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Living without debt and achieving financial freedom is what we all dream of. It’s why I started this blog and why I’ve written a guide about achieving financial retirement.
It goes without saying but it’s impossible to achieve financial freedom without paying off your student loans. The below video/post from Matt D’Avelia is a fantastic crash course on the basics of paying off debt.
For much deeper and robust student loan guides, check out this guide from Dave Ramsey and this guide from The Simple Dollar.
The Written Version:
Let’s talk about how to get out of debt.
I graduated college with $97,000 in student loan debt and did the smartest thing I could think of at the time; I bought a brand new car.
I was living with my parents literally in their basement struggling to make it as a filmmaker. I was young, but I had reached my breaking point. I thought about how my life would play out if I continue to pay the minimum on my student loans. If I continue to just ignore my finances completely. I’d probably be approaching 50 years old, looking back on a lifetime of being crippled by this debt.
I’d probably still be living in my parents basement. It was during one of those nights at home in New Jersey that I really decided to turn things around. I began by organizing all my finances and for the first time taking a deep look at what I’d gotten myself into. I plugged my banking information into a wealth calculator online, and was a little bit surprised to say the least.
I didn’t just have no money; I had less than no money. I was in debt.
Now, obviously I knew this before that night, but for some reason, it just didn’t register. It was that moment that I realized all the money I was making then, and would make for the foreseeable future, it wasn’t even mine. That’s important.
So I’m going to say that again: I didn’t see that money that I was making as mine. It wasn’t my money. It was the bank’s money. I was in the hole.
That mindset carried me through the next few years as I started to earn more money and pay down my debt. I didn’t realize it at the time, but there were a few steps that I followed early on, and still to this day, that helped me get out.
1. Organize Finances
Number one. I organized all of my finances.
You can do it either on a spreadsheet or you can use an online service like mint.com, but really at the end is to get a bird’s eye view of your earnings, your savings, and your debt. And it’s a complete game changer. And it woke me up to the problem that I had.
2. Learn About Personal Finance
Number two was I picked up a book on personal finance.
Now, this is incredibly important. I started with this book called The Total Money Makeover. It’s super straightforward, oftentimes incredibly corny, but it’s that simple approach that’s helped millions of people. Because before you take that first step, you really need to understand the strategy and the direction that you need to be heading.
3. Spend Less Money
Number three, very obvious, but spend less money.
I spent less money, and it’s a no brainer. It’s so straightforward, but it was really moreso the principles behind it that helped me. It was minimalism and simple living. It was prioritizing my life, figuring out what was important, and stop spending money on useless shit that didn’t add value to my life.
4. Earn More Money
Number four was I started to earn more money.
Now this is easier said than done. But most of us do tend to earn more money as we develop our skills as we are in a career for a longer period of time. For you, it might mean charging your clients more money or leveraging another job to get a raise. You’re always going to be taking a risk when you try to bump up your salary or your income, but it’s worth it in order to grow.
5. Be Patient
Number five was I was patient.
You know, I was really anxious In the beginning, I just wanted to get to the finish line before putting in any of the work. But getting out of debt is a process and short bursts of inspiration and motivation aren’t going to carry you through the entire way. So just had to cool it. Had to relax and let myself be patient.
6. Read Personal Finance Books Regularly
Number six was I continued to read one personal finance book per year.
So this is really important because these days I know pretty much everything there is to know about personal finance. Reading one book a year just keeps my brain priorities straight. It keeps me on course, when maybe my spending decisions have gone a little bit out of line.
Within four years, four and a half years, I completely paid off all my debt, all my student loans, even the car payment.
How to Push Yourself to Take the First Step to Financial Freedom
To this day, I can’t really tell you what that allows me to do. It just gives me the freedom to take on projects that only excite the hell out of me. I’m able to travel across the country on a whim move to a different city. There’s so many different opportunities now that I can take. And also there’s an element of stress that’s gone when you don’t have these massive bills piling up at the end of the month.
But it really all started with one decision. And it was the decision to take a look inside. It was the take a look inside of my wallet, but also inside myself to recognize the problem, to recognize that being in debt shouldn’t be the status quo. And I was just fed up with it.
So, if you, yourself, are in debt if you’re looking to move forward, I hope that you got a couple of steps in here that you can take into practice.
Pick up a book.
But really, number one, start to ask yourself the really important questions, the tough questions.
You know, what do I want out of life?
Do I really want to be in debt when I’m 50 living at home in my parents basement?
Thanks for watching. Subscribe to this channel for new videos every week.
Do you want to see behind the scenes content from this video as well as others that I make on the channel will then head over to my Instagram? It’s @mattdavella
And lastly, do you like podcasts? Mine is called The Ground Up Show. I interview reporters, comedians, rappers and entrepreneurs about their journeys, and how they got things started. Go to groundupshow.com for the podcast.