Aspiration & Struggle
Debt Success Stories: How 3 Millennials Carved Their Way to Financial Freedom
Debt is a four-letter word. But the reality is that many Americans struggle with debt, but not all in vain. Here are three powerful debt success stories of Millennials who faced their financial baggage head on.
William Parker, 30, of Greenville, South Carolina
William Parker paid down $24,000 of debt in just nine months and one day. It may sound impossible, but to get there, he used a tool you probably already own: a smartphone.
“I used Simple’s budgeting software,” explains William. Simple, a new twist on a bank account, offers a free service called Safe-to-Spend. This shows how much you actually have in your account for spending by subtracting pending bills, transactions, and your savings goals from your current balance.
William tracked down all of his debts, organized them from lowest to highest, and implemented the Dave Ramsey snowball approach: paying off smaller debts first, one at a time. He took psychological wins with every debt paid and kept rolling toward paying off his bigger ones.
But William wasn’t free of challenges during his debt repayment journey. He struggled with eating out too much, but he eventually got himself on track by using Ramsey’s envelope system. He budgeted for restaurants ahead of time, put cash for eating out in an envelope, and only paid using that cash. He also trimmed down on expenses, swapped a new car for a clunker, and started working on the side to put extra money toward his debt repayment.
By using free financial tools and tackling debt aggressively, William crushed his debt in under a year.
Erin, 24, of Charlotte, North Carolina
Erin, freelancer and founder of Journey to Saving, realized she had an issue with debt about a year and a half after she graduated from college and was earning less than $20,000 a year. “I had $17,600 in student debt to start,” says Erin.
She eventually quit her low-paying job and started freelancing. Even with an unpredictable income, Erin was able to lower her debt by making weekly payments to trim down interest. She also put any unexpected money that came her way to paying off her debt, while questioning all purchases before making them.
These tactics have worked, because she’s paid down $10,139 since June of 2012.
Erin advises others in the debt repayment struggle to make a plan. “Running away from your situation does you no good. You have to want debt freedom enough to make the sacrifices that are sometimes necessary.”
Bobby Hoyt, 26, of Houston, Texas
Bobby Hoyt, a high school band director, destroyed his $40,000 of federal student loans in less than two years.
Bobby’s wake-up call came when some financially affluent peers told him he’d need to get rid of his debt if he ever wanted a real shot at building wealth. So Bobby, who shares his story on MillennialMoneyMan.com, took action by living significantly below his means.
“I decided not to buy a new car, house, clothes, shoes, or really anything to speak of during the time I was paying off my loans,” he explains. It caused him some pain to see his peers buying and doing exciting things, but he kept his eyes on the prize, recognizing that he could financially pass his peers in the end by getting debt free now.
Bobby did take a small pause in his aggressive debt repayment to build up an emergency fund before once again contributing every spare penny toward his debt. If an accident occurred, it wouldn’t have thrown him off course or plunged him deeper in debt.
Bobby offers sound advice to anyone working to dig out of debt: “Do anything you can to pay off your debt as fast as possible. Sacrifice like crazy and wait to do the things that people around you are doing with their money. Don’t worry about what other people think of your lifestyle.”