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Feeling trapped at a job because you're dealing with debt? Find out how you can pay off your debt faster. Whitney Hansen shares how she eliminated $30,000 in less than a year!
So financial independence in the truest sense is for me when you are officially at a point where you don't have to work anymore, you're officially retired if you so choose.
But the goal of that is, is that you can start to have a lifestyle that kind of mimics financial independence earlier on.
If you're very careful and you are paying off debt and you're intentional with your spending, and if you're not letting it get out of control, I think you can actually live some of those benefits sooner.
And so that's kind of what I what I believe is that you can have this really cool life if you are willing to do the hard work.
Now, you can actually have that life sooner than 65 years old.Whitney Hansen
Paying Off Debt Faster
I've been noticing a shift lately when the topic of money and paying off debt comes up.
I hear from friends, family, neighbors and work buddies is this idea of having more options.
It's not about a specific amount in the bank or retiring by a certain date.
It's about being drawn to financial freedom because people to want to be stuck at a career they don't like or in a situation because they are just overwhelmed with debt.
My guest today, Whitney Hanson, knows all about that desire to have more options and less debt.
My guest today, Whitney Hansen, knows all about that desire to have more options and less debt.
Today we'll get into:
- why motivated her to fast track paying off her student loans
- how she was able to get rid of $30,000 in less than a year
- what first steps she suggests if you want to be debt-free sooner than later
Hope you enjoy!
Resources to Help You Dump Debt and Start Building Wealth
Tired of being in debt? Here are some resources to help you dump it and start saving more!
- Best Budget and Money Apps: Personal Capital, Tiller, Mint
- Grow Your Stash Faster: High Yield Savings with CiT Bank
- Jumpstart Your Marriage and Your Money
- Attacking Debt: Which One First?
- Crush One Debt: Money Workshop
- The Great Debt Dump: Running Toward Financial Freedom with the Power of Community
- Which Debt Payoff Method Is Right for You?
- Knock Out Your Credit Card Debt
If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.
Thank You to Our Sponsor Coastal!
Support for this podcast comes from Coastal Credit Union. If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today!
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Defining Your Why with Paying Off Debt
Elle Martinez: Let's begin with something that I hear with a lot of financial experts.
If you have low-interest debts like student loans or a mortgage, it's wiser to invest and contribute that money towards retirement rather than pay off the loan sooner.
And I know when you run the numbers, it does seem like that is the smart choice. But again, personal finance is personal.
So why in the world would Whitney want to push herself to pay these low-interest federal student loans?
Whitney Hansen: Well, for me, I was looking at I studied accounting and undergraduate, and so it was good. And it was OK.
But once I graduated, I realized after working in public accounting, it was not for me.
And I sat there looking at this and I was like, OK. Thirty thousand dollars of debt. That is almost my entire salary for a year. And I'm looking at the cost-benefit I like, ‘My God. That's a lot of money'.
And so for me, it was kind of just like a no brainer because I started to realize that that debt was making decisions for me.
So it was starting to dictate like what kinds of jobs [to] take, how long [to] stay in a job that I really didn't like because it was paying the bills and helping me pay off debt.
So it's like I was looking at that stuff and realizing that it plays such a big role in our lives, whether we think so or whether it's subconsciously, but it is dictating some of the decisions that we make.
And so for me, I didn't want that to be the case. I wanted to truly be free to make my own decisions regardless of what financial implications came out and be able to have the confidence to take on a new job, the confidence to say, no, this job isn't for me because it's not what I want.
And I think not having that debt for me, that's what I could do, is have more confidence in my choices besides having this confidence.
Elle Martinez: Whitney was also drawing upon a lesson she had learned from growing up.
Whitney Hansen: It was definitely one of those life lessons, but it came directly from growing up.
So what I grew up in a really crappy childhood, not not a great, very good family. It was kind of sad, but I watched my mom stay in an abusive relationship because she didn't have money to leave the situation. And it sounds like everybody thinks she actually if you have the money, that's that's not really what was keeping her there. But in a lot of ways, it was.
And it was because she had six kids that she had to take care of, too. And being a single mom with no education and going out into the world and trying to put your foot down is really scary.
And I know that's the way a lot of women go through to. And so that's where I started to realize that money actually matters a lot. And if you are constantly struggling or you don't have your own money, you can be stuck in situations that are at less than ideal solely because of money. So that's where I initially learned and started to realize that it was a bigger deal than we thought it was.
Elle Martinez: As the listener of the show, I'm sure this resonates with you why she decided to go this route, but a lot of people in her circle just weren't getting it.
Whitney Hansen: I got a lot of disbelief and people didn't really think I could do it. And to be fair, I wasn't rolling in the dough like whenever I share this story.
People are like, oh, you had to be making six figures. That was actually not the case at all.
I've always lived like a college student. So that's what I did a little longer, too.
And so when I would share with them what I was trying to do, they would immediately do this analysis in their head of like, can you actually do that? Is that mathematically possible?
