FinanceBuzz writer Matt Miczulski may be a pro in personal finance now, but it wasn’t always that way. At one point, he had more than $17,000 in student loan debt to his name.
Miczulski graduated from William Paterson University with exactly $17,149.05 in student loans. For the first year or so after graduation, he made only the minimum payments, but when he and his then-girlfriend Mallory Miles got engaged, they decided to get serious about paying off their debts.
Those added up to about $31,000 — $17,000 in student loans and more than $13,000 in credit card debt — an amount the pair was determined to pay off by their wedding date just 16 months later.
“I set out to learn as much as I could about personal finance and debt repayment and came across two popular debt repayment strategies in the process — the debt snowball method and the debt avalanche method,” Miczulski says in an email.
“Since the debt snowball method was touted as a great choice for those who need to stay motivated in the process — as it focuses on paying off the smallest debts first and thus giving you a ‘win’ as quickly as possible — we started there.”
The two created a detailed budget that “tracked every cent we brought in and spent,” Miczulski says. They also determined exactly how much they could put toward their debts each month and stuck to it.
“We stopped spending frivolously, and every extra penny left over at the end of the month went towards debt,” he says.
Once the pair paid off the first and smallest debt using the snowball method, Miczulski says they were ready to take a bigger jump. They switched to the avalanche method, making the minimum payments across all their balances and putting the remaining cash toward their highest-interest debt instead of the next smallest balance.
“We stuck with the debt avalanche method for the next year and a half or so until most of our debts were repaid,” Miczulski says. “By the time our wedding came, we paid off $30,000 in debt — student loans and credit card debt — and had one student loan leftover with a remaining balance of about $1,000.”
The two had also saved a whopping $15,000 to put toward their wedding and honeymoon expenses in the process.
“The feeling I got after digging myself out of debt was truly exhilarating,” Miczulski says. “A weight was lifted from me, and that constant voice in the back of my head reminding me that I owed someone money ceased to exist.”
Tips to get out of debt quickly
Here are some of Miczulski’s tips for others looking to get out of debt:
Think mindset over money
“The amount of money you earn isn’t the only important factor in debt repayment,” Miczulski says. “Neither my wife nor I made a lot of money at the time we started aggressively repaying our debt. But what I quickly realized was just how important our mindsets were.
“If we didn’t truly want to be debt-free, the chances of us succeeding were slim to none. Our income would only take us so far; determination and persistence would make sure we reached our goals.”
Pay down your costliest debts first
“Get ahold of your finances, and prioritize your debts. Use the debt avalanche method to attack your most expensive debts first, as this will save you the most amount of money in the end,” Miczulski says.
Zeroing in on your highest-interest debts first can help you save on interest costs, therefore freeing up more cash to put toward other balances.
Keep yourself motivated
For Matt and Mallory, their upcoming wedding was the biggest motivator to stay on track. “We wanted to start off our marriage debt-free,” he says.
“Continue to remind yourself why you’re doing this in the first place,” he adds. “Motivation plays a big role in debt repayment.”
They also let their budget lead the way, “tell[ing] every dollar where to go, instead of allowing money to control us.”
Know where your money is going
“The entire debt repayment process was a challenge, but the knowledge I gained along the way has been invaluable and life-changing,” Miczulski says.
“I learned so much about debt and personal finance over the course of repaying my loans and credit cards and realized just how important proper money management is. My wife and I worked hard for our money, so it was silly to not know exactly where it was going each month.”