Meet Whitney Hansen, a 20-something who has kicked some serious money- and goal-setting butt — including paying off $30,000 in student loans in just 10 months. Here’s her inspiring story.
It starts with some serious hustle
“I graduated from high school in 2006 and didn’t really have the financial support system to get me through college, so I had to figure it out on my own. I moved to Boise (2 hours away) the night of graduation and started cosmetology school the very next day. I did the nail tech portion which was 3 months, so by August 2006, I was licensed, employed and beginning my college career studying Accounting at Boise State University. That mini career allowed me to have a decent income during college and I purchased my first home when I was 19.”
She fell into a pretty typical debt trap by borrowing.
“Fast forward to 2010, I graduated college with $30,000 in student debt. I was embarrassed, shocked and disappointed that I didn’t work a little harder in undergrad.”
But since she’s the definition of grit…
“So I put together a financial plan, worked 70-80 hours a week as a Staff Accountant and Nail Tech, rented out a couple bedrooms in my house, and paid off the entire $30K in 10 months. I truly lived on less than $15,000 a year.
It took a lot of sacrifice like not even seeing the inside of a Starbucks for over 3 months, not eating out, and putting vacations on hold. It was totally worth it to be debt free at 22 and be able to bank up money after that.”
By 22 she was a debt free home-owning college grad.
I love the way Whitney set big goals and made them happen.
She did it the old-fashioned way too: with hard work and focus. I suspect a lot of that comes from her childhood, where she learned the real difference between wants and needs. (She and her mom were once thrilled to find an old mattress in the trash so that they could stop sleeping on the floor.)
Of course, I had to know more about her story. So I shot her a few more questions.
About buying that house…
Why did you decide to buy your first home at 19? How did you go about that?
I bought my first home because the market was down (October 2008), I got a pretty good deal, and had a decent down payment already saved up. I knew I could rent a couple rooms to friends and it even helped me cover my house payment.
On getting into debt:
Why did you decide to borrow to go to college? Was part of that also for cosmetology school?
I really didn’t know there were any other options. As a first generation college student, I thought you either had rich parents that would cover the costs or you just take out student loans. Unfortunately, there was a big disconnect in the school system of educating students on options for paying for school.
Cosmetology school was not part of the $30,000. I made payments on my cosmetology schooling during my freshman year of college and paid that off well before my bachelors degree was completed.
Like so many people, she felt embarrassed by debt.
Why did you feel embarrassed about graduating with debt?
Because I knew I didn’t give it my all. Once I saw that student loan bill, it was a reminder that I could have (should have) been money aside to pay for school instead of buying coffee, clothes, traveling, or eating out. I was embarrassed that I let the student loan rack up to $30,000 without paying much attention.
But she did something about it. (You can too!)
Many people have no idea how to put together a financial plan. What were some of the most important parts of yours?
To me a financial plan consists of 3 main areas: budgeting, planning for the future, and making your money work towards your goals.
The most basic level of a financial plan is a budget. I always start with a budget based on my previous habits. Getting clear of what I am actually spending is key.
I do this through one of my favorite exercises in the world: the bank statement exercise. Print off your bank statement for the past 30 days, grab a few different colored highlighters, and start grouping things together to see how much money you’re actually spending. The act of physically writing and highlighting is powerful!
In other words…
A financial plan is easy once you start writing down your goals, getting clear on your expenses and finding creative ways to play with the numbers to help you get to your financial goal.
(I totally agree. It’s all about paying attention, getting clear, and getting creative with ways to earn extra money and reduce expenses. If you’d like a free budgeting printable I’ve got one for you here.)
Keep your eye on the prize.
One way Whitney increased income (and essentially reduced expenses) was by renting out rooms. If you have extra space in your house you could do something similar. I had a roommate for a while too when I was a single mom and it definitely helped.
As Whitney says, “Renting a room to someone is a great way to increase your income and share costs of utilities. You can easily rent a room for $200-$300 + splitting utilities and get a great chunk of income on the side. The downside is you can’t walk around in your underwear anymore….”
And now for the million-dollar question:
How is your life different now that you’re debt free?
I would be lying if I said life since being debt free is stress-free, because it’s not. But, I can say that the financial issues I stress about now are much different than they used to be. With debt I was worried that if I lost my job I wouldn’t be able to pay my bills. I would be stressed out if I went shopping, because I knew I should be paying on debt. My financial stressors are very different.
Now my stressors now are things like, how much money should I put into marketing the business this month, should I invest in this training course, when can I buy a new car, or what if I cut back and invest $200 per month more?
Once I broke the paycheck to paycheck cycle and stopped living to pay for debt, the things I can do with money became a lot more exciting.
So true! If you’d like to read more about Whitney’s story, she goes into it in more detail right here. Meanwhile, I’ve got a question for you: What will YOU be able to do differently once you’re debt free?