My next post is from McKinzie Bean with Moms Make Cents. She shares how she graduated with 2 bachelor’s degrees with ZERO student loan debt. Plus, how she and her husband paid off the rest of their debt BEFORE she was 25 years old and became debt-free by 25!
Debt-Free By 25 – How We Did It!
I’ve always been a frugal person.
My mom taught me how to compare prices at the grocery store. The awe came over me when I realized that if you buy a different size, you can get more for less. To eight-year-old me, that was mind-blowing.
But even with my frugal attitude as I grew up, life got expensive.
The biggest expense for most people in their twenties is paying for college. You hear story after story of the dreaded student loan debt.
I was fortunate enough to graduate with two bachelor’s degrees without any student loans.
No, my parents didn’t fund my tuition. I did it all on my own.
Tips To Pay For College To Avoid Debt And Be Debt-Free By 25
1. Apply For Scholarships
Apply for as many scholarships as you can get your hands on. I started applying for scholarships at 14, which may have been a bit over the top, but it got me in the habit of looking for those opportunities.
There are loads of scholarship opportunities.
There are university-level scholarships that apply to all students in the university, departmental scholarships that apply to those in your specific program, need-based scholarships, merit-based scholarships, talent-based scholarships, and more.
Fortunately, I was able to earn an academic merit-based scholarship, a program scholarship at my university, and a departmental scholarship.
Between these three scholarships, I had 4 of my 5 years of tuition covered, $1,000 I could apply to tuition, books or fees, and ⅔ of my housing covered for my first two years of college.
2. Financial Aid
If you qualify, take advantage of financial aid. When I first went to college, I did not qualify, but if circumstances during your education change then apply!
I got married during college which made my income independent from my parents, and I was able to qualify. Two years later, I was pregnant, and that changed our dependent status, and I was able to then qualify for more financial aid.
3. Consider Employers with Tuition Reimbursement
Some employers will actually pay for all or a portion of your tuition. After we were married, my husband worked for a company that offered tuition reimbursement. As long as he was working full-time and had high enough grades, his company would cover 2/3s of his tuition cost. This saved us thousands of dollars!
Ways We Were Debt-Free By 25
1. How We Got Rid Of Our Car Payment
When my husband and I got married, I was borrowing a car from my parents, and he had a car payment on a Toyota Camry. We knew we wanted to get out of debt as fast as we could.
A couple of months after we were married, he sold his car, and we bought an older car with higher miles with the cash we had from our wedding.
Soon after, my parents needed their car back, and I had to find a car. I found the perfect one and did not have to finance it, creating more debt for us.
A purple 1992 Camry, with a peeling clear coat, faded bumper, and cracking interior.
Now, this may not sound like your dream car (it wasn’t mine either!), but it was only $1,800. This cleared out our remaining savings in our bank account, but now we owned both of our cars free and clear! That meant no more car payment debt!
(Interestingly enough, because that car had depreciated so much by the time we bought it a few years later when someone hit it, and it was considered “totaled,” we got $1,600 from the insurance. We drove that car for 3 years for only $200. Not bad!)
At this point, we were out of money, but the only debt we had left was my husband’s student loans.
2. Paying Off Student Loans
Before my husband and I were married, he had racked up $13k in student loans (I hadn’t taught him my thrifty ways yet). However, we ended up paying off this debt.
We set the goal of not getting into any more debt. Plus, we set the big hairy goal to graduate from college debt-free.
Neither of us had high-paying jobs. The highest-paying job I had in college made about $12 an hour part-time, and his income wasn’t too far from that either.
Growing up my grandpa always told me, “It’s not what you make, it’s what you save.”
How We Saved More Money To Avoid Debt
We took that to heart and tried to live frugally.
We cut out unnecessary expenses, bought almost all of our furniture secondhand, found inexpensive meals, etc. Anything to save money and not finance unnecessary items.
A year into our marriage, I found couponing, and I was hooked. I stretched our monthly budget much further than I could before by stocking our pantry and our cabinets with food and toiletries that lasted for years! With a little bit of time and effort, you can save a ton!
