Engrave I Came, I Saw, I Conquered Debt on My Tombstone

At one point in my life, I believed I would always have debt.  Now I have the confidence of Steph Curry turning his back before his shot goes in.  I was born to win.  Go ahead and engrave “I Came, I Saw, I Conquered Debt” on my tombstone already!

-Peerless Money Mentor

 

Eliminating Debt

While being debt free is an incredibly worthwhile goal, I know many people who do not believe it is possible.  I am here today to let you know that being debt free is achievable.

How do I know is the question you might be asking yourself!  It is a fact because I am using methods learned from studying personal finance to destroy my own debt.

Prior to seeking a solution, I was facing a ten year debt sentence.  I thought I would be in Broke Phi Broke forever.  But there was hope!

The Power of Belief

I came, I saw, I conquered Debt

“Whether you think you can, or you think you can’t–you’re right.”

-Henry Ford

People rarely attempt what they think is impossible.  If you think that paying off debt is impossible, you will hesitate to take action.  Burying your head in the sand and not taking action ensures that your debt will stick around forever.

Think about the last time you accomplished a goal.  Ask yourself these questions.

  • Would I have taking action to achieve my goal if I did not believe it were possible to accomplish?
  • How did accomplishing your goal make you feel?
  • If someone were to tell you the goal you accomplished was impossible for them, what advice would you give them?

Getting Past Feelings of Shame

Another obstacle that gets in the way of a person paying off debt is getting past the shame of having it in the first place.

While I cannot speak for others in debt, I can share with you how being in debt made me feel at one point in time.

  • I was afraid to share with friends my how bad my financial situation was
  • I felt like a failure.  How could I graduate with two business degrees and be stuck in this financial mess?
  • My feelings of shame prevented me from seeking help

After gaining your confidence and getting past the feelings of shame, it is good idea to write why you want to get out of debt.  Referring to this statement can help keep you motivated.

If you need help coming up with a reason for why you want to get out of debt, let me help you by sharing my why!

Why Eliminate Debt?

In an upcoming article I wrote for Business Insider, I was asked what my money philosophy was.  Here is what I wrote:

At this point in my financial life, my money strategy is simple: kill debt to build wealth.  My main focus right now is eliminating all consumer debts. I have a couple payments left on my car loan and two personal loans.  After knocking those out, I will focus on knocking out my $6,000 in student loans.

Knocking out these loans will allow me to increase my cash flow.  Having an increased cash flow will allow me to save and invest more.  Being able to save an invest more money, will increase my chances of becoming wealthy!

While your why may be different than mines, I am willing to bet you want to increase your chances of becoming wealthy.

Now that we have covered how to develop the confidence you need to conquer debt, let’s look at two methods of attacking debt before diving into some actionable tips.

Two Methods of Attacking Debt

Two well-known methods of attacking debt are the snowball and avalanche methods.

Debt Snowball – paying off your debt from smallest to largest, regardless of the interest rate.  This method was popularized by Dave Ramsey.  It ignores interest rates, and instead focuses on building momentum.  The idea is that when you pay off a small debt, you will be more likely to stay committed to paying off debt since you are seeing some progress.

Debt Avalanche –  paying off debts from your largest interest rate first to your smallest interest rate.  Using this method saves you more in interest payments.

Pick a method that works for you and stick with it.  Mustard Seed Money has written a post that probably explains the two methods better than I have done here.  It is titled How to Crush Your Debt.

Now let’s move on to the actionable advice I promised!

Refinancing Existing Debt

$10,000 spread across different credit cards
  • Best Buy – consumer electronic purchases
  • CareCredit – medical expenses incurred because I chose not to get health care (Thought I was young and invincible)
  • Capital One – Sadly, I do not remember what expenses were placed on this card
  • Gordon’s Credit Card – Ring I purchased

See Related Post: Reselling a Diamond Ring After a Breakup

If you have good credit, refinancing can save you a ton of interest.

When facing my 10 year debt sentence, I had no clue what to do.  Then I remembered reading somewhere that credit card companies might lower your credit card rate if you ask.

