Tips

Things to Give Up to Get Out of Debt Sooner

Melanie Lockert, an ordinary person who was in $68,000 student loan debt since May 2011, recently had an article published on Business Insider. In the article, she shares what she has been doing and continues to do to pay off her debt.

Administrator

23 December, 2023

252

The Business Insider recently published an article by Melanie Lockert, a regular person who had $68,000 in student loan debt since May 2011, sharing what she has been doing and is currently doing to pay off the debt.

Not driving a car is one of the ways to save money while paying off debt – Photo: Business Insider

Lockert said that when she just graduated, she was determined to pay off all the debt as quickly as possible. She realized that she had to do 2 things: spend less and earn more money. In addition, she also changed some lifestyles so that after 4.5 years since graduating, she deducted $54,000 from the total amount she owed.

Here is Lockert’s sharing about 5 things she gave up to save money and pay off debt early:

1. Owning a pet

I have always owned a cat from a young age. I love cats, but I was determined not to own a pet until I paid off all the debt. I understand that pets are completely worth it and can help change your life, but I think I can’t afford the cost unless the debt is paid off.

According to the non-profit organization the American Society for the Prevention of Cruelty to Animals, owning a cat costs $1,000 a year. However, the actual cost may be higher, as unexpected risks such as when your cat swallows a needle and you have to take it to a doctor. Every time you see a doctor, pet owners can spend from $2,000 to $5,000. So I don’t have a cat, and I save an extra $1,000 a year.

2. Cable TV

I haven’t watched TV since graduation and no longer live with my parents. In recent years, I don’t have a TV or cable. Buying a TV can cost you a few hundred dollars, and cable TV can range from $20 to $80 per month. I stick to books at the library and Netflix, which only costs $10/month. So I save $240 – $960 a year.

3. Car

When I moved from Los Angeles to New York, I stopped driving a car. I think the car is a “money sink” for gasoline, insurance, parking tickets, parking fees, and repairs. Only the above things alone cost about $6,000 per year. Without a car, I also don’t have to spend more money on a gym membership card because I walk or ride a bike everywhere.

4. Dream City

In 2011, I couldn’t find a full-time job after graduation and had to make a choice: either stay in New York, unable to pay off student loans and gradually spend the savings until I have a job; or move to a cheaper city. I chose the second option and moved to Portland, Oregon. There, my rent is 50% lower than in New York.

Initially, finding a job seemed more difficult. Saving on rent is good, but not great if you can’t find a job. However, things gradually improved, I found a job and took advantage of the affordable cost of living. It was difficult for me to leave New York, but financially, this decision was absolutely right. I saved over $7,000 a year.

What to do to pay off debt?

I know that what I gave up might be too much for some people, but I chose to cut out what doesn’t serve me 100% so that I can still do what I love, like traveling or eating out. The key to the problem is financial balance. Maybe for others, they prefer watching TV to dining out at a restaurant. You can completely choose what you need to cut back or keep which amount to pay off the debt.

Kara Perez, the author of the book From saving to getting out of debt, who paid off $12,800 debt in 5 months by significantly reducing expenses, shares: “When I was serious about paying off debt, I realized that I had to give up some things.” Perez temporarily stopped using credit cards and even ate less meat. Through cutting expenses, she quickly paid off the debt before the deadline.