Tackling debt

Say goodbye to your debt and hello to saving

3 min read

Hailey Masterson

Meet Hailey. A 25-year-old Kingston-born, Ottawa-schooled Torontonian and avid book lover. Read her debt story below!

How much debt were you in?

My debt was just over $21,000

How did you pay off your debt?

I paid it off by making a budget! Truly. I paid over the minimum monthly payment, and any free money I got (graduation awards, birthday gifts, Christmas) went towards it too. I didn’t want my savings account to suffer, though, so I would also try to put money here and so when my savings got to $5,000 I would give $1,000 of that to my loan. Then when that $4,000 became $6,000, I would give $1,000 to my loan, and so on. During the year I paid off my load I worked 6 jobs and lived in a house on St Clair West with 5 other people to make rent cheaper than living downtown.

Pro Tip: Check out KOHO's ultimate budget template at the bottom of this article.

What was the hardest thing about paying off $21,000 in a year?

Definitely the sacrifices I made. But they're also what helped me be determined enough to pay it off so quickly. I was bummed my apartment was so north and (seemingly) far, but I was also like: just think - when my loan is paid off I can get my own one-bedroom! I also didn’t know anyone when I initially moved to Toronto so my social life was scarce, so this really helped me stay on budget. Looking back on my sacrifices, though, I think I may have been a little too intense.

"I paid over the minimum monthly payment, and any free money I got (graduation awards, birthday gifts, Christmas) went towards it too."

What did you have to cut back on?

I cut back on going out a ton. I took up reading (always borrowing books from the Toronto Public Library) and volunteering at theatres for free tickets instead. I bought the most basic groceries that would last a while - soups, pasta, quinoa, frozen veggies, etc. I almost never went out to dinner - my boyfriend and I used to fight about money a lot and ended up breaking up because he always wanted to go to restaurants while I wanted to cook. He called me cheap and I called myself determined.

What did you splurge on?

I splurged on a pair of Blundstones! I had wanted them for maybe 3 years at that point? Since Toronto winters were so much more mild than Ottawa I was thought 'Nice: I don’t need winter boots anymore. Here I am baby!'

What's the most helpful tip you could give someone in a similar debt situation?

Write down your goals and visualize achieving them! Make a budget. Or even if the thought of a budget is daunting, just for a month write down every dollar you spend. Doing that will make you better aware of the bigger picture of where your money is going and how it can better benefit you, which can help you to make a budget in the future. I would also say: don’t sweat. I like feel I was so determined to rid my debt as fast as possible, but looking back, there’s a lot of things I turned down because it would save me money to stay home or would help me make money if I worked a shift instead. Do I remember what I did those extra shifts or what I watched on Netflix those nights? No. Would I have had better memories with my friends and experienced more life if I’d gotten out of my apartment/job? Definitely.

Do you think it was worth it to pay off your debt so quickly?

Yes and no. I think I missed out on building a Toronto life for myself sooner because I was so focused on “I can do that after” but it’s like...what about now? I think the fear of bad debt was instilled in me at a young age, but everyone is going to be paying down something or be in some sort of debt in their lifetime, so you shouldn’t use that fear as your main motivation.

A friend’s dad once told me ‘You can’t leave this world with your money, so you may as well spend it while you’re here.’ So it’s all about balance! Pay off your debt for your future self as best you can, but also don’t neglect your current self and your current wants/needs!

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