The pursuit of the American dream has been a part of my story since the beginning. Without the courage of my family, I wouldn’t be here. I sacrificed my mother to keep me in America so that I could take advantage of every opportunity available.
As a first-generation Haitian American, education has always been seen as a gateway to a better future. So I did what many Haitian families tell their children to do: go to school, get good grades, go to college so you can make good money and retire one day in a better financial position.
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At any time when I was in high school, there was any conversation about the cost of college, how to plan for it, or the implications of borrowing money. Nobody told me that the amount I would pay would be more than the amount I borrowed. It turns out that the road to success that was laid out for me led to a six-figure of student debt.
When my wife and I got married in the summer of 2017, we said “I do” with a debt of $211,000 between us. From student loans to credit card debt, to a personal loan, we’ve got it all covered. We had no idea how we would pay off or how long it would take us, we knew we couldn’t stay there.
In two and a half years, we’ve paid off $224,000 in debt ($211,000 plus $13,000 in interest), with none of us getting six-figure salaries. We are now focused on building generational wealth, transforming our family’s legacy, and working towards becoming millionaires. Here’s how we got started.
We got to the same page about our finances early
When my wife and I first met, I had already been in business for a few years and was well aware of my student loan obligations. On the other hand, she was pursuing a master’s degree in nursing and had no idea what she owed. One day when we were talking about our finances, I recommended her to research it and write everything down. When she saw the total amount she owed the first time, she was shocked.
Our conversations led her to apply for a scholarship that paid for her master’s program, a program that would have added another $80,000 to her school debt.
We didn’t just talk about numbers. We learned that quarreling over money was one of the main reasons for divorce, so we were deliberate even before the marriage contract. We made sure to talk at length about our financial values and how our approach to money has been shaped. Those conversations weren’t always easy but they were definitely an essential part of building a strong foundation.
We Found Why We Pursue Financial Freedom
When we looked at how much we owed, we were stunned. We decided not to start with the numbers, but rather why we wanted to pursue financial freedom. One of our biggest reasons was to make sure that one day, our kids wouldn’t have to get rid of their six-figure student debt like we did.
Another part of “why” was my mom. She has been fully supportive of herself since my father passed away when I was seven years old. She told me once that she didn’t think she would be able to retire, and that stayed with me.
My wife and I would have liked to travel more and become voluntary in our forties so we could spend more time with our loved ones and not hold on to a 9-5 job until traditional retirement.
“Why” was the driving force behind the change we wanted to make. It has been our primary source of motivation and a reference point whenever we feel like giving up or breaking our budget during our debt-free journey. By starting with the end in mind, we were able to reverse-engineer and see exactly what we had to do to get there.
We collected our finances and got a zero budget
When we got married, our philosophy in terms of our finances was to bring all the income we earned to the table, and to decide together as a team how best to use it.
We budget our money with zero budgeting, a method of budgeting where you give every dollar a purpose so you know where 100% of your income is going. The difference between a traditional budget and a zero-based budget is that a traditional budget allows you to move the remaining funds to the next month. The zero budget forced us to allocate this money to specific goals such as making additional debt payments.
The budget allowed us to see how quickly we could reach our goals and whether or not we needed to make any adjustments.
With minimum student loan payments of over $2,000 per month, it would have taken us 15 years to pay off our debts and cost us $125,000 in interest alone. Determined not to build someone else’s fortune, in the summer of 2017, we decided to make some drastic changes.
We reduced our expenses and increased our income with side business
In order to find more money to pay off our debts quickly, we started by focusing on what I like to call the “Big Three” – housing, food, and transportation.
We have kept our housing expenses below 25% of our monthly wage. We didn’t have any debt on cars, and we got to work to cut our expenses. We pack lunches for work every day and cook dinner at home 90% of the time. All of these were small actions that ended up saving thousands of dollars each year.
After cutting back on our spending as much as possible, we turned our focus and attention toward the income side of the equation. Between us, we had five jobs: our primary and three side jobs. My wife’s side business included babysitting and providing overnight newborn care. I got a day job in my current profession as an occupational therapist at the local hospital.
If there was a shift available — overnight, weekends, and holidays — we signed up for it. With time, our work began to bear fruit. During the first year of our debt-free journey, we generated $66,000 in pre-tax side income. In the second year we made $40,000. This was a big part of how we were able to accelerate our debt repayment goals.
What We Are Allowed To Do After You Are Debt Free
We became debt free, out of mortgage, in November 2019. My wife and I work in healthcare. When the pandemic hit, despite dealing with some reduced working hours and the uncertainty that came as a result of a global health crisis, we were able to save and invest $127,000 in 2020.
For the first time ever, we were able to create a six-month emergency fund and maximize all tax benefit accounts including 401(k)s, Roth IRAs, and a Health Savings Account (HSA). We have also started investing for our son’s future in the 529 plan. We are now on our way to doing the same in 2021.
We just closed our first rental property and have a plan to help my mother retire in the next three to five years. All of this was only possible because we no longer make regular payments to Sallie Mae and the Great Lakes.
Being out of debt was one of the best decisions we’ve ever made. We no longer suffer from the stress and anxiety that once burdened us. On top of that, it opened doors to opportunities far beyond our wildest dreams.
Now, at the rate we’re going, we’re on track to become millionaires this decade, and we’ve used our experience to help others get out of debt, through our Freedom Is A Choice Movement financial platform and our The Debt Slayers Bootcamp. I truly believe that the life you live tomorrow will be based on the choices you make today. My wife and I often say, “There is so much that is possible when you are debt free,” and we are living proof.
Leo Jean-Louis is a first-generation Haitian American financial writer and educator. After his post about paying $104,000 in debt in 12 months went viral on social media, he and his wife founded the company. Freedom is a movement of choice, their signature cycle, Debt Killers Training Camp, to teach millennials how to become debt-free without being miserable in the process. His financial advice and personal financial journey has been featured in Business Insider, Yahoo Finance, “The Steve Harvey Show,” Black Enterprise, and Bankrate.
Article “We paid off $224,000 in 2.5 years and are on track to becoming millionaires: Here’s how we got startedOriginally Posted in Grow (CNBC + Acorns).