Couple sheds $162K in debt with snowball method
Imagine the feeling, the weight lifted off your shoulders, the ability to exhale, as you finally pay off your debt. All those student loans, that credit card you racked-up, that car loan, all of it gone.
Elijah Bankole and Heron Abegaze know that feeling. It came into their lives March 10, 2018.
“Yes! We are done! We are done!” says Elijah into the camera as he films the couple’s final payment for their YouTube channel. Elijah and Heron had good reason to celebrate. They paid off a lot of money in a fairly short amount of time and learned some good financial lessons along the way.
“Total, after interest, we paid off a little less than $162,000 in a total of three years and 10 months,” says Elijah.
Most of us can relate, if not quite to that level. Debt, especially the student loan kind, is so common, yet so few people are willing to talk about it. Elijah and Heron decided to document their debt-free journey to share with others what they were learning.
“So, we are a two-income household. We both have professional jobs and we, from the beginning, chose to live off his income and put all of my income toward debts," shared Heron. "We literally lived on the basics, that was it.”
She went online and typed in “how to pay off student loans” and discovered money-man Dave Ramsey and his snowball method of paying down debt.
“Pay off the smallest balance and whatever minimum payment you were making toward that balance, once it’s done, that snowball becomes bigger because you take that minimum payment to your next smallest balance,” explains Elijah. “It truly did work, because we felt encouraged when we’d see that balance disappear, we attacked the next balance with that snowball.”
Okay, but not everyone has a two-professional-income-household. Can everyone really do this? Heron believes it’s possible.
“When I was overwhelmed and researching, we came across a lot of different people making different types of income and one of the things that inspired me was that people that made less money than us were able to do this and accomplish even bigger loans,” she says.
What’s the secret? Elijah and Heron started tracking exactly what their spending habits were and where they could cut back. For her it was coffee and for him, clothes. They both got side jobs and didn’t go out with friends often. In fact, they didn’t go out with 'each other' often. The couple found plenty of free things to do to entertain themselves.
Elijah even sold his car.
“I went to my mom’s garage, saw my brother’s old Hyundai Sonata sitting there. I offered him a thousand dollars and he said, “great!” I said, “beautiful!” I still drive that car and I’m very proud of that car,” he says.
In other words, it took sacrifice.
“It didn’t feel like a sacrifice at a certain point," Heron recalls. "After six months, it just felt like, you know what, I never needed that stuff.”
“I think to be successful you don’t need to fully deprive yourself of everything. I just think you need to prioritize and understand where your money is going,” says Elijah.
Speaking of priorities, during the time they were wiping out their personal debt Elijah and Heron got married and paid for their wedding, a three-day affair. “We had a Nigerian wedding for Friday, an American wedding on Saturday and an Ethiopian wedding on Sunday,” Heron tells us.
Planning a wedding can be stressful enough. Add slim finances to the mix and that’s a recipe for a fight. So, we asked, did the couple ever butt heads?
“It was a little lonely. We had to spend a lot of time together,” laughs Heron. “I say that like it’s a bad thing. It was like a team mentality. We were at the same goal and I think it was really important that it was a shared goal instead of me coming and saying we’re going to do this and this is the only way we’re going to do it.”
They went from 'going' to do it, to done. Now Heron and Elijah hope their story will inspire others to live debt-free.
“Knowing now that money, we get to do whatever we want with it, is a huge, huge relief and it definitely feels good,” says Elijah.
Want to hear more from this Minnesota Couple? You can follow them on YouTube at Unconventional Millennials.