skin will be all scratched up. The problem with eating whenever your hunger strikes is that you’ll often eat too much. You don’t recognize the signals to stop eating anymore and you may start mistaking signals for thirst or boredom for hunger. And as your weight balloons, you start to worry about every time you eat, trying to restrict at all times. Sometimes it’s better to restrict from the get-go.

The upside of ignoring your desires is that 90% of the desires will go away and often quite quickly. And rather than having a lot of products that you can barely remember desiring, you’ll have a fat checking account.

It reminds me of co-opting and bastardizing Steve Jobs’ graduation speech motto, “Stay hungry. Stay foolish.” But here, “Stay hungry. The hunger will go away.” The caveat is though, you still remember to eat and when you do eat, relish every moment of it.

[I thought about submitting this article idea to a personal finance site but figured it would get a lot of backlash because the idea of restricting one’s meals is basically as unpopular as saying “Trump’s doing a good job.” People will accuse you of encouraging eating disorders. Meanwhile, we’re facing an obesity epidemic in conjunction with widespread malnourishment. To the extent this counts as advice, it only applies to people who don’t have an eating disorder. Please take care of yourselves. ]

Making Frugality Fun

I’ve always been a frugal person and I consider myself a disciplined person. But sometimes I read personal finance blogs and it all seems like….a drag. If you read these blogs, it seems that to live a frugal life, you have to aim to be a monk. You have to live a life of deprivation. You have to deny yourself, deny yourself and then deny yourself some more. And then you retire or die.

I think your self discipline gives way though. And even if it didn’t, at some point you realize that life is short and you don’t want to spend it denying it and being unhappy.

So if not a life of deprivation, then how does one become frugal? I thought about this when I was selecting a restaurant for dinner. One place looked much fancier, was packed and looked fun. The other was half the price in a much simpler atmosphere. But after we picked the cheaper restaurant, choosing foods was much more fun because, for the same price, we had so many options. And it dawned on me, frugality can have benefits beyond saving money.

Frugality can lead to more options
Rather than look at frugality as a way of limiting your options, frugality can allow us to have more options. If we are at a cheaper restaurant, we can choose more foods for the same price.

Frugality can lead to more creativity
If you get an expensive piece of furniture or clothing, you invest resources in trying to protect it and care for it as is. If you get a cheaper piece of furniture, you can spray paint it, reupholster it or have money to add pillows or decor.

Frugality can let you optimize your results
I am a woman who loves reading about beauty. I don’t necessarily love spending the big bucks on beauty but I voyeuristically look at other women’s medicine cabinets, as posted all over the web, and I’m shocked to see so many tiny bottles of very expensive potions and primers.

I know if I bought a lotion or “miracle product” for $100 or more a pop, I would use as little as possible to preserve the product. See, look at this. I would have spent $100 and I would be tiptoeing MY life to preserve IT. It’s pretty weird. It’s like having a child or a dog. Except it’s a beauty product. The products you buy should serve YOU. Not the other way around.

And the thing with skin care is, your skin needs moisture. Maybe this miracle product is better at moisturizing your skin than a cheaper product. But is it better than products that you actually aren’t afraid of applying multiple times a day all over your face and in indiscriminate quantities? Likely not. The moisturizer can’t moisturize skin that it doesn’t touch.

So I say, buy the products that you are not afraid to use, that serve you, rather than the other way around. And while you may feel frugal using a nonfancy moisturizer, it feels incredibly abundant to be able to use your products without abandon.

Frugality can save time.
Piggybacking off the previous idea of saving product because it’s so expensive is that expensive things make us think we should take better care of them. I take the time to be gentle to my expensive purses. I would consider saving an expensive face cream in case of a fire. But doesn’t that make you feel rather poor and insignificant? Again, you’re spending your money to WORSHIP A PRODUCT. The product should serve you, not the other way around.

