Debt Mindset Series: Embracing the Journey

Debt can be a dream killer for sure, but I love Melisa’s determination and perseverance to get rid of hers for good and embrace the journey. Melisa has overcome dealing with the complex structure of foreign student loans and expenses like getting a mortgage and having to support her family members financially all while continuing to crush her debt. Her story is inspirational for anyone struggling to get out of debt or dealing with similar circumstances.

Melisa Boutin runs the website Your Money Worth , where sheprovides personal finance resources for Caribbean Millennials. She is passionate about helping Millennials in the Caribbean and the U.S.
diaspora do better with their money especially when it comes to tackling student loans.

In December 2015, she paid off her private U.S. and international Caribbean student loans and has since focused on assisting other borrowers with analyzing their student loan account statements, navigate the repayment process and develop plans to effectively pay off student loan debt.

Describe your debt situation

Most of my debt consisted of student loans that I accumulated in college. As a recent immigrant from the Caribbean to the U.S.,lead I had a
difficult time navigating the financial aid system.

I vividly remember the day I was notified that the grants and tuition discounts I was awarded would now go away and I would have to make up the difference. Student loans seemed like my only option, which lead me to take out thousands of dollars of student loan debt to fill that gap.

By the time I graduated college and graduate school, I had accumulated $68,000 in mostly student loan debt. Five years after getting my first full-time job, I paid off debt to the tune of $37,000, including all my private student loans.

After paying off those debts, I did rack up about $3,000 in credit card debt that I paid off in 2016 and stopped using credit cards altogether. Right now the debt I have remaining outside of my mortgage is $28,439 in Federal student loans that I am aiming to pay off by 2019.

When did you decide your debt was a problem? Did you have an ‘aha moment’ and what triggered it?

By the time I finished my first year of undergrad, I knew I would be on track to have $100,000 in student loan debt. For my second year, I cut costs by getting cheaper housing off-campus, commuting on the public bus system in Miami and working two jobs on campus, while taking a full-time course load.

I then applied and won multiple scholarships, transferred to a cheaper state university and reduced my college costs even more. But I still ended up with $58,000 in student loan debt when I graduated from college and added another $10,000 after graduate school.

Did you implement a specific strategy to start paying off your debt? Why did you use that strategy?

The first strategy I used was to start making payments on my international private student loan from a Caribbean bank while in graduate school. This helped me to save on interest that would have accrued, at an annual rate of 9%, if I deferred that loan.

When I completed graduate school, I ended up accumulating about $3,000 in credit card debt while looking for full-time employment for 8 months. Once I got a full-time job, I used a mixture of the avalanche, snowball and snowflake debt payoff methods.

I focused on paying off my credit card debt first, that had the highest interest rate while sprinkling extra payments on my student loans at the same time. After paying off my credit cards, I increased my extra payments on my smaller student loan balances. When those were paid off, I focused on making extra payments on my Caribbean student loan that had the highest interest rate of all remaining student loans.

Using these different approaches, I was able to pay off about $13,000 in credit card and student loan debt after one year of working
full-time and after 5 years I paid off $37,000 of debt total.

Related: Creating a Student Loan Plan of Attack

What were some obstacles you were/are faced with? How did you deal with the days when you lost motivation or slid back into your ‘old
ways’?

While in graduate school, I was a surrogate parent to my youngest brother. He lived with me and attended high school, while I was attending graduate school in Philadelphia. I had to balance the responsibility of financially supporting him while I paid my student loans.

Once, I completed graduate school and got my first full-time professional job, my parents relocated from St. Kitts and Nevis, where I grew up, to Philadelphia and I had to provide financial support to them while they settled in to the United States and looked for full-time employment. I helped to cover their housing and utilities, while I was living in another state and trying to pay down my debt and
invest for my future.

I also experienced a significant decrease in income during that 5-year debt payoff period when I was on maternity leave.

Those were some major challenges, for sure.

What motivates you? What would you say to people who think they can’t get out of debt in an attempt to change their mindset?

My biggest motivator is to be able live my life without debt and to realize that type of freedom. I know how it feels to have a large amount of debt hanging over my head and I want to know how it feels to not have massive student loan debt.

I would encourage anyone, who feels that their debt is insurmountable, to envision their life without the debt and imagine what it would look, what options it would give them and how it would feel. Take that vision and use it to motivate yourself to get started on your debt free journey and don’t stop until you get there. Even when setbacks happen.

Learn More About Melisa

You can connect with Melisa and learn more about her work by heading over to her website, Your Money Worth, and signing up for her Money Massive newsletter where she shares tips, tools, and resources to get out of debt so you can live the life you envision.

Instagram: @melisaboutin
Facebook: @boutinmelisa