Lee Huffman, 41, finance manager at a regional bank in Anaheim Hills, Calif.
Lee Huffman knows first-hand how tempting it can be to spend extra money instead of putting it toward your loans. When he paid off his $56,000 car loan last year, he says he would have loved to trade in his car for a newer model or spring for NBA or NFL game tickets. But he was still paying down his $30,000 student loan bill, and didn’t want to fall victim to “lifestyle inflation,” or upgrading his spending as soon as he got some wiggle room in his budget.
“I’ve always had the attitude of living beneath my means and saving for the future, with the occasional splurge,” Huffman says, adding that all his bonuses and raises have gone toward paying debt, saving for retirement or purchasing rental properties. So instead of upgrading his car, Huffman doubled-down on his debt, and funnelled the money he’d been using to pay the car loan to his student loans—which he ultimately paid off in March 2016.
Now that he’s debt-free, Huffman has even grander plans for his extra cash: “Over the last year, I realized that I could retire in 10 years by accelerating the payoff of my mortgages by redirecting the student loan and car payments toward my mortgages, while continuing my normal 401(k) savings,” he says.
Lauren Elliott, 26, a restaurant and retail employee in Indianapolis, Ind.
Back in 2012, Lauren Elliott was struggling to keep her diabetes in check. So she researched and attended a wellness retreat—with a $6,000 price tag—where she learned new healthy strategies for eating better and managing her condition. In a stroke of luck, she also met her future employer at the retreat: a chef who later opened a raw vegan cafe and asked Elliott to help her get it off the ground.
“I don’t regret attending the retreat,” Elliott says. “[It] ended up being an investment in my health and in my career.”
But by the time 2015 rolled around, the medical debt began to weigh heavily on Elliott. Not only was it a source of stress, but it was also a major roadblock to fulfilling her dream of moving to Colorado. She’d spent the winters of 2013 and 2014 working at a ski resort in Aspen, and loved it. But she knew that if she wanted to return in 2016—and perhaps stay permanently—it’d be wise to stay home for the 2015 season, wipe out her medical debt and start saving.
So Elliott hunkered down and created a plan. She started tracking her spending, cutting back on extras like shopping trips, and, most significantly, picking up a new job as a sales associate at REI, which netted an additional $800 per month. In total, she was able to contribute about $1,500 each month toward her balance.
Just four months later, in early 2016, Elliott was debt-free. “It felt like freedom—like I had the opportunity to open new doors in my life because my debt wasn’t holding me back,” she says. Now, Elliott’s saving up for a car that can handle Rocky Mountain conditions, then she’s planning to pack up and head to Colorado this winter.
July 22, 2016
July 22, 2016