Indebted to My Former Debts

June 2010 I graduated from University of Denver with my MBA and undergrad both completed with a student loan bill topping $41,000. Ouch. I made a few bigger payments towards my debt as I interviewed and started my first big boy job. Then in August 2011 I was reading Rory Vaden’s blog and got introduced to Dave Ramsey. I read Dave’s book The Total Money Makeover and learned about his philosophies like dumping debt, living on a budget, and not trying to keep up with the Jones’.  And when I say I read his book, I mean I drank the Dave Ramsey kool-aid.

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I tackled over $32,000 worth of loans in 11 months and finally became debt free in August 2012! And today I stand grateful and changed because of the lessons learned during my debt snowball. As a single 20-something with a good job and no one to take care of but myself, I easily could have made minimum payments or not worried about a meager 3% interest rate. Instead I immediately laid out all my loans, made a strict monthly budget and created a game plan. Anything beyond my normal rent, food, gas, entertainment would go directly to my debts. I trimmed frivolous expenses like going out too much, vacations with friends and avoided a car payment or any other financing. I packed my lunch every day with two PB&Js(extra crunchy, duh!), an apple, and a protein bar. I learned how to say ‘No’ to things like dinner and drinks every weekend night or a nice car or new clothes. Working in sales, I put in extra calls, went in on Sunday nights and got better at my job each week. (Or what my friend Shane Weathers might call ‘Hustlenomics’). Every month that I made progress and my snowball rolled, my intensity increased by focusing on the ‘controllables’ – my attitude, my income, and my expenses. When the last payment posted and Sallie Mae showed zeroes across the board, I felt like this:

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Years ago I learned that ‘successful people form the habit of doing things that unsuccessful people don’t like to do.’ For some reason I never looked through this lense much with my personal finances. By the end of the 11 months, however, certain habits I learned at 25 will be ingrained for the rest of my life. I formed the habit of having a monthly budget where every dollar is assigned on paper, on purpose. I formed the habit of looking for ways to reduce expenses. I formed the habit of becoming a student of personal finance as it relates to insurance, home buying, investing and entertainment. I formed the habit of contentment and not keeping up with the Jones’. I formed the habit of connecting the things I want in life for myself and others with a financial road map. I formed the habit of paying cash or simply saying no. As Dave Ramsey would say, ‘building wealth is 80% behavior and 20% head knowledge.’

I’ll never forget the summer evening I sat out on the gorgeous patio at Lindey’s to toast champagne and celebrate. I remain grateful for the experience and I am indebted to my former debts. I know those lessons will allow me to have a sense of financial peace in the future when the day comes I get married or start a family or retire. Thank you, Rory. Thank you, Dave.

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I could have written 20 pages about this topic, but I’ll spare you and I appreciate you reading. I hope you’ve learned something! I’d love to hear your thoughts or comments about your own experience with student loans or personal finance as a young professional. Tune in next week when I do my own version of ‘Things Oprah Likes.’ 

6 thoughts on “Indebted to My Former Debts

  1. Allison

    This is a great post, Patrick! As I am approaching the end of pharmacy school and the beginning of student loan payments, I also have been looking to advice and opinions on how to best tackle educational debt–especially in a tough economy. Dave Ramsey has been a great source for me as well. You should be very proud for taking responsibility for your student loans from the beginning, and I’m sure you can now appreciate that accomplished feeling of being “debt-free.” This is a great post to share with other recent grads or anyone with student loan debt. I really appreciate your insight! Looking forward to the (hopefully very soon!) day when I can enjoy that same sense of freedom!

    Reply
    1. admin Post author

      Thanks Allison! There’s plenty of ways to go about it and a number of folks that will tell you to pay minimum payments because the rates are low or to invest in a home right away. I can’t tell you how good it feels to have that weight lifted, and after 11 months of being frugal and allocating thousands towards my loans, I can now redirect those cash flows to a healthy emergency fund, a down payment on a house or investments. Live like a poor college kid for another 6-12 months after pharmacy graduation and knock em out!

      Reply
  2. Tyler

    Always great to read about success stories of people becoming debt free. I’m on the same Dave Ramsey debt snowball plan. I plan to finish the credit card debt this month and move onto student loans next month! You are right, the habits you learn now paying off debt will make you so much more successful in life.

    Reply
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  4. Angela

    Thanks for inspiring me to pay off my school loans as quick as possible after last summer and for being so excited for and with me when I also became debt-free!!

    Reply

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