Yes, you should take care of your things. There’s no need to be reckless. But there’s something wonderful to be said that it can all burn in a fire and I wouldn’t risk my life for anything (but my laptop would certainly be nice). It’s also nice to think, ok so my stuff is getting a bit of wear and tear. Well that’s what they’re there for.

Frugality can just be fun
A lot of frugal activities are recommended because they save money but often they’re just more fun to do. Hosting people over at my house is one of my favorite things to do and creates great memories. It’s great that it’s cheaper than paying for the same number of people to go to a restaurant and may even be cheaper than one’s own portion at a restaurant, if you factor in gifts of food and wine and leftovers. But mostly, I do it because it’s fun. I bike to work because it’s fun, but it does save money.

I think if you live your life in a way where most of the reasons you do things are because they’re frugal, you’ll burn out and get sick of it. You’ll get so tired of being a slave to money that you might give up on the idea of saving money altogether. If you do things for the reason that they are fun, but they could also be frugal, you are so much less likely to burn out. You’re living your life according to what makes you happy and really enriching your life by being frugal.

What kinds of things do you do because they’re fun but that are also frugal?

This is the Secret to Being Healthy, Frugal and Happy

It dawned on me recently that I had lost ten pounds and was keeping it off. My legs had never been so toned, my skin was glowing and I was BM-ing like a rock star.

And it wasn’t because I had amazing willpower. It wasn’t because I was forcing myself to eat iceberg lettuce or dragging myself to the gym. What was surprising about my transformation was not so much the transformation itself but how little sacrifice I had made.

This is exactly what I do for eat and exercise:

Meal plan: I eat one meal a day, usually. I don’t have any restrictions on that meal. I can eat carbs, sugar, starches, dairy, whatever I fancy.

Exercise plan: I bike to work most days and go for a long run or bike ride on the weekends. This amounts to half an hour to an hour of cardio. Every now and then I lift weights or do body weight strength training exercises.

So am I saying you should do these same things and will get the same results? NO!!! The secret to losing weight and getting toned aren’t what I do.

The secret is: I love this diet and exercise program.

I don’t eat this way or exercise this way in order to change the way I look. If these activities made me fatter, I would probably reduce them, but I would still try to find a way to keep doing what I’m doing. I look forward to them.

I mean, I generally have excellent self-control, just not for diets. I have only ever been on 2 diets and I quit both early. Gained back the weight. And you know why? Because people aren’t great at making themselves miserable. People hate telling themselves they can’t have what they want. And you know what? That’s ok!

It’s ok if you want to be happy. The secret isn’t to learn how to deal with misery. The secret is to find a way to get to your goal that you frickin’ are addicted to.

So if you love binge eating, as I do, and hate restricting yourself from certain foods, maybe intermittent fasting is for you. Maybe it’s working out so much that you can eat as much as you like. Maybe it’s savoring your food. Maybe it’s going for a walk after you eat.

If there’s a healthy food you love, focus on incorporating more of those into your diet rather than what you “can’t” eat. So if you love apples, eat an apple before your biggest meal. If you love radishes, roast them, saute them, eat them raw with salt and pepper. Make the healthy thing you love the appetizer and it turns out, you’ll end up eating a delicious craveable healthy food and there will just be less room for the unhealthy.

The secret to being frugal is not to deny yourself everything but to concentrate spending on the things that you love. As an obvious first step, stop paying for stuff you hate. Stop paying for the gym if you hate going to the gym. Get rid of anything that’s only ok or that you just do on autopilot.

And then focus your attention on things that you love. Focus on travel and then it becomes easier to stop shopping. Focus on seeing loved ones and you start bringing your lunch to work. Focus on getting your company off the ground and you will gladly cut cable.

Whatever it is, the secret to being happy and being healthy is to make it consistent. And to make it consistent, think about adding more pleasure instead of adding more pain.

The problem is not with you. It’s not that you lack willpower. It’s that you shouldn’t use willpower for everything.

What craveable healthy or frugal habits can you incorporate into your life?