debt rebellion part 3: rachel’s story.
June 2016, Erdenet, Mongolia
Initial Debt: $42,000
Time Frame: January 2012-June 2014
A lot of young people struggle with finding purpose in what they do. I have several friends who worked a few different jobs within their first year or two out of college trying to find the right fit. And one of the best things about paying off my debt right out of college is that it fulfilled the “purpose” problem. I can’t say I would’ve been content with any job, but whenever that fear of “what am I doing with my life?” crept up on me, I was able to say: I’m getting out of debt.
This was a freedom that allowed me to do things out of my comfort zone – because I knew this season wouldn’t last forever. And that’s my first piece of advice to anyone who wants to be debt-free: this is just a season. I gave up a lot (and took on a lot too) but I always knew that I was working my way out of this lifestyle. It gave me the freedom to say no a lot more than I wanted to and to take jobs that I didn’t necessarily want. I knew someday I’d be able to say “yes” and I’d have a lot more freedom to work my dream job (which I’ve realized isn’t in as narrow of a category as I once thought).
My first big change was location. I packed up my metropolitan life in Minneapolis and moved into my cousin’s basement apartment in Williston, North Dakota (thanks a million Paula!). In January of 2012 Williston might have been one of the most unattractive places for a young woman to move to, but I had an opportunity and I took it. Williston at the time was flooded with oil workers coming to get their piece of the modern day gold rush – and almost all of those “immigrants” were men. Some estimate the ratio of men to women was as high as 75 to 1. (I think 15 to 1 is more accurate, and still astounding). Think semis, dust clouds, long lines at Walmart, and long and laborious work shifts – the money was plentiful but it wasn’t cheap.
I had a college degree but ended up choosing a career in the restaurant industry. The reason I went this route is that the pay was essentially unlimited and I could work as much as my legs could handle. I’ve never really been a 9-5 desk job kind of person and this lifestyle fit me well.
When I first started at the fine dining restaurant I had a steep learning curve. I knew nothing about fine food, wine, or liquor, yet I was servicing $500 dollar tabs on a regular basis. I was making crazy tips but I wanted to be worth it. I would come in an hour before work and talk to the bartender as she was setting up, I would look over every bottle of wine and alcohol we had, and tried to memorize everything on our menu. (You can’t imagine how many words I googled during that season). Initially I was working 6 nights a week (we were closed on Sundays), but I realized having no social life whatsoever wasn’t conducive to a healthy lifestyle. I settled for 5 nights a week and eventually got a second job working as a substitute teacher in the school district.
I want to acknowledge that my level of income during that season is not something that anyone can just step into – it was an oil boom and money was plentiful for all in that place and time. However, what I think is more important to note is that your level of income is not your primary indicator of debt-paying ability. I started off the journey on the wrong foot. I had hundred dollar bills stacked in my dresser and started making expensive purchases that put me in the same camp as anyone else. For the first 2 months I was working my tail off and making zero headway on my debt.
To pay off debt you must find a combination of increasing your income and decreasing your expenditures.
Month 3 I started to make some significant changes and that’s when the magic started to happen. I gave up traveling home every 3 weeks to see my friends and family. Even though I was making a lot of money, every trip home would cost me at least $200-$300 in expenses and another $300+ in missed work shifts. That was $600/month that could be going to debt. My phone bill was an outrageous expense so I turned in my iPhone 5 for a flip phone. I would eat leftover food from my restaurant instead of stopping to get food on my way home from work (because who wants to cook at 1:30am?). Maybe it was only $7-$10/day I was saving, but over time that really adds up – to the tune of $300 a month!
For anyone getting started on paying off debt I would recommend increasing your income by at least $100/month and decreasing your expenses by at least $100/month. This is just a starting point but that’s already $200 you can be paying on the PRINCIPAL of your debt! Remember, anything extra you pay over the minimum is 100% interest-free – I got addicted to it! Just like Natalie it became a game to me to see how much extra I could pay each month. Sometimes it was $50, sometimes it was $500 – but it always felt good and made me want to work harder next month.
