Debt-free & Broke: Wahoo!!

Two days ago I cashed out a GIC (before maturity, I don’t want to talk about it) and transferred at terrifying $1,200 out of my Emergency Fund (now below $1,000, don’t want to talk about that either) and wiped out the remainder of my student debt. As you might know, I’m partial to cashing out investments to make ridiculously large debt payments when I’m feeling blue.

Screen Shot 2013-07-11 at 11.52.37 AM

Ok, not totally, there’s actually still $88 owing, but I have a monthly automatic payment of $97.29 that will wipe that out on the 31st of this month so I just wrapped it in to the final total ok? I guess I could have just pulled another $100 out of my EF but I was feeling pretty poor as is so I just decided I can wait until payday and let the regular payment wipe out the remainder of my debt at the end of the month.

Stats:

I paid off a total of $21,628.12

which was $20,580 principle and $1,048.12 interest

over 22 months

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And the reason I did it was because I was sick of being in debt, there was no reason to be in debt anymore, and I just wanted to move on.

Just less than 2 years is not a long time to carry a student debt load that purchased an entire undergraduate degree, but before I tackled my $21,000 student loan debt, I had paid off nearly $10,000 of consumer debt in undergrad. Yep, you read that right: my early-twenties cost me over $30,000. Granted, a Bachelors degree ($21,000) and braces ($6,000) were worthy purchases, but the rest was a lot of junk. I’m just glad I always held a part-time job or two or it would have all been much, much worse.

I had debt fatigue to the max, and my bandaid of choice was lifestyle inflation. I realize I’m one of the lucky ones: I found a good job after school. My starting salary at my job was over $50,000 and came with full benefits. In addition to this, MoneyAfterGraduation.com grew and expanded to the point that I was able to generate a small income from the website but also market myself as a freelance writer. Halfway through 2013, I’ve already grossed $40,000. I don’t say this to brag, I say it to point out what a joke it was that I had debt at all, and how sometimes that made me feel a little bit like a fraud. Now, people knew this and I received the occasional criticism for my traveling with debt, shopping with debt, etc. but probably not nearly as much as I deserved. I will always err on the side of 90% responsible with money, 10% spend-like-you’ll-die-tomorrow.

I stayed in debt from a number of (stupid) reasons:

  • I wanted to stay relevant as a personal finance blogger for students & new graduates
  • I wanted to invest my money in the stock market
  • I wanted to save more for retirement
  • I wanted to go on more vacations
  • I wanted to buy more things

I know better than anyone there was no reason for me to carry around $3,700 of student loan debt for nostalgia and to stay relevant as a personal finance writer (I realize how ridiculous this sounds but this honestly went through my mind every time I considered wiping out my debt! Would my readers still love me when I’m debt-free?). Obviously being debt free and having your finances in order is the ultimate goal of every personal finance blogger, but I feel a little guilty anyway, and I would even go so as far as to say I feel left out. The PF community is pretty rad, but I know better than to stay in debt for the sake of blogging ;)

So ends my out-of-undergrad-debt journey. Good news: there’s still a lot to say about money once you are debt-free. Furthermore, I still have two awesome writers, Gillian and Erin, that are thankfully still in debt and can keep the spirit of MAG alive. Is it weird that I just said “thankfully still in debt”? I say it with love.

I needed to get out of debt to start the next chapter of my 20-something life. Maybe this deserves a post of its own, but I DID find a new apartment that has nearly all the things I wanted (balcony! dishwasher!). It’s more expensive than my current one and will need to be furnished, which was also motivating me to shake my debt balance so I could start completely new…. of course wiping out my debt means I have to go without furniture until like, October =(

So I’m broke. But I am debt-free.

S0zl2

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Comments

  1. WOOOHOOO! Congrats!

    • Thanks Michelle! You started it all ;)

      • Paula Gould says:

        You will never regret paying off that debt and starting at zero. You have your whole life ahead of you to build up equity. Be thankful you are one of the minority of young people who are bothered with carrying debt loads and take measures to eliminate their debt. Think of all the interest you will save by paying it off earlier rather than stretching your payments over years, decades.. Way to go!

  2. Congratulations! PF bloggers that were able to work their way out if debt early are still as inspirational as those still digging out of the hole. Also, being debt free without furniture is it’s own kind of fun… I mean, it won’t FEEL like fun, but since it’s by choice, you’ll be surprised at how happy you are looking back on it. B and I lived with our inflatable mattress as our only piece of furniture for two months and that thing became bed, couch, table, and lean-to fort. Now it’s a celebration any tune we find a new piece of furniture. Congrats again!

  3. Congratulations Bridget!!! You must be so happy to have those loans gone and in such a short amount of time too!!! I will still continue to read MAG, student loan debt or not ;)

  4. Congrats again, Bridget! And I do understand what you mean about wanting to stay relevant in the PF blogosphere. I was really worried about how my readership would change, after I paid off my debt… but everyone still comes by to see what’s up and now I think I’m able to show off why it’s really important to pay off debt altogether: it comes with a little bit of freedom. So, welcome to the club. :)

    • FREEDOM 27!!! Well not quite but at least I can move on with my adult life now. All that’s left from undergrad is the framed degree on my wall!

