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stephanie halligan

How did you acquire $30,000 in debt? What did that debt consist of?

I got into about $30,000 in student loan debt after I graduated from college. It was half federal loans and half private loans. But it was all a complete surprise! I had no idea I had borrowed that much money each year that I was in college. I’d had a financial aid package that seem to “cover everything” – little did I know I was borrowing about $7,000 in debt each year that I was in school. And that added up.

What did it feel like to have that much debt?

I felt helpless and shocked – I wasn’t quite sure how I’d ended up in so much debt. At the same time, I graduated from college with hardly any job prospects since we were in the middle of the recession. So the feeling of earning minimum wage with $30K looming over me was overwhelming.

How long did it take you to pay it all off?

I wanted to be really aggressive with my debt. I knew the sooner I paid it off, the more options I’d have with my money and more financial freedom I’d have in my life. It took me 3 years and 11 months to pay back $34,579 in student loans (that was the principle plus interest that accrued).

What resources did you use to help you through this process?

I did a combination of things to pay off my debt. I led a very frugal lifestyle and prioritized my debt as one of my top 3 financial goals in my life. Cutting back on spending and setting a budget was key, but I knew I also had to focus on the other side of the equation, too. I made sure to ask for raises and negotiated my salary every chance that I could. That was a huge boost to my debt repayment timeline. I also used to track my debt repayment progress. Measuring my progress was a big motivator.

Did you face any challenges along the way?

After aggressively paying off $10,000 in just a year and a half, I looked at my balance and realized I still had over $20,000 left. I felt really demotivated. It was at that point that I started my blog so I could share my story with and stay accountable and motivated to keep going.

What were you doing for a living while you were paying off the debt?

I was working for a nonprofit that helped low-income families save for college. I was also working on the side so I could earn more money.

How did it feel once you paid it all off?

I felt like a HUGE weight was lifted off my shoulders. I knew that because I was debt free I had so many more options in my life. I took full advantage of my new financial freedom to quit my job and start my own business.

What practical tips do you have for people looking to pay off their debt?

The Debt Snowball is my favorite method for paying off debt because it builds motivation early on. Start by making a plan for which debt you want to tackle first, then throw your extra money towards that loan. Be sure to track your progress along the way and don’t forget to celebrate the small wins. But most importantly, be sure to focus on boosting your income. Ask to review your salary with your boss every year, negotiate your starting salary at a new job or do some work on the side. Every extra dollar helps!

To learn more about Stephanie, you can read her story and her tips on crushing debt over at her blog, Empowered Dollar.

Note: This is part of a series called “Debt Success Stories” which features people who were able to pay off a significant amount of debt. If you have a Debt Success Story I would love to hear about it. Please visit the contact page to let me know the details.