This would be a big win for me; at the time the interest rates on most of my cards were 18% and above.  It would take me ten years to get out of debt if I paid the minimum on each card.

After calling the credit card companies to negotiate my interest rate, I was highly disappointed.  None of the companies I spoke with could offer me a lower rate.

Although I was highly disappointed, I knew there had to be another way to solve my credit card problem.  That’s when I remembered a friend suggesting that I refinance my debt using personal loans.

Success!

The first lending company that came to mind was Lending Club.  Lending club is a peer to peer lending platform that connects borrowers with investors.  I quickly filled out the application and was approved within a day.

I got an interest rate of 4.99% + a loan origination fee of $50 (1% of loan amount).  While the loan origination free surprised me, I was happy that I got a low rate!

Success * 2

You may be thinking to yourself, “Why didn’t he get a personal loan for $10,000?”  If I remember correctly, the interest rate on a $10,000 personal loan was higher.

To get the other $5,000 needed to refinance my debt, I chose to go through my city-parish credit union.

When I walked into the loan office, I was totally unprepared.  I had to write out each loan I had listed in my name, including the car loan I cosigned for an ex.

After speaking with the loan officer about my problem, she revealed that she had to refinance debt herself.  I no longer felt as bad about being in debt.

The credit union approved the 3 year loan at a 4.99% interest rate + an origination fee of $50.  The payment for the loan is directly taken out of my government paycheck.

I have four more payments left on this loan but I might pay it off early.  While this strategy shaved years off my debt repayment plan, I continued to rack up some credit card debt.

Balance Transfer

Old habits like racking up credit card debt die hard.  For refinancing to work, you want pay your credit card balance in full each month.

If you cannot pay off your balance in full each month, I highly recommend not using your credit card.  There is a way to fix this situation if you find yourself right back in debt.

The solution is to get a balance transfer.  While most cards charge a balance transfer of 3%, the Chase Slate does not have one.  Provided you transfer a balance to the card within 60 days.

Lowering Your Expenses

When I first re-discovered personal finance, I listened to Dave Ramsey almost every morning.  While he should be given credit for helping families get out of debt, I find that he did not have much practical advice to give about how to boost your income.

So I primarily focused on cutting back my expenses.  When my friends asked me about joining them for a vacation, I told them I would not be able to make it.  That I was focused on knocking out my debt.

Even though I lived with my brother and cousin and shared rent,  I was super focused.  Dave would have been proud of my gazelle intensity.

I told myself, “I don’t deserve a vacation”  Living below my means was miserable.  What I failed to realize is that you can always figure out a way to increase your means!

See Related Post: No Vacations? No Thanks, Dave Ramsey!

Increasing Your Income

To increase my means, I started doing side hustles mentioned on personal finance blogs.

In addition to doing side hustles, I started driving for Uber last August.  Driving for Uber has increased my income more than 25%.

This increase in income allowed me to start a vacation fund.  After paying off debt, I plan on pivoting somewhat to focus on increasing my main income.

While side hustling is great way to pay off debt faster, it gets in the way of spending quality time with your friends and family.

For example, a couple weeks ago I showed up to my Godson’s softball game.  When my sister saw me, she said, “Wow, it is a miracle!  We never see you.”

See related post: Fascinating Things I’ve Learned From Uber Pax

Closing

Being in stuck in debt can prevent a person from building wealth.  A lot of people choose to bury their heads in the sand, instead of attacking it!

Don’t be that person who buries their head in the sand.  While I understand you may be overwhelmed by your debt load, don’t let that stop you from taking action today!  You can conquer debt!

Maybe you share my goal of wanting,” I Came, I Saw, I Conquered Debt” engraved on your tombstone!  Hopefully not, though!  We both know there is more to life than paying off debt.

However, paying off debt sure does make living easier!

Community Feedback

  • What is your debt repayment strategy?
  • What would your life look like if you were debt free?
*Disclaimer*

Depending on your financial situation, you may need to seek professional financial advice.  I am just a personal finance addict who loves to write 🙂

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