Debt is bondage and it requires hard work and dedication to break free. There are some who have gone through the same situation and have been successful in slaying debt – these people are called the DEBTINATORS or DEBT SLAYING NINJAS.
Our guest is none other than “Money Saved is Money Earned”. We met through blogging and the duo has been incredible in terms of helping people improve their finances. This is why we are very excited to interview them on our “get out of debt” series.
Our get out of debt series is to inspire others who are still in debt. After paying off our student loan debt which between Mrs. Breathe Easy and I, was upwards of $200,000. The actual amount paid with interest was close to $300,000. The strategies we used to pay it off was discussed in the article about getting out of student loan bondage.
Table of Contents
Meet our guest
I’m half of the blogging duo at Money Saved is Money Earned. I’m a frugal teacher and Sebastian is a former financial analyst. Our goal is to teach people of all ages how financial systems work, and how to take advantage of these systems to save big money. While we have plenty of tips for increasing your income, our main focus is showing you how to save money on everyday expenditures through the savvy utilization of financial institutions and situations. Any money you save goes straight back into your pocket, turning Money Saved into Money Earned. Teaching Consumerism to Frugalism since March 2018.
Stop by and see us at Money Saved is Money Earned.
What do you do for a living?
I am in my 6th year as an elementary special education teacher. However, I’m not an ordinary teacher.
I work at a treatment facility with children that have severe behavioral problems as a result of experiencing a great deal of trauma in their early lives.
As a result of the trauma and subsequent behavioral issues, my job entails social/emotional coaching, behavior management, as well as academics.
My class is pretty small compared to most (7-9 students), but they typically range in age, grade, and ability depending on which children are in treatment at any given time.
The grade range can be anywhere from 1st to 5th (once I had a 6th grader), and there is a wide range of abilities amongst students in the same grade.
I currently have 7 students ranging from 1st to 4th grade.
Do you have a degree and are you currently using your degree?
Yes, I have a Bachelor’s as well as a Master’s degree, and I’m currently using both.
I received my Honors Bachelor’s in Psychology from Oregon State University and my Master’s in Special Education from Portland State University.
I use my psychology degree working with students with behavioral struggles and mental illness, and I use my special education degree to be eligible for my license as well as to execute the paperwork side of my job.
Interestingly, I feel like I use my psychology knowledge more for daily classroom management than I do my special education knowledge.
How long have you worked in your field and what is your current salary range? Only if you want to, however, it is better to give our readers some perspective. If they are low-income earner vs high-income earner, the strategies might differ.
Although this is only my 6th year teaching, I’m in my 10th year working with children who have experienced trauma.
I started out working for the treatment facility where I now teach and was there for 4 years after completing my Bachelor’s.
I was inspired by the teaching staff I worked with and so I decided to go back to school to get my Master’s and teaching license.
As for my salary, I’d say I’ve made my way through the ranks since graduating from undergrad from lower income to a somewhat higher income. I’ve come a long way in the last 10 years.
The most I ever made while working for the treatment facility was $12.45 an hour, and I started off at $10 an hour because I had some prior experience working with children.
Once I became a teacher I started off at the bottom of the scale at about $35,800 a year.
Once I obtained my Master’s I jumped almost 10k in salary to about $46k a year.
Since then I’ve been dedicating a good deal of time to moving up the pay scale with continuing education classes, which I need anyway to keep my license.
Last spring I was actually able to hit the max in terms of credits, and I also will receive a small step raise every year I teach until year 13.
Between my Master’s and a concerted effort to move up the pay scale with continuing education, I’ve almost doubled my salary and am now at about $67,000 a year.
What major debt have you paid off that you feel is a hurrah moment for you?
I’ve been lucky to not have much debt over the course of my life because I’m very avoidant of it. However, my biggest debt payoff win was with my student loans.
I was extremely fortunate that my parents helped me to pay for college and took on the brunt of the loans. Despite their help and a lot of things that helped keep my debt to a minimum, I still graduated with about $13,500 in debt.
After graduation, I moved back home (so I had minimal expenses), got a job, and immediately began paying off my loans. I believe my minimum payment was around $120 a month, but I regularly made extra principal only payments and consistently paid $300 or $400 a month. With this targeted effort, I was able to pay off my loans in only 2 ½ years.
Overall, the way I’ve minimized debt is to focus on paying it off as soon as possible and not accruing more unless necessary.
I did buy a house a few years ago so I have a mortgage (but I put $200 extra a month toward that), as well as a truck almost 2 years ago (which I will pay off this month), but other than that I have not had any other debt.
Not having debt has allowed me to pay my way through graduate school, save up the money to buy the house, and live a comfortable life while still saving a significant amount of money.
If you’re interested, you can read about how I paid off my debt and was able to reach my goal of buying a house in 6 years here. This article includes all the details of how I kept my student loan debt to a minimum and what I did after college to keep my debt low.
https://www.moneysavedmoneyearned.com/how-i-paid-off-my-debt-and-reached-my-goals-in-just-6-years/
Describe to us in detail, the strategies you used to pay off that/those debt(s)
As I said above, the main thing was to put a concerted effort into paying off debt and not accruing more.
