debt-free

How I Paid off $12,000 of Debt in 6 Months While Enjoying Guilt-Free Spending

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On a chilly December morning in 2016, on the cusp of turning 29-years-old, I woke up with a panicked realization that I was about to become a full-on adult and I knew absolutely nothing about money. 

I had a Bachelor of Arts in Professional Writing, and a Master of Science in College Student Affairs, and despite being fairly well educated, my financial education was pitiful. My parents never talked about money, they never shared how much they made or how they budgeted, and the subject seems taboo around most friends so I was very much in the dark. 

To cope with this lack of information, I had developed a fool-proof plan for my financially ignorant self. I called it, “Spend as little as possible so I don’t run out of money to buy food and die of starvation”. Though physiologically safe, this plan did not provide a lot in the way of an enjoyable lifestyle.


How I Got into Debt

Finishing grad school in July of 2014, I owed my bank and the government a combined total of $45,000. I was unemployed for about 5 months because I desperately wanted to stay in the U.S. but, as a Canadian, that meant I needed to find a university that was willing to hire an entry-level administrator on a work visa that they were saving for distinguished international research professors. My determination to prove I was worth the investment had me basically living in my University Career Center (which eventually sparked my interest in starting my resume writing business, so in hindsight, I can’t complain about that).  


A Brief Look at My Dark Days

Because I was unable to find a job in the U.S. but I was too stubborn to move back to Canada, times got tough. My girlfriend of the time was paying for most of our expenses and my dad had to wire me money a couple times, though he refused to call it a loan because he didn’t want to burden either of us with any pressure for me to pay him back (really sweet, but also an example of how money wasn’t a subject we wanted to hover on for too long). 

Without a clear sense of direction or any kind of financial stability, I essentially melted into a shell of my former self. I lacked my normal confidence and I lost my drive to do much of anything aside from play NBA 2K14. It was a whole ordeal and I plan to blog about that in more detail in the near future, but for now, let me just tell you, it sucked.


Okay, Happy Time Again!

In November 2014, I made the big decision to move back to Canada. Luckily for me, I had worked so hard on developing my resume writing and interviewing skills in my attempt to earn a U.S. work visa that I was immediately hired to the first job I applied to back home!

The job was at my undergraduate institution, York University, planning the new student transition programs and the salary started in the low $60K range with an annual step progression. 

The First Plan is Not Always the Best Plan

I spent the next two years paying off debt using a new financial plan I called “Spend as little as possible so I can give all my money to the bank and the government so they don’t yell at me for owing them money” plan. 

The plan worked. I was paying off about $850 per month and then whenever I had a substantial chunk of cash in my account, I’d ship it off to either the bank or the government to lower the principal on the loans. 

By December of 2016, in just 2 years of working, I had paid off $33,000, which is about $1,300 per month. I remember feeling proud that I was able to do that with only my fear-based system to drive me. 

Beware of the “Fear-Based Savings Plan”

The problem with the fear-based system is that it causes a lot of discomfort. I hadn’t been on a vacation in years. I only owned three pairs of pants. I rarely went out for dinner or even lived the luxury of buying myself blueberries. It also caused a lot of arguments with my girlfriend, which you know if you’ve experienced any money-centric agruements, is the worst. 

So, on that frosty December morning, I woke up and made a decision. I was going to learn about money and take control of my money. Here’s how I did it!

The Second Plan… The Much Better Plan

Within that month I read about 8 personal finance books and one, The Millionaire Next Door: The Surprising Secrets of America’s Wealthy, by Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D. stressed the importance of creating a personal budget to guide your spending. 

Now, I’ll admit, I’m a bit of an Excel nerd, so it didn’t take much convincing for me to build a spreadsheet to track all my monthly expenses versus my income. By doing this, I was able to not only track and adjust my spending, but I was also, for the first time in my life, able to identify money I could spend on myself, guilt-free!

I built the budget by making a row for every recurring monthly expense: food, rent, phone bill, metropass, toiletries, gym membership, haircuts, etc. Then I added categories for things I’d have to save up for monthly that I wouldn’t be buying every month like clothes (pants) and gifts (oh yeah, I was also a terrible gift giver during this era. Just ask my mom and her bag of Starbucks coffee beans).

Then, after looking at all the money I was obligated to spend each month to keep my life moving, I could see how much was left over to put into student loans. By budgeting, I was able to see that I could comfortably up my loan repayment from $1,300 per month to $1,600.



The Best Part: Guilt-Free Spending and Logical Discussions about Money

After calculating all the monthly expenses, and upping my loan repayment rate, I still had a few hundred dollars left over. So I then created a “Dating” budget line, and an “Entertainment” budget line and even a… “Vacation Fund” budget line where I started putting money aside for my first trip in years! 

Adding these pieces to my personal budget meant so much to me. It significantly reduced my financial anxiety while allowing me to spend money on myself and my loved ones without stress for the first time in my life. 

