3686: 3 Seriously Simple Tactics We Used to Pay Off Our Loans Early by Jessica Thiefels with Money Mini Blog on Paying Down Debt

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[00:00:54] This is Optimal Finance Daily. Three seriously simple tactics we used to pay off our loans early by Jessica Thiefels with MoneyMiniblog.com. And I'm Justin Malek. I read articles to you every day of the year, this one covering debt. So with that, let's get right to it as we optimize your life.

[00:01:21] Three seriously simple tactics we used to pay off our loans early by Jessica Thiefels with MoneyMiniblog.com. Debt is nearly inevitable in today's world. NerdWallet's 2017 report found that the average U.S. household owes $131,431 in total debt.

[00:01:44] And total U.S. consumer debt reaches nearly $13 trillion. For many, that debt is a combination of credit cards, mortgages, auto loans, and student loans. If you're in the trenches making steep payments month after month and keep thinking, there has to be a better way to move this process along, I can relate. In fact, this mindset spurred my husband and I to get serious about paying off our debt.

[00:02:13] I'm here to share the ways we did that. If slogging through minimum payments for the next decade doesn't sound appealing, here are the action steps that changed our finances and life for the better. Number one, we updated our budget weekly. This will take motivation and effort on the front end, but it becomes easier to manage over time.

[00:02:36] When we decided to aggressively pay off our loans, the first area we knew we needed to focus on was our budget. Our organized minds immediately turned to using a spreadsheet to track all monthly expenses. Here, we listed all monthly expenses and included our total monthly income. Using a simple Google Sheets equation, we're able to see the total money left over, which then gets divvied up into spending and savings.

[00:03:04] Each expense was added to the budget, allowing us to get a real-time picture of what the budget looked like. If we were in week two of the month with only $200 left to spend until the 30th, we had to really think about how we wanted to use that money. While this method doesn't guarantee that you won't go over budget or pay off your loans right away, it's a great accountability tool.

[00:03:31] If you're not good with spreadsheets or you want to make tracking easier, there are lots of great budgeting apps out there with a wide variety of options for every kind of budgeter, and most are free. Win-win. Number two, we stopped going out to eat. Trust me, I know the struggle. Going out to eat is a normal part of our lives. It's not even about the food, but the fun of it. My husband and I love trying new restaurants,

[00:03:59] but a typical restaurant entree averages $12.75, and even a morning coffee habit costs around $4.50 each day. When we crunched the numbers, we knew we needed to cut back if we wanted to start paying our loans more aggressively. The worst part is, we were spending the same amount of money on groceries as we normally would, meaning we had what we needed to make dinner at home. We just preferred going out.

[00:04:27] While schedules are hectic, time is scarce and energy is limited, it's important to cut this unnecessary spending down. Note, I didn't say that you need to cut it out altogether, just dial back. If you eat out three times each week, cut that down to once. If you can, minimize to just one or two times each month, and you'll be amazed at how much money you're able to save.

[00:04:53] Turn this into a chance to have friends over more often and host potluck dinners. Everyone wants to spend less, and you can be the one that encourages everyone to do it. And number three, I embraced the side hustle. Turning my writing and marketing skills into a side hustle allowed us to take our savings to the next level. We went from putting away amounts in the low hundreds each month to nearly double that.

[00:05:22] Now with our debts paid off, we're putting away five times what we were able to save when we had debt, and we still have plenty of spending money. A win-win. While it took a lot of hard work and late nights that I may not have wanted to spend working, it got us to our end goal one year ahead of schedule. Our goal was to be debt-free by 30, and we were there at age 29. The good news is, I didn't change my existing lifestyle to accommodate this endeavor.

[00:05:51] I just allotted a few hours in the evenings, and I was working in a field I enjoy, so it wasn't as much of a burden as it may seem. Not to mention, controlling your income is hard to do with a regular, full-time job. Taking it into your own hands with a side hustle allows you to be in the driver's seat. Not sure where to start? Here are a few ideas. If you're a writer, freelance for websites. If you're a crafter, sell your handiwork on Etsy.

[00:06:21] If you're a photographer, take wedding pictures or upload photos to stock sites where you'll make a percentage of the purchase. And if you're a teacher, give tutoring sessions. Take your debt seriously. How different would your life be if you weren't burdened by loans? Would you travel to another continent? Would you save enough for early retirement? For us, the opportunity was finally buying a home, and in the end,

[00:06:49] the short-term sacrifice was well worth the long-term payoff. I'm confident you'll feel the same when you become debt-free too. So take the steps now, and you'll be there before you know it. You just listened to the post titled, Three Seriously Simple Tactics We Used to Pay Off Our Loans Early, by Jessica Thiefels with moneyminiblog.com. And I'll be right back with my commentary. You know what's funny?

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[00:09:17] at oneskin.co slash OFD. That's 15% off at oneskin.co with code OFD. After your purchase, they'll ask where you heard about them. Please support the show and tell them we sent you. Thank you to Jessica. Some really practical stuff here, and I like that none of it is complicated. The one that stood out to me was the very first tactic, updating the budget weekly instead of just once a month.

[00:09:46] I think that small shift makes a big difference because a monthly budget is easy to set and then forget. But checking in every week keeps it front of mind. This actually lines up with my own experience. Back when I started tracking my money, I did it all in a spreadsheet, which worked, but it took a decent amount of effort. I did it every night. Over the years, I moved to apps, mostly just to make it easier and more automatic. And that's really the key.

[00:10:15] The easiest version of a good habit is the one you'll actually stick with. She also mentioned cutting back on eating out. And I like that she said, cut back, not cut out. It's not about total deprivation. It's about being a little more intentional. And the side hustle piece is a nice reminder that you can attack debt from both ends, spending a little less and earning a little more to grow that gap.

[00:10:44] So if debt is weighing on you, maybe start with the simplest one, open up whatever budget you have, and just look at it once a week. That little bit of regular attention tends to change everything else. So thank you to Jessica. Thank you for being here. Wishing you a wonderful day, and I'll see you tomorrow, where your optimal life awaits.