For those that say they don’t have any way of increasing their income (your boss would laugh at your request for a raise), it’s time to think outside the box! What skills do you have? How can you make money on the weekends? Can you make and sell something on Etsy? Is there stuff laying around your house you can sell? I believe anyone can make an extra $100 every month by just being creative (I actually believe anyone can make a few hundred dollars extra every month).
And for cutting expenses? I guarantee there is a lot more “fat” in your budget than you realize. Look at your bank statement! Where are you wasting money? Hint: it’s usually the small things. Daily stops at the gas station for a soda or a snack, your HBO add-on, paying for Netflix when you can share it with your friends. I avoided going out for coffee like the plague – I don’t even drink coffee yet in college I’d be going out for weekly coffee dates with people just to connect. Go for a walk instead!
I eventually got to a place where my job at the school was covering all of my bills (less than $1,800/month), so I made a commitment to putting 80% of my restaurant money towards debt (20% of it was going towards my tithe). One December I paid off $4,500 in one month (thank you oil company Christmas parties)!
I can give all sorts of little stories of things I did or didn’t do during this season, but I want to encourage you with three simple pieces of advice:
1. If you think you can do it, you can. If you think you can’t do it, you probably can’t.
Determination is 99% of this thing. If you have an attitude of “well she only did because of ___ or I don’t have the same opportunities…” you’re probably right. If I had had that attitude I would’ve never left Minnesota and probably would’ve spent the next 3 years feeling sorry for myself that my options were so slim. When you set a high goal and are determined to achieve it, you will make it happen – whatever it takes.
2. Creativity is key.
Like I said before, making extra money and cutting your expenses is essential to this thing – it’s one thing all 5 of our stories have in common. And most of us would agree that we had to think outside of the box to make this happen. For some of us that meant moving to a new city and for others it meant doing odd jobs on the weekends. I remember one month I decided to see if I could go 30 days without spending any money. After I paid my necessary bills on the first of the month I resolved to spending zero dollars for the next month. Crazy right? Here’s what that looked like: eating a lot of leftover restaurant food and my sister/dad’s garden produce and getting rides to work from my co-workers. I actually learned how to cook a spaghetti squash! Going for walks with friends instead of going out for dinner. Watching a movie I already owned instead of going to the theater. I was afraid my experiment would turn me into that horrible friend that was ruining everyone’s plans but actually it helped my whole friend group come up with creative and free ways to hang out. I guarantee, seriously guarantee, you can take up the +$100/-$100 challenge on any income or situation. You just have to be creative.
3. Remember this is just a season.
One of the toughest parts about paying off my debt was watching my friends live awesome lives while I slaved away at work. I had to turn down vacations with college friends and going out to eat at restaurants that I really liked – I even had to miss a really good friend’s wedding. If I felt like this would be the rest of my life I don’t think I could’ve done it. But I knew it was just for a time.
And now? I can do those things, and I can do them with cash. My husband and I have both been debt free for about 3 years, and we’ve kept it that way. We figured out we were (slightly unexpectedly) pregnant earlier this year and we didn’t need to freak out about how we could afford the little guy. Even though we’re missionaries with a small salary we can still get away once in awhile and go out to eat sometimes. To this day we’ve never put any expense on a credit card and we have more than enough saved for an emergency. And all we did was put our lives on hold for 2 years. And the older we get, the more we realize how tiny 2 years is in the grand scheme of our story. We have the rest of our lives ahead of us and we’re thankful to be living in the black.
Bonus tip: start planning your victory lap from day 1! Your victory lap is the adventure you get to take or thing you get to buy once you are debt free. (Note: don’t go into debt for it).
First I started by having an epic birthday party with so many friends and family that supported and encouraged me along the way – I mean, you gotta celebrate! And then I got to do two things (though I confess one was a treat from my dad). I went to the MLB All Star Game in Minneapolis in 2014 and then a 9-day camping trip through Banff National Park and Glacier National Park with 7 of my best buds from college. It was an amazing summer and I didn’t have to use a credit card to pay for any of it!
Up Next in the series: Tom and Katie!
Reading Rachel 
Way to go, Rach! I was debt free when I got out of college thanks to cheap tuition and working weekends, but it only lasted until i bought a farm a year later. There were many ups and downs (and 4 daughters who are the best investment a dad can have), but am again debt free and can retire soon! Thanks for sharing your story.
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