When I started my job in August of 2018, it didn’t take me long to find a friend in one of my coworkers. Mercedes and I bonded over listening to the Dave Ramsey podcast and talking about paying off our debt – I know, we’re nerds! Mercedes paid became debt-free in 2019, so I asked her if she’d do an interview and share a little bit about her debt-free journey. Here’s what she had to say. I hope her story helps motivate you. You can become debt-free too!
Q: How much total debt did you pay off and how long did it take you?
A: About $16,000 in 1 year. I also cash flowed about $1,500 in new tires and struts for my car during this time.
Q: What types of debt did you pay off?
A: $10k in student loans and $6k on my car.
Q: What was your motivation behind paying off your debt?
A: Part of the motivation came from just wanting to follow the Dave Ramsey plan. When I started my first job, I knew it would be better to just pay a large amount towards debt every month as soon as I got my first “real” paycheck before getting used to having the money in my account. My other motivation is that I got engaged and wanted to be debt-free before I got married. It is not a secret that money problems are the number one cause of divorce, so I figured paying off my debt prior to marriage would be a gift to my married self and future husband.
Q: Did you budget/how did you budget to pay off debt?
A: I use the EveryDollar app (sorry – big Dave fan over here). I personally budgeted $1,500 a month to go towards debt. I know this number probably isn’t realistic for most people, but I started as soon as I got my “big girl” job. I was still used to living like a poor college student, so I didn’t have to worry about missing the money.
Q: Did you have to make any major sacrifices to pay off your debt?
A: Not really, but only because I started before I had even graduated from college.
Q: Did you have any friends or family tell you that you were crazy for paying off debt? How did you handle it?
A: Really only my parents, fiancé, and Allison knew of my plans. My parents never used the term “crazy”, but I for sure received a lot of “you can afford that” comments. And my fiancé for sure teased me about entering things into my app as soon as I swiped my card, but guess who’s on the debt snowball train now?!
Q: Did you use the debt snowball or debt avalanche method?
A: Debt snowball.
Q: What is your advice to other twenty-somethings trying to get out of debt?
A: Suck it up and do it! Especially if you are still pre-marriage/kids (if that’s your thing). It is easier to live on a smaller amount of money when you are just getting started, then to get used to a certain way of life and then try to cut back. Plus, it feels so good knowing you do not owe anyone a dime!
Q: What are your future financial goals now that you’re debt-free?
A: I have a few financial goals for the next 4 or 5 years: save for a honeymoon to Rome, get my emergency fund to $10,000, save $30,000 for a down payment on a house, get my retirement contributions to 15%, and save for a vacation to Ireland for my future hubby’s 30th!
I was very excited for Mercedes when she got all her debt paid off towards the end of 2019. Her story definitely shows that you can be debt-free if you work for it. She won’t ever have to worry about owing someone else money and can use her money toward her goals. If you need help getting control of your own debt, check out some of the articles below!
- Debt Snowball vs. Debt Avalanche
- The Budgeting Method that Changed My Life
- 9 Powerful Steps to Reduce Financial Stress