To attend UNC Chapel Hill's MBA program, Bernadette Joy Maulion, took out student loans. Approaching graduation in January 2016, she decided to look at what she owed.
"When I saw that number, after, I cried," she says. "I thought, 'Oh my gosh, how am I going to do this?'"
She had borrowed $60,000 but, because of the 6% interest rate, the amount had grown to $72,000 by graduation. Bernadette and her husband AJ already owed $180,800 for a mortgage on their primary residence and another $57,000 for a mortgage on a rental property, both in Charlotte, North Carolina.
Between student loans and those two mortgages, they had accumulated more than $300,000 of debt within the first four years of marriage.
After seeing Bernadette's new student loan balance, the couple made a plan to pay off their debts as quickly as possible, and they documented their journey on Instagram and on her podcast, The Bernadette Joy Podcast. First the loans, and then each mortgage.
As of April this year, Bernadette, 34, and AJ, 37, are debt-free. Here's how they did it.
At the time the couple started their debt payoff plan, Bernadette was working for Rockwood Search Associates as a recruiter, earning $30,000 a year plus about another $5,000 in commissions.
AJ was working for Duke Energy, making $91,000 as a project manager.
The original plan was to zero out the student loans within two years, by living off AJ's income and using Bernadette's to pay down the debt. But, to speed up the process, they drained their savings and routed half of AJ's salary to student loan payments. They contributed about $5,000, total, each month and were able to knock out that debt before 2016 was over.
"I had some challenges with [living off one salary], but the biggest part for me was how much it affected her," AJ says. "I think she felt trapped under that weight, so that's what kind of turned the switch for me to also want to aggressively tackle the debt."
To help them live on a fraction of AJ's salary, the couple also adopted a minimalist lifestyle. They downgraded from two cars to one, which saved them $400 a month in lease payments, gas, and insurance. They sold unneeded clothing, furniture, and infrequently used items in their garage.
Their first yard sale netted them $400 in four hours. "It helped make extra income, but it also curbed spending," Bernadette says. "Seeing how much I was paid for things [I sold] and how much they depreciated deterred me from wanting to buy things."
The two cut back on nights out with friends, opting to host game nights and other free or cheap activities instead. They trimmed their restaurant budget to about $100 per month while boosting their grocery budget to $200-$300. "When people ask me for advice [on how to save money], I say, 'Become a really good cook,'" she says.
Bernadette and AJ stopped using credit cards and now they pay for everything in cash. Lastly, the two picked up some side hustles including driving Uber and working as movie extras, which collectively netted $800, and AJ did some real estate work as a buyer's agent, which earned him $4,500.
"We got so much momentum," says Bernadette, that after eliminating her student loans the couple decided to keep up with their one-income, minimalist lifestyle to knock out their mortgage debt, too.
For the next two years, they made monthly payments of $3,000-$3,500 to tackle the mortgage on their rental property, which they paid off in 2017. They later sold that property for $153,000, and they used what they made to accelerate the repayment of the mortgage on their home.
In April of this year, they had done it: All of their debt was paid off.
To celebrate becoming debt-free, the couple went to Italy for a week in April. They paid for the whole trip in cash.
Bernadette says the bigger reward was being able to start her own financial consulting business. Her mission: Eliminate $1 million of debt from others' lives.
"For me, it has given a sense of freedom, not just financially, but confidence that I can do things that before felt unattainable, like start yet another career and make travel plans in cash," she says.
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