I loved searching my favorite couponing websites each week and figuring out how I could stack coupons with store promotions. And how I could use cashback apps to get products for next to nothing! Couponing saved us tons of money when it came to household groceries and cleaning supplies!
We slashed our budget down to the absolute minimum, but we were so busy with work and school that we didn’t have a lot of time to spend extra money.
Most of our evenings ended with Netflix and making a homemade treat. It was cheap and a lot of fun. But the best part was, we were still spending time together, but not spending unnecessary money.
Making More Money
Starting A Side Hustle
Now, as much as I agree with my grandpa and what he said about saving, there comes a point when you just can’t save anymore because there are no more expenses to cut.
This is when you need to make extra money. All it takes is a little research.
I did little things in college, like taking surveys for money, but in my senior year of college, I found out I was going to be a mom, and boy did that light a fire under me.
I knew that 1. I wanted to be able to stay at home with my baby, and 2. If I wanted to do that, I needed to figure out a plan fast!
I scoured the internet for the best online jobs for moms and eventually found the right opportunity. A local small business owner needed help running their social media accounts, and I was able to start as their virtual assistant.
To say I was over the moon would be an understatement. I only needed to make an extra $500 a month in order to stay at home, and this one client pretty much covered that!
As I continued working for her word got out about my new found business I had more clients that were interested. Roughly one year after I started working as a virtual assistant, I was able to nearly double my rate and made more than 2.5x than I did at my previous job at the University.
In 2016, right after my baby turned one, I decided that I wanted to start a blog. I knew that there were thousands of moms out there like me that wanted to find a way to stay at home with their children and I had resources that could help them!
This became my new passion project and I began staying up late every night writing new blog posts.
After months of hard work, my blog began to take off. I fulfilled my mission of helping other moms and at the same time, I was able to make money doing it! It was an absolute dream!
Between sticking to a budget and working on the side we were able to crush those student loans and paid off all of our debts before we graduated. That was a huge help for us!
Full-Time Business Owner
As I continued to run my blog and pursue other business opportunities, my income skyrocketed. Quickly, I surpassed my husband’s income at his corporate job, yep you read that correctly!
Being a mom and a business owner started to become too much to juggle and in March 2017 my husband was able to leave his job to pursue the blog and businesses with me full-time.
In June 2017 (2.5 months later) I turned 25.
At this point, we were completely debt-free, with money in our savings account, living as full-time entrepreneurs.
If you would have told me that five years before when we got married, I would have said, “no way.” But life has a way of surprising you and this time it was a good surprise. We achieved this goal by working together and so can you!
Reasons For Successfully Being Debt-Free BY 25
There were many factors in us being able to meet our goals, but here are the three main ones I’ve boiled it down to. And, you can do these same things to be debt free!
1. Setting A Clear Financial Goal
We specifically outlined what our financial goals were and set a concrete plan to meet those financial goals. We created a budget that we could live with and we stuck to it!
2. Made Substitutions
Living frugally doesn’t have to be boring. We found lots of fun activities to do for cheap or free. Instead of going out to eat, we’d make something special at home. We swapped out pricier activities for equally fun, cheap ones. You can still have fun without spending a lot of money!
3. Hustling Hard
I won’t lie running my businesses, especially in the first couple of years, was one of the hardest things I ever did.
As I was getting my blog going I would work every night from 10:00 PM to 2:30 AM to create content and try to build my audience. I’d get up a few hours later, slap a smile on my face and read a thousand books to my baby and one hundred rounds of patty-cake.
But all of those sleepless nights were worth it. I dug deep and because of it we were able to accomplish our goals and then some.
In conclusion, if getting out of debt sounds daunting just take the first step. The accumulation of small steps in the right direction is what helps you achieve your goals. If we can be debt-free by 25, you can to!
McKinzie is a mom of two, and a personal finance enthusiast. She loves teaching other moms how to save money, make money, and take control of their financial situation. She has started five profitable businesses and in college, she double-majored in Financial Planning and Psychology. You may have seen her in publications like Forbes, The US Chamber of Commerce, Yahoo Finance, Money.com, The Penny Hoarder, & more.