The pursuit of the American dream has been part of my story from the start. Without the courage of my family, I wouldn’t be here. My mother sacrificed herself to keep me in America so that I could take advantage of all the opportunities available.
As a first generation American of Haitian descent, education has always been seen as the gateway to a better future. So I did what many Haitian families ask their children to do: go to school, get good grades, then go to college to earn a lot of money and one day retire in a better financial situation. .
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At no time while I was in high school was there ever a conversation about the cost of college, how to prepare for it, or the implications of borrowing money. No one told me that the amount I would have to pay back would be more than the amount I would have borrowed. As it turned out, the road to success that had been laid out for me led to six figures in student debt.
When my wife and I got married in the summer of 2017, we said “yes” with a debt of $ 211,000 between us. From student loans to credit card debt to a personal loan, we had it all. We had no idea how we were going to pay or how long it would take us, we just knew we couldn’t stay there.
In two and a half years, we’ve paid off $ 224,000 in debt (the $ 211,000 plus $ 13,000 in interest), with neither of us having a six-figure salary. Now we are focused on building generational wealth, changing our family heritage, and working to become millionaires. This is how we got started.
We got on the same page about our finances from the start
When my wife and I first met, I had already been working for a few years and was very aware of my student loan obligations. She, on the other hand, was pursuing her Masters in Nursing and had no idea what she owed. One day, while we were discussing our finances, I recommended that he find and write everything down. When she saw the full amount she owed the very first time, she was shocked.
Our conversations led her to apply for and receive a scholarship that paid for her master’s program, a program that would have added $ 80,000 more to her school debt.
We didn’t just talk about numbers. We knew money feuds were one of the main causes of divorce, so we were intentional even before we got married. We made sure to talk at length about our monetary values and how our approaches to money had been shaped. These conversations have not always been easy, but they have certainly been a key element in enabling us to build a solid foundation.
We established our “why” for seeking financial freedom
When we looked at how much we owed, we were overwhelmed. We decided not to start with the numbers, but rather why we wanted to pursue financial freedom. One of our main reasons was to make sure that one day our kids wouldn’t have to get rid of six-figure student debt like we did.
Another part of our “why” was my mom. She had fully supported herself since my father passed away when I was 7 years old.
My wife and I wanted to travel more and become a voluntary job in our forties so that we could spend more time with our loved ones and not be forced into a 9-5 job until the traditional retirement age.
Our “why” was the driving force behind the change we wanted to make. It was the main source of our motivation and a point of reference whenever we felt like giving up or breaking our budget on our debt free trip. Starting with the end in mind, we were able to reverse engineer and see exactly what we needed to do to make it happen.
We combined our finances and got a zero-based budget
When we got married, our philosophy regarding our finances was to put all the income we earn on the table and decide together as a team how best to use it.
We’ve allocated our funds using a zero-based budget, a budgeting method where you give every dollar a goal so you know where 100% of your income is going. The difference between a traditional budget and a zero-based budget is that a traditional budget allows you to carry the remaining money over to the next month. The zero-based budget forced us to allocate these funds to specific purposes such as paying additional debt.
Budgeting allowed us to see how quickly we would be able to meet our goals and whether or not we needed to make any adjustments.
With minimum student loan payments of over $ 2,000 / month, it would have taken us 15 years to pay off our debt and cost us just $ 125,000 in interest. Determined not to create someone else’s wealth, in the summer of 2017 we decided to make some drastic changes.
We have reduced our expenses and increased our income with ancillary activities
In order to find more money to pay off our debt quickly, we started by focusing on what I like to call “the big three”: housing, food and transportation.
We have kept our housing expenses below 25% of our monthly net salary. We had no car debt and we carpooled to work to reduce our expenses even further. We made our lunches at work every day and made dinner at home 90% of the time. All of these little things have saved us thousands of dollars every year.
After reducing our expenses as much as we could, we turned our attention to the income side of the equation. Between the two of us, we had five jobs: our main jobs and three ancillary activities. My wife’s side activities included babysitting and providing overnight care for newborns. I got a day job in my current profession as an occupational therapist at the local hospital.
If there was a shift available – nights, weekends, holidays – we signed up for it. Over time, our work began to bear fruit. In the first year of our debt-free journey, we made $ 66,000 from pre-tax side scramble income. The second year, we won $ 40,000. It is in large part because of this that we have been able to accelerate our debt repayment targets.
What has freeing ourselves from our debts allowed us to do
We got rid of our debts, other than our mortgage, in November 2019. My wife and I both work in the healthcare industry. When the pandemic struck, despite reduced working hours and uncertainty resulting from a global health crisis, we were able to save and invest $ 127,000 in 2020.
For the first time ever, we were able to build a six month emergency fund and maximize all tax-efficient accounts including our 401 (k), Roth IRA, and Health Savings Account (HSA). We have also started investing for our son’s future in a 529 plan. We are now on track to do the same in 2021.
We just closed our first rental property and have a plan in place to help my mom retire over the next 3-5 years. This was all only possible because we were no longer making regular payments to Sallie Mae and Great Lakes.
Getting off debt was one of the best decisions we have ever made. We no longer feel the stress and anxiety that once overwhelmed us. Beyond that, it opened doors to opportunities far beyond our wildest dreams.
Now, at the rate we’re going, we’re on our way to becoming millionaires this decade, and we’ve used our experience to help others get off debt, through our Freedom Is A Choice Movement financial platform and The Debt Slayers course. Bootcamp. I truly believe that the life you live tomorrow will be based on the choices you make today. My wife and I often say, “Much more is possible when you are not in debt” and we are living proof of that.
Leo Jean-Louis is a first generation Haitian-American author and financial educator. After his article on paying down $ 104,000 in debt in 12 months went viral on social media, he and his wife founded the company. Freedom is a movement of choice, and their signature price, The Debt Slayers Bootcamp, to teach millennials how to break free from debt without being miserable in the process. His financial advice and personal finance background have been featured on Business Insider, Yahoo Finance, “The Steve Harvey Show”, Black Enterprise and Bankrate.
The article “We paid $ 224,000 in 2.5 years and are on our way to becoming millionaires: this is how we started“was originally published on Growing Up (CNBC + Acorns).