An Interview on How To Become Debt Free

By Zack | Crush Debt

Jul 27
How To Become Debt Free

An Interview on How To Become Debt Free

“What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?”
-Adam Smith
Read Time: 4 mins

This is the second post in our new series about how to be debt free. We’re seeking out the best stories and asking questions that will be insightful and inspiring to you if you’re on your journey to be debt free.

This week we are talking with the head blogger over at Debt Free Geek today about their journey to become debt free and chase some big financial goals.

You’re going to love this interview. There is a ton of wisdom packed in this post. Thanks, Debt Free Geek for dropping some useful tips in this interview! Go check out his blog sometime, they have some great articles.

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When did you focus on becoming debt free?

I didn’t start out with a lot of debt, maybe $25,000, and I didn’t have the pedal to the metal originally either. It was sometime during mid-2011 that I started to hardcore pay off the $18,000 loan on my Audi.

At the time, I didn’t own a home, and I might have had about $5,000 in student loans. Like most people, I acquired more debt as time went on, and I was just casually reading about personal finance, so I knew I needed to get my car loan paid down.

Bonus Cheat Sheet: click here to download a free cheat sheet of our top 10 tips to become debt free

May of 2011, I bought a house and took a mortgage for about $104,000, but I had learned enough by that time to have the wisdom to put it on a 15-year note.

June of 2012, I got married and assumed my wife’s student loans of about $10-12,000.

November of 2013, our first daughter was born, and I got some serious pressure to get a safer car, so I went out and financed a Honda Accord for $15,000.

This was the last loan we took.

What motivated you to become debt free?

My decision was a result of the realization that very little of my possessions were actually mine. My house, cars, and even the cash in my bank accounts didn’t belong to me. It was all spoken for by the bank.

The second motivator was that I didn’t like the control that my 9-5 job and my boss (by extension) seemed to have over me.

I wanted to remove that factor from my employment equation so that I could have more freedom and control in my career.

And now I do. When I have to have an awkward conversation with my boss or a peer, or if my company struggles, or if my colleagues are gossiping about the news that someone will be let go, I am not worried.

My job decisions are based purely on my job, and I believe I’ve been even more confident and successful because of it.

I think a lot of people are afraid to step up and make hard or unpopular decisions because they fear for their job. I don’t have that distraction anymore because I’m debt free now.

What did you have to cut out to become debt free?

The biggest thing was not going out to the bar, and out to eat as much as I used to. This is such a popular way for people to spend time together, and so I missed out on some “good times” because of it.

The best way I’ve found to solve it is to preempt and invite my friends over for dinner, drinks, and games.

Way cheaper, better quality time, and we still keep a social life.

Related: Have you considered refinancing your student loans?

What’s been the most rewarding part of being debt free?

By far, it’s that our frugal lifestyle and our debt-free cash flow gives us the ability to take risks and build wealth more freely.

Not only do we have significantly more cash than most people with similar incomes, but we also have a debt-free/worry-free position which lets us feel comfortable taking more investment risk, and it has paid off with real returns.

For my wife, it’s that the daily money stresses, worrying about bills, how much cash we have left until payday… none of that exists for us.

So we can spend all of that extra energy focused on enjoying life by planning our next camping trip or weekend in a cool city.

What’s your advice to others who want to become debt free?

In short, my best advice is always:

Increase income, Track and Decrease expenses, Automate, and Conquer cars.

But here are some super practical tips you can do this year to do what I’ve done:

  • Ask your boss for a raise (and justify it) during your next 1:1 or performance review. If your boss says no, find out what they’d like you to do to earn an X% increase, then do it!
  • Create a budget with three line items: Savings, Bills, Spending.
  • Use automatic transfers to split the above items into separate accounts. Don’t touch Savings unless you lose your job, or have a vehicle or housing emergency.
  • Downsize your cars. If you have a luxury car, get rid of it ASAP. Never buy a new car again.

How has becoming debt free changed your view on money?

I think the last few years of life have helped me hone in on the importance of cash.

I’ve heard it said plenty of times, but I believe it now more than ever: Cash and cash flow are kings. Any financial goal you can set will be directly impacted by these two things.

Do you want to invest into a stellar mutual fund? The more cash you can put in, the more money you’ll make in return.

Want to go on a more expensive vacation in a few short months? The higher your positive cash flow, the quicker you will be ready for that spontaneous trip.

Related: Figure out if you can pay less on your student loans with LendEdu

What is your idea of an abundant life? How would you define freedom?

Freedom is financial independence (FI). FI is when my expenses covered whether I get out of bed or not, and I work because and if I choose to (I would work).

An abundant life is financial independence as well as a happy and healthy life where experiences trump possessions and family comes first.

Was your education worth it?

I can’t say that my MBA would have been a requirement to get my director-level job. There are plenty of directors who don’t have one. My boss doesn’t have one. But then again, I didn’t pay for my MBA. I had my company agree to pay for it. If it were me paying, I wouldn’t have done it.

My bachelor’s degree was completely useless. I think I cash-flowed most of it. I wish I could take it back.

My associate’s degree was my absolute best degree and contributes, to this day, to my success and knowledge in my field.

All that to say, I believe getting a trade-specific degree is typically the best use of money on college education. I think students should try to live at home or have multiple roommates off campus.

And I think doing your first two years at a technical college, then transferring to a bigger, in-state university is super smart if you are dead-set on getting a bachelor’s.

What are your biggest financial goals?

I enjoy finding new ways to build wealth and passive income. My wife enjoys the travel, healthy living, and low stress.

Our current goal is to build $45K in annual passive income so that I can quit my job and have a more flexible schedule for travel and being with our growing family more.

About Debt Free Geek

How To Become Debt Free

How To Become Debt Free with Debt Free Geek

I’m 31 years old. My wife and I live in South Carolina with our two daughters who are 1 and 3. I went to school for IT Network/Systems management, and I’ve worked for ten years in the IT field. A year ago, I took a new job as the Director of Cybersecurity Operations for my company. I’m 100% debt free, and it’s been that way since the summer of 2014. I started http://debtfreegeek.org to share my story and help people get motivated and organized to pay off their debt and re-program life.

Are you working on getting out of debt? Or just getting started? Share your story in the comments!

P.S. If you want some more good advice, I really like this video by Dale Partridge 

 

P.S.S. Don’t forget to grab our cheat sheet of the top 10 tips to become debt free!

Bonus Cheat Sheet: click here to download a free cheat sheet of our top 10 tips to become debt free

 

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About the Author

Zack and his wife started FreeUp to help share their passion for personal finance with others. He is the primary writer for FreeUp, where he discusses all things personal finance, entrepreneurship, and life. Click the icon to the left to follow him on Twitter and Facebook.

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