As things got more serious with my girlfriend, Ariana, it got easier to talk about spending together. Instead of saying “those cherries are too expensive”, I was able to say, “I only have $45 in the grocery budget for this weekend so if we want those cherries, we can’t have the watermelon”. I find it so much easier to talk about money with literal numbers than in the abstract. 


Paying Off the Loan

Paying off $1,600 a month from January to May allowed me to whittle down the final $12,000 pretty quickly and then in June of 2017, I submitted one final lump sum of nearly $4,000. I was done! Debt-free for the first time in 8 years with a fully paid-for education. 

It felt great!



Staying Debt-Free

I continued to use the budget for months after I paid off my loans in order to start saving for my investment portfolio and keep tabs on my spending. After a while, when I got a good handle on my expenses, I stopped keeping track and set up automation with my bank so portions of my paycheck each month would go into investment and savings accounts for things like retirement saving, personal development, and food. And I still know roughly how much I can spend each month on myself, just for fun :)

If you’re interested in budgeting your personal life, sign up for my mailing list and I’ll send you my personal budget template for free along with other similar stories and tips, and tidbits!





The Real Reason I Started a Business

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Why did I start this business? Really?

This is a tough question. To be honest, I have written an opening paragraph and then deleted it four times now but that wasn’t getting me anywhere so I’m just going to try the stream-of-consciousness style of writing. Bare with me, please.

In December of 2016, as a 28-year-old man, I literally woke up one morning in a panic when I realized I knew nothing about money. I had always been frugal, but that was mainly because the extent of my financial plan was “spend as little as possible so you don’t run out of money to buy food and then die of starvation”.

Lying in bed next to my sleeping girlfriend, Ariana, I googled “Best books to learn about money” and found Rich Dad Poor Dad by Robert Kiyosaki. It was only $8.95 so I went to the mall and picked it up later that day. I read Rich Dad Poor Dad over the next three days and I can’t say I understood much (I’ve read it twice since and taken in a lot more), but it certainly got my financial blood pumping.

I read about 8 more personal finance books in the next month and also had a long talk with my most financially successful friend about savings, budgeting, and investing. After just a few weeks of vigorous, panicked financial education, I had designed a personal budget and created a master plan to pay off the last $12,000 of my student loans in 6 months on only my income as an early-career university administrator (see that story here).

Once I had the budget plan in place and got closer to sending in my final loan payment, I started to think about what I was going to do with all my extra money. I was paying off about $1,600 per month and I knew I didn’t want to just waste that money by immediately upgrading my lifestyle and taking on more expenses. I wanted to play the long game… I just didn’t know what that meant yet.

I did a deep dive into investment research, including reading The Intelligent Investor by Benjamin Graham, a 500+ page paper brick that the internet said was for “beginners”. It went waaaayyyy over my head. In the end, I decided to open a Tax Free Savings Account, and invest my money there using fairly safe vehicles like Exchange-traded funds (ETFs).

By July 2017, after one final large lump sum payment of over $3,000 (had to tighten the belt that month), I paid off my student loans and started saving to build my investment portfolio.

The weightlessness of being debt-free was incredible! I don’t own a home or a car (and don’t plan on doing so anytime soon either, but that’s a conversation for another time), so I really had no responsibilities outside of my day job at York University.

I had no debt. I had a reliable, unionized job with good benefits and an enviable pension. I could have stopped there and been fine, but something wouldn’t let me.

You can call this a blessing or a curse, but for as long as I can remember, whenever I’ve had a moment in my life where I felt like I was “good” and I could just coast, something bad would happen to me, usually health related. Maybe that’s why I was afraid to let myself relax, for fear of getting sick again.

I know a part of it was financially driven. Maybe I wasn’t satisfied with the passive 4% to 8% growth I was going to get from my ETFs. Maybe reading about all the entrepreneurs and lifestyle designers like Chris Guillebeau and Tim Ferriss during my quest for financial literacy had me dreaming of a life of financial freedom.

Most likely, it was a combination of fear, drive, and dreaming that revved my engine and got me moving. At some point between July and September 2017, I committed to the idea of starting my own business.

It didn’t take me too long to decide that I wanted to help people find jobs through resume writing and interview coaching. During my last few months in grad school, in 2014, I practically lived in the Career Center, (I’ll explain why another time, but trust me, it’s a juicy tale) and since then, I had become the go-to resource for friends and family members who needed help during their job search.

My next questions were, would people actually be willing to pay for my help, and how could I find those people? These two questions paralyzed me into inaction for several more months, but luckily, I’m a big New Year’s Resolution guy, so on January 8th, 2018, I got my shit together and launched the damn business (forgive the cursing, I just wanted to drive that point home).

Nearly 18 months later, I’m still going hard. Whatever the initial reason was, it was good enough to get me started. What’s more important is that I know now why I still run the business. I love connecting with clients and helping people feel confident about their job searches. It’s been very rewarding to learn how to market myself, develop my reputation and as resume writer and interview coach, and find new ways to expand my business.

As long as I’m able to help people and keep challenging myself, I plan to keep this thing running!