I had a lot of help (living at home, gifted a car, etc.), but I saved almost all my money and used that money to pay off my student loans immediately after college. Once those loans were gone, I turned to save as much as I could. My savings (along with working full-time plus multiple side jobs) allowed me to pay my way through graduate school and buy my house.
In sum, I kept my expenses low, didn’t accrue any more debt, and threw as much money as I could at my debt each month. I was able to pay my loans off quickly that way, as well as save a bunch in interest.
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Do you have any other debt left? What kind of debt? What are your goals to pay off this debt?
I do have some debt. As mentioned, I bought a house and so I do have a mortgage.
However, I’m applying the same strategies that allowed me to pay off my student loans so fast. Those strategies are:
- Making extra payments throughout the year
- Paying $200 extra toward the principle on a monthly basis
I’ve only had my home a little over 3 years and I’ve already saved time and money off my mortgage with this strategy, which you can read more about here: Save time and money off your mortgage.
Aside from my mortgage, I also mentioned earlier that I bought a truck almost 2 years ago.
I had an older Explorer that I used to haul my dogs, and it was finally no longer worth the money to fix.
I bought a 10-year-old truck for $19,500, put $3,000 down, and had an auto loan for 4 years at a little over 2% interest.
Again, I’ve been making extra payments whenever I can, and I will be paying the truck off 2 years ahead of schedule this month. I haven’t calculated how much in interest I’ve saved yet, but I’ll be out from under the loan 2 years ahead of schedule, and plan on dedicating that monthly payment to savings and investing.
Do you budget? Why or why not? Which method do you use?
I do roughly budget, but I don’t budget every penny. I’m fortunate to have enough cash flow that I don’t have to budget every penny, but I do know my main expenses and where my money is going.
Read more about limitations of budgeting here and to see if budgeting is right for you
In terms of allocating money, I like to automate major payments and pay myself first. I have the mortgage automatically set up with the extra $200 a month, and the truck payment comes out automatically as well.
I also have $200 a month going toward a 403(b), and 6% of my yearly salary is automatically deducted for my pension.
With the big-ticket payments and savings automatically deducted, I’m used to those payments happening and I’ve adjusted my spending accordingly.
All my other bills I do manually so I can keep an eye on things. Other than my mortgage and truck payment, I pay everything with credit cards to earn rewards and then pay the cards off every month.
What percentage of your monthly income do you save?
I haven’t actually calculated it, but I’d say I’m currently saving around 40% of my income.
As I mentioned, 6% of my salary is deducted in monthly installments for my pension and I also contribute $200 a month to my 403(b).
I pay my necessary bills with the rest and whatever is left over (usually $500 – $1,000) goes into savings. I recently opened a brokerage account and a separate Roth IRA, so I plan on dedicating more to those accounts in the future.
Learn more about Roth IRA in this article where we discussed how long it takes to reach your first million with Roth IRA only, the answer will surprise you.
Learn everything you need to know about 401k and 403B plans here
Do you have any passive income sources?
I don’t have any active passive income sources other than my pension, but I’m hoping to develop some.
I recently started the 403(b), which will become a source of passive income for retirement. I also just opened a Roth IRA and a brokerage account, which will also begin to bring passive income.
Other than my investments, I’m hoping that the blog I started last year will eventually bring in a nice side income.
Do you rent or own your own home/condo/apartment?
As previously mentioned, I bought my first house a little over 3 years ago. Prior to that, I rented space from my parents.
Which side of the argument are you in terms of paying off mortgage vs investing?
I’m on both sides. I look at debt vs. investing as two sides to the same coin that should be done in conjunction with each other.
I know the numbers may say investing is better because you’ll yield more than you spend in interest on a mortgage, but I also know the psychological effect of debt.
I like to pay extra on my mortgage while also investing. I think as long as you’re doing something (no matter which one it is or both) you’re way ahead of the vast majority of Americans.
There you have it. Another inspiring interview. Take as many lessons from others so you can avoid can fast track your own journey to financial independence.
Other posts in the series include
From one Geek To Another became debt free at a tender age of 27. Phenomenal post, soo good, it also got featured by passive income journal club MD.
Let us know if you have paid off a certain debt and would like to inspire others.
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I am a pulmonary and critical care doctor by day and personal finance blogger/debt slaying ninja by night.
After paying off close to $300,000 in student loan debt in less than 6 months into my real job, I started on a mission to help others achieve the same. There is no magic to this than to strap up and get it done. Some of the ways we achieved this include side hustle, budgeting, great negotiation skills, and geographical arbitrage.
When I was growing up, common knowledge in Nigeria is that there is one thing you cannot trust anyone else with, and you guessed it – your money.
Being frugal came easily to me based on my background. However, the concept of building wealth did not solidify in my mind until when I finished medical school. I wish I knew what I know now when I was 14. Still, I don’t know enough and I am constantly learning to improve my knowledge.
My goal is to reduce financial illiteracy among young professionals. I am catering to the beginners – babies and toddlers in financial literacy.
John Mulindi says
Some really important personal finance tips to pick from this Interview. Thanks for sharing with us.
Yaya says
Fascinating post! Really educational and actually inspiring!