How I Paid Off $245,000 in Debt in 7 Years

by Jul 9, 2020Debt

Shelby Agnew, a small animal relief vet in North Alabama, graduated from Auburn in 2013.

She decided to share her success story with Vet Financial Summit readers to show that eliminating your debt is perfectly possible. It does take discipline and a strict plan of action.

Structure and help

“I want to be very upfront about the fact that we did have a lot of help early on. So let’s go over that, then I’ll explain how we dealt with the rest of the debt, which was real.

My husband and I did get help from our parents during undergrad and college. Our parents were middle class, so the help was not in the form of a giant gift, but the end result of yearly savings in a dedicated college fund.

There were a few other factors I want to be clear about:

  • We had help buying used cars during our teenage years
  • We had stable home lives, a solid early childhood education, and a “knack” for standardized tests.
  • Excellent grades helped us get several scholarships.
  • We received financial gifts from family members.
  • We had opportunities to earn college credit during high school years.
  • I had a smart partner with a good job.

Despite all of that, we still ended up with 245K in debt, which we tackled by ourselves. It consisted of 80K in student debt and 165K in a mortgage.

Here are some tips and strategies we used to eliminate our debt.”

During Vet School

  • The cost of credit

“I understood early on that everything I buy with credit will eventually cost more because of interest. To simplify, I assumed the actual price of any item would be 1.5 higher than what the sticker stated.

So I multiplied the price of anything I wanted to buy by 1.5 to decide if I truly needed it. That simple strategy prevented me from making frivolous purchases.”

  • Resist peer pressure

“Don’t worry about what your classmates do. Some are paying with their parents’ credit card. Some know they will never be able to repay their loans. So don’t compare yourself to them if they routinely go out to eat or hang out at the bar.

Instead, you may want to hang out with classmates who live frugally to help you resist peer pressure.”

  • Creative fun

“There are countless ways to enjoy vet school on the cheap. You can swap off making dinner for each other. Go camping. Enjoy hiking. Explore the activities your student fees provide on campus.”

  • Meal planning

“It’s perfectly possible to cook healthy and cheap. You can do a lot with rice, eggs, beans, frozen vegetables and on-sale chicken breast. Meal planning and meal prepping are lifelong skills that save you money in the short-term and long-term. An added bonus is that they help you stay healthy since it’s less conducive to ordering because your fridge is empty. But let’s be honest: as you learn these new skills, you are going to fail, forget, or be fried. So buy some frozen pizzas and dinners, they are still cheaper than fast-food.”

  • Be stingy with books

“You honestly don’t need to buy all the books your teachers recommend, especially brand new. Instead, you can buy used, borrow from upperclassmen, share with a classmate, or use the library copy. This is especially true in your freshman year, because you will likely never use those books later on. For example, I’ve never needed my physiology textbook as a vet. If I have an anatomy question, I can almost always find a diagram online.”

After Vet School

“The idea is that if you have a ton of debt, you are effectively poor, so don’t live like a movie star.

  • Lifestyle creep

“After vet school, you have to learn a new concept called lifestyle creep – and fight it.

You’re (hopefully) going to suddenly earn a nice income. In my opinion, the wrong thing to do is to splurge and think “I’ve studied hard, I’ve lived like a pauper, now I’m going to live the good life. I deserve it.”

So some colleagues buy a new car, the latest iPhone, new clothes, a new house, new furniture – mostly on credit of course. What would have been considered luxuries before, suddenly becomes necessities. That’s called lifestyle creep. It will only increase your debt burden and your pain.

Instead, I chose to remain frugal. As the saying goes, I continued to “live like a student” for a few more years.”

  • Live within your means

“In spite of what I just said, we did decide to buy a house, but one we could afford. We chose a price tag and mortgage that ONE of our jobs could pay, should we have an unexpected layoff.”

Shelby and her husband closed on their house in 2014

“What most people do is that they ask a bank for a loan preapproval. It’s sort of a tradition. Realtors push you to do that. In reality, all this document says is how big a loan you could get based on today’s income.

Instead, we knew how much we wanted to spend. It was about 40% of what a bank would have given us. So we went house hunting within that budget in mind, in order to keep our cost of housing manageable.”

  • Budget and check-ins

“We all know that we should follow a budget. Yet not enough people do it.

We took it one step further by having a monthly check-in.

I did this by myself when I was single. After I got married, we continued to do it.

During a monthly check-in, we go over what our spending was in the previous month, we pay the bills, and we discuss and adjust the plan.

If our spending seems out of whack, we find out the reason. Did we buy something frivolous? Did we stock up on something on sale we will need anyway?

Each month, we also decide what to do with leftover money. We would then decide together how to allocate it: to the student loans, or the mortgage, or a charity, or a savings account for a future purchase, or sometimes a little extra “spending money” for the next month.

We love our monthly check-ins because it would sometimes show us that we spent too much “fun money”, so it would remind us to readjust our spending in the next month.”

  • Retirement

“In spite of debt repayment, we still built up our retirement accounts. I did a small amount of loan deferment in order to max out our retirement accounts. Save early for retirement. The more you do now, the less you need later.”

  • Postponing purchases

“Remember the cars we got as teenagers? We still drive them! So yes, we drive 20-year old cars. We also live in a house with ugly wallpaper. My husband repaired the 20 year old oven himself. We have a weird closet layout.

But we tolerated that because we were so driven to pay off our loans first.

When something has to be fixed or replaced, first we save up until we can afford it, so we wouldn’t increase our debt load.”

One the other side of debt

“We paid off our debt in June 2020. We knew it was coming, so it wasn’t exactly a big surprise.

But it was a huge feeling of security. We especially enjoy the feeling that we truly own your house and we are not at the mercy of a bank.

We haven’t had time to celebrate yet, but we did share the big news with our entire family. Now we want to help others with their financial security. I am getting involved in local politics to hopefully make a difference.

Now that we’re debt-free, we continue to live reasonably. We still cook at home. We still enjoy creative fun.

Lifestyle creep has come in the form of slightly more expensive vacations and more charitable donations.

Freedom from debt has given us the opportunity to say “no” to jobs we don’t want to do, and “yes” to new opportunities that may carry a bit of financial risk.

The money we had allocated to our mortgage can now turn into additional savings and investments. Our short-term goals include a long-desired bathroom remodel, earlier retirement, and enjoying financial freedom.”

Thank you Shelby for sharing your story!

Phil Zeltzman, DVM, DACVS
Meredith Jones, DVM
Co-Founders of Veterinary Financial Summit

Are you ready to conquer your financial future? Be sure to join us in September for the VFS Virtual Conference. At the conclusion of the event, not only will you have a better understanding of your financial future, you will also have created your financial plan, and become part of a Community of like-minded Veterinarians supporting one another throughout the year.