I Am Debt FREE!!!

debt free

Piggy Bank Will Be So Happy!!!

Yes, you read that right.  I am officially debt free!

It probably has been over 10 years since I have been able to say that statement, but I can finally say it once more.  In fact, I’m going to say it again… I AM DEBT FREE!!!

It feels really good to be debt free.  Now I know that any extra money that I have will go towards my savings and maybe, just maybe, I might be able to reach early retirement… early-ish.

The beautiful thing about all of this is that I did in less time than I have initially predicted.

How Much Debt Did I Clear?

Let’s start with some perspective.  According to the Federal Reserve, the average American household has about $44,000 in debt – not counting mortgage debt.  This amount only includes revolving credit card debt ($7,949), student loan debt ($25,745), and vehicle debt ($10,392).

My situation wasn’t this bad, but it was half as bad.  When I started this journey, two years ago, I was $22,000 in debt – credit cards, student loans, and auto loan.  At that time, I thought I was never going to be able to pay off all my debt.

One of the reasons I thought this was because I was accidentally living paycheck to paycheck.  I say accidentally because after I started tracking my expenses and having a written budget, I realized I had more than enough money left over at the end of the month to save and pay off debt.

The other reason was because I was quite content with having debt.  I thought it was just part of being an adult.  “Everybody had debt,” is a very common saying, and a saying that I now get to disprove.

I Had Lots of Help

One of the best tips I can tell somebody trying to get out of debt – or trying to achieve any goal – is to find a strong support system from friends and family.

There are a few things that people should do to get out of debt and become financially independent, such as reading personal finance books, reading personal finance blogs, tracking expenses, starting a budget, living within their means, etc.  But these things will not keep you going, like having friends and family cheering you on will.

Make sure you surround yourself with people that have your best interest at heart and will support you on your journey.

Kate not only gave me emotional support, but she also helped me avoid paying hundreds of dollars in interest by giving me a loan.

Last November I had a plan in which I was going to be able to pay my student loans this year.  I knew how much money I was going to put towards that debt each month and I knew I was getting a tax refund that I could use to finish paying the student loans.

The plan was already in motion, but I noticed that my student loans had 5% interest.  I also knew that Kate had some money saved up – aside from her emergency fund – so I asked if she could lend me some so I could pay off my student loans right there and then without having to pay 5% interest.

I showed her my payment plan and showed her how she was going to get paid by April 2015 (6 months).  Since she had her money in our credit union, which pays ~0.9% interest in savings, I said I would pay her back with 1% interest.  She agreed and I saved myself 4% interest.

I paid off my student loans in November, but didn’t considered myself debt free yet because I still owed Kate – even though my money is her money and her money is her money… wait.

By paying off my student loans this fast, I saved myself over $700 in interest!

You Can Do It Too

We don’t all have a Kate that can give us a loan, but the loan wasn’t what helped me pay off my debt.  It just helped me pay a little bit less in interest.  I would have paid my student loans by the end of April with or without the loan because I already had a plan.

You just have to make a plan of attack and stick to it.  It took me two years to do this, but two years go by real fast.  It might take you longer, or you might be able to do it in less time, but I want you to at least try.

If you haven’t yet, please get a pen and paper, and figure out where you can cut back so you can have extra money to attack your debt.

I haven’t been debt free for long, but I can tell you that so far being debt free feels good.  I’m going to try to keep this feeling as long as I can… or until I buy a house.

Are you debt free?  Do you have a plan to become debt free?

[Photo Credit: Alan Cleaver]

20 comments

  1. CONGRATULATIONS!!!!
    Stefanie @ The Broke and Beautiful Life recently posted…Making More Money Is Everything I Hoped It Would BeMy Profile

  2. Congrats on your debt-free status! Now the goal is staying out of debt forever, right?
    Holly@ClubThrifty recently posted…Here’s What Happens When You Get Ripped Off On Etsy.comMy Profile

  3. Congratulations!!! Now you get to experience the fun side of building your wealth and investing more! 🙂
    Shannon @ Financially Blonde recently posted…Do You Have Financial Vampires?My Profile

  4. Lauren says:

    Congratulations, Aldo! What a great accomplishment. I remember how amazing it felt to pay off my student loans. Hope you have a little mini-celebration- you deserve it!
    Lauren recently posted…Why Every Small Business Needs a BlogMy Profile

  5. Congrats, Aldo!!!
    Kara @ The Daily Whisk recently posted…Chow on the Cheap #1: Turkey BurgersMy Profile

  6. Ken says:

    Congratulations!

  7. Tawcan says:

    Congrats Aldo! That’s a very big achievement and accomplishment!
    Tawcan recently posted…The Early Retirement / Financial Independence Spreadsheet CalculatorMy Profile

  8. Congratulations, Aldo! So happy for you! 🙂 Welcome to Financial Freedom, enjoy it!
    Shannon @ The Heavy Purse recently posted…A New Look and a New FocusMy Profile

  9. Richard says:

    What a relief! It wasn’t so long ago that I found myself in a similar situation so I know exactly how you must be feeling right now. Great job 🙂

  10. We’re debt-free other than the mortgage. We even let savings take a hit in September so we could pay for our new-to-us car outright and avoid a loan. Granted, we were aided by the insurance payout and a relative, but it felt great to not have to deal with financing or a monthly payment.
    Abigail @ipickuppennies recently posted…The road to $10,000My Profile

  11. I’m so pleased for you Aldo! That’s great! And what a good saving too. I’m glad Kate was able to give you an interest free loan to speed things up a little.
    Hayley @ Disease Called Debt recently posted…10 Things I Wish I Knew When I Was in DebtMy Profile

  12. Congratulations! What a great feeling it must be to be debt free! We are working on doing the same!
    Jayleen @ How Do The Jones Do It recently posted…How Do They Do That: Joyful DinnersMy Profile

  13. So exciting! Congrats. I’m so happy for you. Can’t wait to be in your shoes 🙂
    Melanie @ Dear Debt recently posted…Debt, It’s Been RealMy Profile

  14. Wow, congratulations Aldo! That is so amazing! YOu must be over the moon. Enjoy your newfound debt freedom!

  15. Even Steven says:

    Congrats on paying off your debt. I couldn’t have said it better with having a support system around you. My wife is very supportive in our plan to be debt free, but the biggest accountability partner I have is the personal finance community.

  16. Congrats on being free from debt. It takes dedication, but I think we can all become debt free with the right plan in place.

  17. I’m thinking about paying off the fiance’s student loans but never thought to charge interest. I think I might just pay them but I like the idea! His money is my money so either way – it saves me money.
    MB @ Millennial Boss recently posted…My 2016 GoalsMy Profile

  18. Erik says:

    Yeee!! That’s a pretty good feeling that last! right Aldo?
    How is it going now that you’re debt free? have you put aside some cash for investments since March?
    I’ll be around more often, keep posting.

    Cheers!
    Erik