  5. gillian says:

    Yay!! Congrats Bridget! Don’t worry, we still love you. And don’t worry, it will take me YEARS to pay mine off so a part of MAG can still be indebted for awhile. :P

    And hey, frugality never dies, even after debt is paid off. Lots of ways for you to write about being frugal (90% of the time hehe)

  6. Congrats!! Enjoy your new freedom :), there will still be loads to talk about with your pf peers. I find stories like yours encouraging.

  7. Bridget, I’m thrilled for you! Well done. I’ll say it again to reiterate the twitter gif: LIKE A BOSS.

  8. Congrats Bridget!!! I’ve been waiting for this day for ages. I knew you’d get tired of the debt eventually and just pay it off ;)

  9. Debt RoundUp says:

    It is great that you are out of the debt. That is quite the accomplishment. I remember when I made my last debt payment and it make me happy, but my account balances made me sad. It will grow!

    • Exactly where I’m at. Need to replace the emergency fund especially — will take 2-3 paycheques. I think once that’s up, I’ll feel better. Then slowly replacing savings and finally buying a couch!

  10. Congrats! Doesn’t it feel good to be debt-free? Who cares about being broke, so is everyone else haha

    • ROFL. right?? Me & my Marc Jacobs bag, eating pasta whilst sitting on my livingroom floor on a Friday night.

      Oh, my life.

      • C The Writer says:

        I don’t suppose you’d be willing to let any of your readers borrow said Marc Jacobs bag, would you? *hint hint* lol.

  11. Congratulations Bridget!!!! If making windfall style payments on debt is wrong, I don’t wanna be right ;) $21,000+ in 2 years is pretty damn awesome. I’m excited to hear about your new apartment, we should do coffee sometime.

  12. Thumbs Up to you!

  13. Good for you! That’s great news.

  14. theoutliermodel says:

    Congratulations! I am still $20k away on my student loans haha, so right where you were when you started.

  15. Haha, just get a mortgage and you’ll be in debt like the rest of us again. =).

  16. Congratulations!! :) Sometimes we have those money insanity moments (like, for example, cashing a GIC or taking money out of the Emergency Fund) but isn’t it great when turn out ok? :p

  17. Congrats!

    I felt exactly how you felt in the last bit of the “race” to pay off the debt, make it go away as soon as possibe. In 2013 I’ve wiped out my savings twice to pay off debt. Now that its gone, I know it was the right decision. Not having debt is AWESOME! :D

  18. C The Writer says:

    You’re amazing! Congratulations! It must feel so good.

  19. Congratulations on both accounts – getting rid of your student loans and finding a great apartment! Lots of things to be excited about! I’m sure you won’t lose any readers; I love seeing pf bloggers work their way out of debt and start fresh, it’s always a happy occasion.

  20. Congratulations, that’s the way to do it! Now you can build your savings back up as high as it can go.. Ya!!

  21. Congrats!!!! Just because you have paid off your student loans doesn’t mean there are a lot more goals that you can work towards and share your progress with us!

  22. I stopped by to say “CONGRATS”! Cheers on that, lady! I really like reading news like that, it is really motivating and inspiring!

  23. Long time reader, but I basically never comment. This inspired me though – CONGRATULATIONS! Very deserved. Now go get yourself some awesome furniture.

  24. Congrats!! You did awesome. It was a long journey and it’s been fun sharing “battle scars” with each other throughout the process. I’ve got about $1,600 to go in the next week or two and I look forward to being debt-free with a clean slate/broke :). You did great still traveling, enjoying life and getting into investing. Go celebrate!!

  25. Congrats Bridget! I don’t think you have to worry about staying relevant with no debt. Personal finance is about money, and money is used all the time in our lives. We have no debt right now, other than credit cards paid off monthly. But we’re planning to buy our first house soon, which means we’ll be in debt again!

  26. WOOHOO!!! Congrats B!! I’ve been trying to convince myself to transfer money from my savings and pay off my car loan for ages, but I just can’t bring myself to do it!

  27. Congrats! I’m about $4,700 away from being where you are, and I’ll definitely be beyond broke when I finally get my debt paid off. I’ve deferred saving, paying myself back on some purchases, and replenishing my emergency fund in favor of getting this damn debt gone once and for all.

    Also, don’t worry, you’ll still be relevant to your 20 something peers, you still have to deal with insane home prices, high cost of living, and balancing shopping and saving – we can all relate to that!

  28. Renee s says:

    I will not be deleting this blog from my RSS feed because you are out of debt, haha. I will still read you and honestly, I look forward to what you will learn next! Congratulations on completing this goal :) It feels good, right? Bring on the investments :)

  29. I know this blog post is a few months old now, but I was just wondering where you got the money to pay for your braces? I’m considering using student loans, but would really rather not!

    • Sadly, I did fund them with debt. I used $6,000 from a student line of credit during my undergrad to pay for them =\ I paid it off before I graduated though!

Trackbacks

  1. […] that she was officially debt-free and an avalanche of joy spread through the Twitter-sphere. Then Bridget got inspired and cashed in some of her emergency fund to also emerge debt-free and victorious! […]

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