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Indebted to My Former Debts

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.

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:

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.

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.’ 

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About the author:

Patrick Dichter

I’ve always firmly believed we each claim our own success and education – the majority of which is determined by the people we spend the most time with and the books we read. So, I write with the intentionality to educate and entertain. I hope my experiences and reflections will serve as bite-size lessons to help you lead a more successful life – in business and in relationships.

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