If you’re anything like me, you got into debt because you were trying to become a better version of yourself. 

My story starts with humble beginnings. Both of my biological parents were unsuitable to raise me due to drug addiction and I was immediately placed into foster care at birth. After going through the foster care system for more than a decade, I was adopted by a family in a small town in Pennsylvania.

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I excelled in high school, and when my parents couldn’t afford to pay for college, I decided to put myself through school during the height of the 2008 financial crisis. In college, I often used credit cards and worked odd jobs to feed myself and pay for small expenses. Many of my college days were spent in the student aid office trying to earn grants and scholarships so I could pay my tuition bill. 

After four years, I earned a degree in business economics and accomplished my life’s dream of being a college graduate. But that diploma came with $50,000 of student loan debt. And that, combined with $10,000 of high interest credit card debt, $20,000 of car loan debt, and a $50,000 a year salary, meant that I soon found myself over-leveraged and under compensated.

For the first few years of my career, I was a financial professional at an investment firm, but I was still living paycheck to paycheck. My loans were keeping me from accomplishing big goals, like traveling, investing, and buying a home. There were even times when I felt like I had been better off as a broke college student, because at least then I didn’t have to pay back my debts. That’s when I knew that things had to change. 

Today, I am debt-free and run a platform called BetterWallet to help other people take control of their finances and build wealth.

I paid off $80,000 in three years, and it all began by figuring out how to stop living paycheck-to-paycheck and getting a better understanding of my financial situation.

Sick of the paycheck-to-paycheck life, one day I googled “how to stop living paycheck to paycheck” and naturally “budgeting” was the first result. 

The word “budgeting” always made me cringe. Growing up in a low-income household, the word was normally followed by something less than desirable like, “We are on a budget so we need to buy the lower-cost cereal,” or, “We are on a budget so you can’t go to the movies tonight.”

At the time, my thinking was that I was a college graduate and there was no way I was going to “be on a budget” again. I worked too hard to go back to that. 

After not getting the exact answer I wished for through my basic Google search, I continued my same behaviors and continued to get the same results. 

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I would have a fun weekend, notice overdraft alerts or fees on Monday, have barely enough money to eat Tuesday through Thursday, and then wait until my bi-weekly paycheck arrived in my bank account at 12:01 a.m. on Friday to start the process all over again. 

One day during the summer of 2017, a light bulb went off and I realized that while I was paying my bills on a bi-weekly basis, I wasn’t accounting for variable expenses like my weekend outings. 

I opened my work laptop, pulled up an Excel document and started making a comprehensive list of my bills and projected variable expenses. That is when I saw that I was regularly spending more than I was making in a given two-week period. 

I knew that I had to work through my aversion to budgeting if I was going to start creating better habits. 

To do that, I started breaking it down piece by piece. I realized that my budget needed to have four distinct sections to paint a full picture of my financial situation.

1. Income: How much money I was bringing in
2. Fixed expenses: Expenses where I knew the exact amount I needed to pay and when I needed to pay it (for example, rent that’s due at the beginning of the month)
3. Variable expenses: Expenses where I didn’t know the exact amount and exact date when it would come out of my account (for example, going out to brunch with friends, clothes and shoes, buying the odd coffee)
4. Discretionary income: Income left over after I paid all my fixed and variable expenses

Many people often forget about variable expenses, which can lead to zero balances and overdrafts. Once I was able to account for all my money, I wanted to take a hard look at all my expenses to see where I could cut back so I could use that money towards my debt. 

I noticed that I overspent on going out, buying clothes, my apartment, haircuts, and car insurance. To control how much money went to many of those items, I created a category in my budget called “fun money.” 

Each month, I would withdraw $300 for “fun money,” put it in a dedicated, labeled cash envelope, and hold myself to only spending what I had allotted for the month. This system helped me to spend with intention and without regret. 

To negotiate my car insurance down to a lower rate, I told my insurance company that I was considering using another insurance company because of the price. It’s funny how companies mysteriously find discounts when they realize you’re about to leave.

I also decided to move into a three-bedroom house with a few friends. This drastically cut down my housing costs, which is often the largest monthly expense for many people. I used what I saved to pay down debt. 

Now, it was time to put this extra cash towards my loans. In my research, I found that there were a number of different debt payoff methods. 

The debt avalanche method involves making minimum payments on all debt, and then using any remaining money to pay off the debt with the highest interest rate. The debt snowball method lets you make minimum payments on all your debt but instead of paying the debt with the highest interest rate, you instead pay off the smallest debts first to get them out of the way before moving on to bigger ones.

The avalanche method can often result in lower payments over time. And the snowball method can be valuable if you’re looking for small, quick wins as you are beginning your debt-free journey. 

Alternatively, you can choose to do both or what some call the hybrid method, which is what I did. I started with the debt avalanche method and switched to the debt snowball method when I felt like I needed more motivation.

Another way I created a wider gap between my income and total expenses was making a career change. I decided to switch to a sales job where I was personally more in control of my total income. 

With my budget in place, I aggressively paid off my credit cards at the beginning of 2017, paid off my car at the end of 2017, and paid off my student loans in July of 2020. 

In 2019, I also started documenting my entire journey on my Instagram page, BetterWallet. Now I use the platform to teach others good money habits so they can reach their version of financial freedom. 

To me, financial freedom means being able to travel the world without concern, buying real estate, investing, and passing down wealth to my family. Ultimately, while my debt-free journey may have been one of the hardest experiences of my life, it was also one of the most rewarding.  

Marc Russell is a foster child turned financial educator. Coming from a low-income family, he put himself through college and paid off $80,000 in debt after graduating. Marc spent much of his career at two of the largest financial institutions in the world where he consulted thousands of households on how to manage their money: the right way. Now, the owner and founder of BetterWallet, LLC, Marc teaches people all around the world how to make money work for them.

The article “I Paid Off $80,000 in 3 Years and Became Debt-Free: Here’s How I Got Started” originally published on on Grow (CNBC + Acorns).