I had no debt before I went to law school. However, until very recently, I didn’t really have any concept of money (e.g. the effect of compound interest, investing, saving, and the impact of a professional bank loan that had an interest rate of 8.99%).
When I finished law school, I had $68,500 of student loan debt. Not bad, I thought, compared to some colleagues who had racked up over $100,000 – but at least their debt included a trip through Europe.
Shortly before I became a full-fledged lawyer, I “needed” to buy a new vehicle because the one I had stopped working – literally. I was driving home from work on a cold day, when I heard some racket coming from the engine and decided to pull over in a grocery store parking lot. The car never turned back on after that. I should add here that I did later sell that car for $300 on Kijiji.
Naturally, I went car shopping. The Honda that I saw was only $4,000 less than the used luxury vehicle, so it was a “no brainer” (sarcasm) that I buy it – wait, no, pay the bank to buy a vehicle I could not afford. I bought the luxury vehicle, and the expensive oil changes and parts that came with it. This was a big deal to me. I had never bought or had such a vehicle growing up and had always wanted one. For whatever reason (maybe society’s expectations), it was a way of showing to my friends, family, ex-boyfriends and the world that I had “made it” (note that I no longer hold this view).
I loved that vehicle though. I don’t regret buying it for the experiences I had, but I do regret buying it for all the dollar bills I literally threw out the window every time I drove it. What hurt the most was selling it a couple years later for less than half of what I had bought it for – ouch!
Those were the 2 big loans that I had, and I was determined to pay them off as fast as I could.
Here is what I did to pay off those loans (Part 1 of 2):
1. Lived below my means. I lived in a bachelor apartment.
Throughout law school, I lived with a roommate in a 2 bedroom apartment and paid $600.00/month in rent.Although my roommate experiences were not horrible, I wanted to live alone when I started my career. I did a lot of research and came across a bachelor suite that I could live in for $725/month. It wasn’t anything fancy but it came with a gym (bonus!), and it allowed me to pay more towards my debt than my housing.
2. Watched a debt show once a week.
My go to show was Princess or Til Debt Do Us Part with Gail Vaz-Oxlad as the host. One of my weekly to-do’s was to watch one episode a week. Watching an episode every week kept my mind focused on paying off my debt and gave me some actionable tips that I could implement into my debt repayment journey. I vividly remember on one of the Princess episodes, a princess had to carry kettle bells around the mall weighing the amount of debt that she had, which was about $60,000. I visualized this in my head when I wanted to buy a “want” or spend money.
3. Went on a no clothes buying challenge.
I did not buy myself any new clothes for a full year. However, in order to get at least a couple of new pieces of clothing, I got creative and did #6 below.
Actionable Tip: For your staple pieces (i.e jackets, blazers, sweaters), take good care of them and repair when necessary. E.g. sewing buttons back on or repairing small holes yourself.
4. Do you have any gold or silver (maybe a ring or necklace from an ex)? I sold mine for cash.
A gold and silver buying company comes through town about twice a year. I got the flyers in the mail a couple times, and eventually decided to go and check it out with my jewelry in hand. I ended up selling some gold and silver that I had sitting collecting dust in a jewelry box. I made $600 cash and threw it at my debt. I considered it cashing in on my exs.
5. Created monthly budgets for my debt repayment period.
I created a monthly budget in Excel for the entire debt repayment period. This way, I had planned out all of my fixed and variable expenses for every month and debt repayment amounts for each month, so I knew how much longer I would have the debt for and when I was planning to pay it off. I think that having a plan for your money (a budget), even though you will likely have to revise your budgets monthly, is key to success – because a plan is better than no plan.I used, and still use, Gail Vaz-Oxlad’s Excel budget spreadsheets. Check them out here. At the bottom of the site, you can download the Excel spreadsheet.
6. Used Christmas (or other holiday) and birthday to get things I needed or very important wants.
When people asked me what I wanted for a birthday gift or Christmas gift, I would ask for gift cards to the places I frequented often or items I that used all the time (also known as very important wants).
- Gift cards: to the Bay, a gas station, a grocery store, Cineplex Movie Theatre, Sephora (Sephora wasn’t open when I started by repayment journey, but it’s on my go-to list now).
- Kiehl’s facial and body products – I don’t believe in cheaping out on facial products or make up.
- Clothes: socks (everyone needs socks), pajamas, slippers, clothes for work (For close family, I would send them a picture or the link to exactly what I wanted, so I would get exactly that. This way, I was happy and their money was not wasted on something I didn’t want).
Actionable Tip: Can you re-gift any of the gifts you received? I did. One time I got a gift card to the Bay for my birthday, but instead of spending it on myself (which I would have loved to do), I used it to buy my dad 2 t-shirts for Christmas.
7. Cancelled my gym membership and found a way to exercise for free or for much less than a gym membership.
I cancelled my gym membership not only because of the cost but because I wasn’t using it as much as I should have been.I decided that I would challenge myself to get outside more in the spring and summer months, whether that was biking, walking or running, and buying Groupons or passes for rock climbing, yoga classes and drop-in dance classes, etc.
Actionable Tip: For the winter months, I searched YouTube extensively to find the best workout videos. It took a lot of trial and error, and I felt I had wasted workouts sometimes, but here are my favourite fitness experts that are guaranteed to make you sore the next day:
If you love working out at your gym and it has everything you want and need, don’t cancel your gym membership. Instead, find a way to cut out something else from your budget to pay for the gym membership.
8. Bought my haircuts off Groupon.
This way, I was paying about half price for the haircut, got salon hairdressers and service (not always, but most times) and got to search for my “forever” salon, the one that would have my repeat business.
9. Sold clothing items at a consignment store. Sold clothing and other items on Kijiji for cash.
When I was younger, I went through a phase where I believed that the higher the cost of the clothing item, the better the quality. As I got older, this meant that I had a collection of gently used, name brand clothing that I was no longer wearing. I also had a couple of Lululemon items that were just not me anymore.I took a box full of clothing and accessories (jewelry and purses) and was paid $150 in cash for the box.I also sold items separately on Kijiji that I knew I could sell for more money than the consignment store. From my experience, Lululemon and Michael Kors items have great resale value.
10. Stopped getting my nails done, unless it was a special occasion and even then I thought hard.
I thought that because I was a lawyer and I worked with my hands every day, that it was part of the job to have my nails done at a salon. I thought that having my hands look professional would show to the world that I was well “put together”. I would agree that having your nails done gives you slightly more confidence, but I don’t think it’s worth the cost. At the cheapest end, it was costing me $45 every 3 weeks to get my nails done and 1 hour+ of my time. So, I stopped getting my nails done and started painting them myself. I found a nail polish line that would last the week, or almost the full week, without getting damaged or peeling off. I recommend the brand Orly.
Final Recap/Actionable Tips for you to take in your debt repayment journey:
- Live below your means.
- Watch a debt show once a week.
- Go on a no clothes buying challenge.
- Do you have any gold or silver (maybe a ring or necklace from an ex)? Sell it for cash.
- Create monthly budgets for your debt repayment period.
- Use Christmas (or other holiday) and your birthday to get things you need or very important wants.
- Cancel your gym membership and find a way to get exercise for free or for much less than a gym membership.
- Buy your haircuts off Groupon.
- Sell clothing items at a consignment store. Sell clothing and other items on Kijiji for cash.
- Stop getting your nails done, unless it’s a special occasion and even then think hard.
If you want to read more actionable debt repayment tips check out Part 2 of this post on How I paid off $98,500 in 3.5 years (Part 2 of 2).