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He and his wife "took action" after receiving a year-end tax document.

After Chris, from Apathy Ends, graduated with an MBA in 2011, he and his wife started living a “normal American life.” They incurred $85,000 in student loan debt, moved into a house they could barely afford, and weren’t saving much money.

In 2012, he received a year-end student loan tax document. It literally freaked him out. Chris says, “I paid over $5,000 in interest on my student loans in 2012 and it opened my eyes to the evils of debt.”

He and his wife took action. Here’s the rundown he provided me:

  • When his wife started working full-time in 2013, he increased the principal payments
  • His salary increase in 2013, and occasional bonuses or tax refunds, went towards student loan repayment
  • He refinanced his student loans in 2015 at a new rate of 4.065 percent, down from over 6 percent. This allowed him to make similar payments but cut two years off his repayment schedule

Over the years, Chris and his wife also beefed up their savings. It stands at $90,000 now. He told me salary increases helped them save that much. But something else contributed — they didn’t inflate their lifestyle as their salaries grew.

For example, in 2015, they moved into their second home. Chris says, “We actually built our second home, but spent way under what the bank would have let us spend. This allowed us to save thousands of dollars every year.”

They also use public transportation, which saves them $3,500 a year. As for their vehicles, no BMW or Audi for this financially mindful couple. “We bought a new car in 2014,” says Chris. “But it wasn’t extravagant (Honda CRV), and our second car is a 2001 Accord — not something you normally see from a family with a $150,000 yearly income.”

Although Chris and his wife remain frugal, they do enjoy certain pleasures. “From the outside, it appears like we’re making sacrifices in terms of ‘stuff,’” says Chris. “But I don’t feel like we sacrifice anything. We spend on what makes us happy: vacations, eating out, our daughter, craft beer — and cut the rest out.”

Taking action

When I first read about Chris, I noticed he believed in “taking action.” I asked him what he meant by that phrase in a financial sense.

“I drop the line ‘Knowledge without action is useless’ on a regular basis,” says Chris. “People read something and think ‘that makes good financial sense and it applies to me’ but don’t take action. For example, unused subscriptions — people pay monthly for something they never use but don’t take a few minutes to cancel it.”

Chris provides some things he acted on:

  • Increased their 401K withholdings by 1 percent each quarter for a year
  • Refinanced student loans and mortgage to get lower interest rates
  • Saved most of their raises for the last four years and mostly invested them

He believes there are two main culprits that prevent many Americans from taking action: lack of financial education and instant gratification.

As for education he says, “Most people don’t understand that the money can double multiple times before they are retirement age if invested properly.” And as far as instant gratification: “Spending money is easy. Combine that with a little bit of desire and the fact that almost anything can show up on your doorstep and boom, money spent.”

I asked Chris for some financial advice. He provided these tips:

  1. Face your current situation: How much debt do you have and what is it costing you? What percentage of your income are you spending/saving? Start tracking your net worth on a regular basis. (This validates that changes are making a positive impact)
  2. Set yearly/incremental goals: Figure out where you want to go and break it up into small attainable goals. I like getting “wins” multiple times a year. It keeps me motivated.
  3. Automate: 90 percent of our financial transactions are automated. If I had to login to all the different accounts every two weeks and initiate transfers it wouldn’t work.

And don’t forget one other thing — take action.

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The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the opinions and/or policies of Debt.com.

About the Author

Brian Bienkowski

Brian Bienkowski

Brian Bienkowski has been writing about personal finance for over 15 years covering debt recovery, fraud, and credit topics. He has worked on several personal finance books and guides that help consumers navigate the US credit system. When he’s away from the keyboard he enjoys craft beer and fishing — and once enjoyed a cold Sweet Water IPA after catching a sailfish.

Published by Debt.com, LLC