3 Lessons I Learned Paying Off $50,000 in Debt


Here are 3 lessons about paying off student debt that I learned the hard way.

Thus far in 2015, my wife and I have paid off more than $50,000 in student debt. Several years ago, we never imagined that this would be possible in such a short amount of time.

Our journey was filled with unexpected house repairs, expensive purchases (a car), a cruise, and plenty of other distractions to take us away from our goal of being debt-free. But, amazingly, we have still been able to eliminate all of my wife’s student debt ($32,000 of $50,000) and a big chunk of our house debt.

As of November 2015, the total amount of college debt in the United States is $1.36 trillion, according to CollegeDebt.com.

The average student in the class of 2015 graduated with $35,000 in student loans, according to the Wall Street Journal. The average pharmacy school graduate has around $115,000 of college debt.

During my fourth year of pharmacy school, my wife and I decided that we wanted to live the freedom lifestyle, meaning a life without debt payments. We did not want to spend the next 22 years of our lives paying $600 a month on student loans. After all, that’s $7200 a year that could be used for fun things like Disney World or a swimming pool.

The problem was we had no idea how we should—or even could—pay off our student loans. Since then, we have read books, attended seminars, and chatted with other pharmacists.

Here are 3 lessons about paying off student debt that I learned the hard way:

1. You need a bigger shovel.

Pharmacist salaries constitute a nice living, but the majority of our income goes toward bills like groceries, rent/mortgage, car loans, utilities, tuition for kids…and the list goes on.

How is it possible to get ahead? Unfortunately, the common answer today is “get on a budget.”

Although budgets are important, they will only help you figure out where your money is going. That said, I don't think having a budget will help you get closer to living the freedom lifestyle.

No matter how much you save, you cannot “increase” the total amount of money available. You are working within the limits of your salary.

Consider this: If you need to dig a hole 15 feet deep, which option will help you complete the job the fastest?

(A) A CAT excavator

(B) A basic shovel

Obviously, a larger shovel gets the job done faster. In the same way, the more money you make, the faster you can pay off your debt.

I've spent the better part of the last 3 years becoming an online entrepreneur. This pursuit has generated a substantial side income.

Granted, I made a lot of mistakes and endured my fair share of failures in the past. I even lost some money. But, overall, I am now sitting nicely with a bigger shovel.

2. A life without regrets is flexible.

I am a stickler when it comes to budgets. I believe that every dollar earned should be accounted for.

I hate unexpected bills at the end of the month. An unexpected $55 haircut? That’s worse news than my cell phone bill, even though I usually go over my data limit.

My wife, on the other hand, is carefree. She believes in things like spontaneity and random shopping excursions at local malls.

Her spirited spending convulsions causes my hair loss. Our opposing desires to save and spend causes conflict in our marriage.

Our “conflicts” degraded into fights about who has control over our money. After causing my wife grief, I realized I would regret my attitude to control our money and how it caused my wife to feel defeated. My intense desire to manage every dollar was killing our marriage.

We decided that my wife should manage the budget. This was the equivalent of walking on a tightrope without a net. I don't liking giving control to someone else, especially the happy-go-lucky, free spirit who for some reason loves to buy more yarn.

To my surprise, I learned the benefits of letting my wife manage our budget. Not only were we paying off bills on time, but she also squeezed in things like shopping and the occasional extra box of Twinkies.

Now, I trust my wife to manage our budget—a decision that I will never regret.

3. Set bigger goals.

We set a goal to pay off $20,000 in student loans in 2014. At the same time, we needed to pay off a $15,000 house renovation loan.

That makes a total of $35,000. I didn’t know how or where the money would come from, but I knew we could try.

We ended up paying off the $15,000 renovation loan, but only paid off around $10,000 in college loans. We didn’t meet our goal, but we came close.

What if I had aimed for a higher goal? Would it be better to fail if you set a goal aiming to repay $10,000 or $100,000?

Let’s say you wish to become healthier, so you sign up for a race. One race is a 5K, and the other is a half-marathon.

In order to meet either goal, you need to take action (running). The half-marathon requires bigger actions (more running).

The larger the goal, the more ambitious the actions. Although you may not meet the target for either goal, it’s better for your health to aim for a half-marathon than a 5K.

I didn’t know how I would pay off my college debt, but I hustled and started an online business to generate extra cash. My financial goal drove my decision to start a business that would generate the extra income that eventually enabled me to meet the mark.

My financial goal in 2015 was to pay off $60,000 of loans. Although we had no idea how we could pay off even $40,000, my wife and I agreed on this in our monthly “budget” discussion, which sounds about as fun as a dental extraction.

I’m happy to report that we paid off $38,000 between January and September 2015. Having a larger goal than the “minimum” pushed me to take larger actions, and my extra effort paid off!

When you aim higher than what you believe you can achieve, you will inevitably begin to make decisions that line up with meeting the larger goal. You may not make your target, but you will achieve more than what you believed possible.

Becoming a debt-free pharmacist is a freedom lifestyle choice. It isn’t for everyone.

In my journey, I’ve learned that it’s easier to pay off debt quicker when you make more money with a side business, be flexible with your spending habits, and set bigger goals than what you believe is possible.

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