1. How did you get into debt?
My first debt was a car loan that I took on when my college hand-me-down broke down after graduation. The payments were relatively small, and I was paying double payments to make sure the debt was paid off quickly. But my biggest debt came with my MBA program. With an estimated total cost of $90,000 to attend, of which tuition was nearly $70,000, I took on a total of $40,000 in student debt during my time in the program.
2. How deeply in debt were you at the worst point? What did it feel like? I worked hard to pay off my loans and pay as much as possible while in school, and kept a full time job while going to school full time. This kept me from taking on unnecessary debt. At the peak, I had just under $40,000 in debt to be paid.
3. When did you decide to get out of debt and why? I decided to get out of debt before I started. When I was accepted to my MBA program, I went in with a financial plan to continue with my job and pay for my living costs and as much tuition as I could from my income and college savings.
4. How long did it take you to get completely debt free? I paid off the last dollar of my student loans 736 days after graduation, just a few days over two years. I pre-paid as much as I could and continued to live on a college student budget until I was debt free. I did buy a home in that two years, and still have a mortgage on the property, but with my big down payment and low interest rate, my monthly cost is lower than renting.
5. What advice would you give to someone trying to become debt free?
Maintain super focus and live like a college student. Lifestyle inflation is tempting, but keeping costs low and under control will help you pay off your debt so much faster. I also suggest splitting the payments into twice a month, on each payday, rather than once a month. That will lead to a full extra payment each year in addition to whatever you are able to pre-pay.
Thanks Eric for your help!