Ah fresh starts! We all need a chance to try again and press the refresh button. Can change happen in your financial life? What’s possible in year? Apparently, a lot. You can pay off debt this year.
Meet Kim. She completed her Master’s in Architecture and is now a project Architect. Like 44 million other Americans, she financed her education through student loans and found herself not making progress towards paying off debt.
Last year she turned things around and paid off $17,763 in debt.
One of her student loans was scheduled to be paid in full in 2030, but Kim decided paying off student loans by 2030 just wasn’t going to cut it. Her debt felt like a weight and it flat out bothered her that a large chunk of her income was going towards debt, versus towards herself.
Being young she has a lot to look forward to in the future, like possibly marriage, house, and kids down the road. Realizing all these milestones are expensive, she wanted to be payment-free long before then.
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Here’s how to pay off debt this year.
After reading books here and there on personal finance, she was looking for more of a roadmap and plan to tackle debt, “I never was a big spender, but I was never focused,” said Kim.
She enrolled in Best Money Class Ever, a four-week personal finance class that’s like CrossFit, but with money. “Going through the class really helped me understand where my money was going and what potential I had.”
From the class Kim learned how to become Chief Financial Officer and manage her money like a business. The class has a debt calculator that mapped out a plan to become debt-free within 36 months. The catch: she had to pay an extra $600 per month towards her debt each month.
Before taking the class, she never imagined being able to pay more each month towards debt, but after looking at where her money was going, she found that spending on the little things like haircuts, makeup products, nails, or clothes where adding up. By limiting what she was spending on flex (or variable) expenses each week, she worked her way up to paying $1600 extra towards debt monthly.
For next year, her current goal is to pay $1,000 extra towards debt every pay period ($2,000 / month) and she’s on track to be 100% debt free in 14 months.
“It’s empowering, it really is empowering. I feel like I am just killing it! It is motivating, it’s exciting for me. I can’t wait until the next paycheck,” said Kim.
Here’s an update, Kim is 100% debt free. Here’s how she paid of $45,404 in 28 months.
The verdict is in, it’s possible to make big grounds in a year. You can pay off debt this year too!