Dear Debt, You Don’t Own Me Anymore – I’m Debt Free

I’ve been waiting to write this post since I started this blog. It felt like the day would never come, although I dreamed about it constantly. Every time I wanted to give up or every time I did yet another side hustle and stayed up too late, worked too hard, I remembered what I was working for: debt freedom.

After paying my student loans for nine years — seriously for the past four and a half — I am debt free! I am still letting my new reality set in, but almost immediately after I saw the balance at zero, I felt a huge weight off my shoulders. I cried, screamed and danced. And I plan to have a debt free party at some point soon to properly celebrate.

The journey has been long and intense. As long-time readers have known, I started this blog in January 2013, to keep myself accountable in the debt payoff process. At that time, I was in one of the lowest periods of my life. I had (with much resentment) moved to Portland, Oregon after being unable to find a job after graduating from NYU. While I was happy to be reunited with my partner, I found myself struggling even more. The interviews were scant and all I was able to secure was temporary work. Because of the lack of money coming in, I also found myself on food stamps.

After working so hard in graduate school — and getting into so much debt for it — my reality felt like a slap in the face. It was humbling and hard. I conflated my self-worth with my net worth and thought that because I couldn’t find work and I was in so much debt, that I was worthless. All of these feelings led to a deep depression and constant lingering anxiety. I tried therapy (again), but it didn’t help. It was one of those things where I knew I had to make drastic changes in my personal and professional life, but I didn’t know where to start.

After crying every day, hitting my head against the wall, wondering, “What’s next?”, I finally decided I was sick and tired of feeling sorry for myself. So, I decided to start this blog to keep myself accountable. I wanted to turn my negative energy into something positive — an outlet for my time to do something that could keep my mind off of not really having a career or any viable options to pay off my loans.

In my very first post, I set a goal of being debt free within four years. At the time, it seemed like a brazen and bold goal, as I had $57k left. I was making $12 per hour and my contract was ending in a few months. How in the heck would I be debt free in four years? But something powerful happened when I set that intention. I set a goal — a BIG one — and even though I had no idea how I would actually reach that goal and even though it seemed so out of reach at the time, I made it happen. A year early.

Throughout the years this blog has launched my freelance writing career as well as my event planning business. Because of it, I quit the job that I eventually found, and more than doubled my income, which helped me pay off my debt even faster.

Now, you’re probably wondering. How did she do it? How did I announce that I had $11k in debt just last week and now I am debt free?

Well, there are a variety of factors that led me here. As a personal finance writer, I am not proposing or recommending that anyone in debt do what I did — I just want to be transparent about how it happened.

Emergency Fund

I decided to dip into my emergency fund and take out $1500. I now have $1500 remaining. I plan on replenishing this once my payments hit in January and I would like to build it to $5,000 to $10,000.

Income

For the past month, I’ve worked my tail off. I added a few new well-paying clients and worked nearly every day in November and will probably do the same in December. From all my work, I received a good chunk of change in the first week of December. I decided to NOT save for taxes this month and put all my income to debt. Once again, as soon as January hits, I am replenishing my tax fund. I didn’t take anything out of it, I just didn’t add to it. I still have a few more payments coming in this month and plan to use those to live off of and also add to my tax fund.

Windfall

Whenever people write about windfalls, I always think, “Who are these people getting windfalls?” I have never once thought or expected that I’d have a windfall of money. But earlier this year my mom received a sizable bonus at work — and decided to share a portion with me.

I argued with her and told her no, absolutely not. She is the sole breadwinner in my family and works her butt off and she deserves every cent of it. But she was insistent. She wanted to share a portion of it, so that I could relax and stop working seven days a week. I reluctantly said yes and am forever grateful for her generosity.

For the past few months, the money has sat in a separate account and I’ve pretended it wasn’t there. I knew deep down that I’d use it to get rid of the last of my debt. So I took the $4,000 and moved it to my account, and with my extra emergency fund money, and not saving for taxes I made my very last payment.

I know I technically “owe” myself money next month, but I know the money is coming in and know every cent I earn will be mine (or Uncle Sam’s). I’ll replenish my tax fund and emergency fund in the first week of January. And then I can start actually saving and investing for the long-term. If I’m as successful as I was with my debt, I’m thinking I can actually catch up for all this lost time.

I also have a lot of big expenses coming up — a lot of transitions. I plan on sharing all of these things in a future post, but suffice it to say, 2016 will not be a cheap year. I am so grateful I am making more money now and my debt is paid off. It will afford me so many opportunities and I can actually start building wealth, rather than paying for my past.

For all my readers still in debt, I want you to know being debt free IS possible. I feel like so many of us think it’s out of reach, because we either feel like we’ll never get out of debt, or if we try it will take forever. We’re daunted by the “forever” and “never”, but being debt free is possible. Even if it’s five or ten years later, you can do this.

After all is said and done, I’ve probably paid close to $100,000 toward my student loan debt. I borrowed $81,000 and paid a lot in interest over the years. Sometimes I get sad, thinking how awesome it would be to have $100,000 in the bank, instead of having a net worth of basically zero. But I’m proud of what I’ve done. I’ve worked many long nights and shed a lot of tears to get here and it feels so damn good.

I appreciate every single reader and thank you for all your support and encouragement. I can confidently say I would not be here without you. You’ve given me a chance, a push, an opportunity at another career. I want to continue to inspire others who are in debt showing them that being debt free IS possible and you don’t have to be rich to do it. You just have to be willing to work at it, like anything else worthwhile in life.

Thank you again — from the bottom of my heart.

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Melanie

Melanie Lockert is the founder of the blog and author of the book, Dear Debt. Through her blog, she chronicled her journey out of $81,000 in student loan debt. She is also the co-founder of the Lola Retreat, which helps bold women face their fears, own their dreams and figure out a plan to be in control of their finances. She is passionate about empowering women, helping others get out of debt, and focuses on the intersection of debt and mental health. Every September she organizes a Suicide Prevention Awareness Blog Tour, to help share resources for those struggling with debt and suicide. In addition to her love of personal finance, art and music, she is also a karaoke master and a cat mom to Miles and Thelonious.

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