And for them, they didn't see that it was possible. So therefore, they projected what they thought was possible for their own lives on to me. And many of that was you can't do that. That's not going to work.
What if this happens? What about this? How are you going to live? What about your quality of life?
And I was like, you know, I can do a lesser quality of life for a year to have a better quality in my entire future.
That's OK for me. But people just there was a lot of naysayers that didn't think it was possible. They didn't think I could do it.
It was frustrating, but I used it as motivation to kind of fuel me and get me excited and be like, I'll show you.
And it worked.
Find Your Support Network
Elle Martinez: Fortunately, Whitney's boyfriend, now fiancee, was very supportive, even if he didn't quite understand the rush.
Whitney Hansen: We have been dating since high school. So I think now we're going on something like 14 or 15 years. I lost track at this point. So we were dating.
We were at that time, we did not live together yet. So I had my own home. He had his own home.
He was very, very supportive of the entire pain off that process. He didn't think that I should be you so intense with the level I was going.
Elle Martinez: Like many couples, Whitney and Tony were coming at it from different perspectives based on their background.
Whitney Hansen: He's he's been very blessed that he didn't have to take on any student loans or any debt like that.
He's been very, very blessed, regroup in very different financial situations where mine was very much scarcity mindset. His was abundance.
And so that was it was a struggle sometimes emotionally where you see people that I don't want to say get everything handed to them, because that's certainly not what's going on.
But it can feel that way when you are legitimately likes Klein every little inch and you just trying to make your own path. It can sometimes feel that way when you see your significant other going through that step, too. So that was it was a challenge. When I was paying off debt, I did I got really frustrated sometimes and I felt like that's not fair. But even if it's not fair. That's the cards I was dealt and I had to deal with it. So it was a little frustrating sometimes for sure.
System to Pay Off Debt Faster
Elle Martinez: Ready to tackle this ambitious goal? Whitney created a process to help make sure she followed through.
Whitney Hansen: So for me, the process was cut my expenses down to pretty much zero. Only the bare minimum and truly only the bare minimum. That means even grocery shopping.
It was simply what I had on my list. What do I need to get me through the next week or two? And so that's kind of the process that I used was just the bare minimum, truly.
Elle Martinez: And there were some tough choices she had to make.
Whitney Hansen: Everything else was gone. No Starbucks, no eating now, nothing at all. No road trips.
So I could go, no extra money for gas. It was just very, very bare-bones. And so that was a process that I used.
One of the cool things about working two jobs that I think is very helpful is you can actually separate your finances, your income a little bit easier because you clearly have two different paychecks.
When you have the two different paychecks, I don't know why, but psychologically, it's just easier to say I don't have this check. I'm only going to live on this one.
And so I continued to live on my salon income, which was what got me through undergrad.
So I continued living on that because I knew I could already survive on barely anything. And then all of my accounting paychecks immediately went to my debt. So I was paid once a month.
The accounting firm and I would just immediately take that check. I would put it on my debt and just move on. And so that was the process.
I also knew there was that six month grace period with federal loans that I had this little tiny window of opportunity to make a bigger bang for my buck.
And so that's what I started to do was how do I make the biggest bang for my buck in six months? And that's essentially what I would do, is roll my accounting check to the debt live on absolutely. Pretty much zero.
And then I also sold all of my furniture from my house, which was such a heartbreaking moment for me.
I know that sounds kind of lame, but that's I was so excited to have all my own furniture and just make my interior design and all of that fun stuff.
So I was really stoked about that. But that was a big chunk of money, too, that went to the debt that I saw immediately.
It was like fifteen hundred dollars. I saw that drop down by. And that was enough of a good kick start that I was like, OK, I can do this. And so I just kept going from there.
Reframing How You Think About Money
Elle Martinez: Now that she's on the other side, Whitney is happy, she's debt free and she realizes how important it is to look at purchases beyond the price tag.
Whitney Hansen: Yeah. The first step to paying off debt would be to start to reframe your purchases into a way that makes sense for you. So instead of immediately going and saying I'm going to buy this shirt for 50 dollars or whatever a shirt costs these days, instead of doing that, reframe it into how many hours do I have to work to pay this off. And so I think if you can train your brain to start thinking that way, that for one thing, prevents a lot of debt. And then the second thing is it starts to help you realize that your debts a bigger deal than you think it is sometimes. And so if you start to put in how many hours of my life do I have to give up in order to pay for this or get rid of this, you start to appreciate your finances a little bit more and it starts to help you make better decisions naturally. So that's where I would start.
Elle Martinez: Funny thing is, when I asked Whitney about her financial independent life that she was working towards, she told me it was pretty close to what she's doing now.
Whitney Hansen: I'm actually doing the exact same stuff I'm doing today, which is helping people with their money and helping them become better and more equipped to handle all of life's mishaps. That's what I'm really passionate about. That's what I really like. But I think I would also be writing books and I'm not doing that currently. But I would definitely include that into my future plan.
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This episode was originally released on August 2017. The show notes have been updated on January 2022.