Welcome to Debt Free Journey. This interview series has been developed in collaboration with my friend Steve Cummings from The Frugal Expat.
We are excited to bring you a series in which we explore real-life stories on people working towards or who have already become debt-free.
Interviews will be conducted on an ongoing basis, with new interviews being published bi-weekly on Wednesdays. You can find past and future interviews in the series Main Page.
For this interview, we have Thomas Wood, a police officer from Reno, Nevada. Thomas talks us through his journey to eliminate his student loan debt. Not only he eliminated $45K in student loan debt, but he saved $100K along the way for house downpayment! How did he do that? Read along to find out.
And without further ado, let’s get to the interview. Enjoy!
- Name: Thomas Wood
- Age: 31
- Gender: Male
- Location: Reno, Nevada
- Twitter: @Ficop10
- Debt paid amount: Approximately $45,000
- Debt source: Student Loans, Car Loan, Credit Card
- Time to eliminate debt: Approximately 8 years
About Thomas Wood
Tell us a little bit about yourself
My name is Thomas Wood. I am a 31-year-old single male living in Reno, Nevada. I have been dating my girlfriend now for approximately 5 years.
I am currently a police officer with the Washoe County Sheriff’s Office, where I have been employed for 4 years. Before working for the sheriff’s department, I worked with the Nevada Highway Patrol for 3 years. I have been a police officer for a total of 7 years. After graduating college, I received a job with Fox Television in the marketing and advertising department (I would be the next Don Draper). After working at Fox for about a year, I moved into the insurance industry, creating a Gym/Fitness specific insurance and risk management program.
Living so close to Lake Tahoe, I love to be outside. Hiking, walking, snowboarding, and being at the lake are all things that I love. I also love to work out. This has been a “hobby” of mine since I was in high school. I put “hobby” in quotations because it is more of a way of life for me. In my profession, it is important to stay in top shape. Due to the hours we work, the people we deal with, and the nature of our profession, being in shape will help make you a better police officer.
If people want to connect with you, where can they find you?
People can find me on my Twitter account at @Ficop10. I do not have a website, Instagram, or Facebook page. I try to keep my social media footprint to a minimum due to my line of work.
Introduce us to your debt. Where did it come from? How much was it? How old were you when you first acquired the debt?
I first started to accumulate my student loan debt during my first semester in college. I played baseball at San Francisco State University. I received a baseball scholarship, but due to my family’s financial situation, the only way I could pay for school was through student loans and financial aid. This was in 2008, and the recession had just started. My dad was in the construction industry, and my mom was a teacher. So you can imagine what our finances looked like.
Every year I applied for financial aid, and every year I received the money. I knew that I was going to have to pay the loans back, but the name of the game at that time was to finish school as fast as possible!
After graduating, I bought a used car from a family friend for $15,000. I was able to put $5k down on the car but financed the rest. This is the car that I still have today, by the way.
The remainder of my debt came from credit cards. I did not have a credit card while in college, nor did I get one once I was out of college and started working. How I managed to go that long without a credit card is still beyond me. However, I did finally get one through my bank (Bank of America).
I was great with my credit card, and my spending/pay-off habits were always on time. Over the years, though, I accumulated approximately $5k in CC debt thanks to some big travel purchases. I was able to eliminate this debt fairly quickly.
Was the total debt always the same amount, or did it grow over time? What was the interest rate?
My debt grew over time because every year, I was taking out more and more student loans. I never had a grasp on exactly how much I owed at any given time I just accumulated until the day that I graduated.
The interest rates on my student loans varied at the time from 3%- approx 8%. My car loan was approx 4% but was refinanced down to about 3% halfway through the life of the loan.
Why did you choose to get into debt? Were you fully aware of everything you were getting yourself into?
This is a good question. I think a lot about the word “choose,” and my best answer is that I believed I had no other options. Not going to college was out of the question in my household. My mom was a teacher who had her master’s degree in teaching, and my dad regrettably never finished college. The combination of both of my parents expressed the importance of getting my degree.
I was not fully aware of what I was getting myself into. I always assumed that I would have to pay back my debt, but it was never a priority when I was in college. It turned out to be a big wake-up call when I graduated and finally had to start paying it off.
Paying off the debt
Did you already eliminate the debt, or are you still working on it?
If ahead of schedule, what made you want to eliminate it sooner?
Did you have a strategy to pay off the debt? If so, what was it?
As mentioned above, I paid the minimum amount on my student loan and car loan until early 2020. I was lucky enough that my low overhead (no kids, low rent, no vacations, etc..) allowed me to save money while paying off my debt.
Now, this is an important part of my journey that I believe is unique to my situation. While eliminating my debt, I was able to save approximately $100,000. This money was being saved for a down payment on a house. The money was accumulated through overtime, overtime, overtime!! This is one of the benefits of being a police officer. Overtime is everywhere. Although my loans could have been paid off sooner, I was motivated to save up enough money for a home down payment.
This motivation came from seeing what my parents and family went through back in the 2008 recession. Once I hit a specific savings goal, my “extra” savings money went straight towards my debt. I knocked off the remainder of my debt starting in 2020, which totaled approximately $10k-$14k.
Did you take on any side hustles, overtime, etc. to eliminate the debt sooner?
So much overtime! As mentioned above, I worked my tail off, working as much overtime as possible. This overtime was two-fold; to pay off debt and to buy a house. As I mentioned earlier, I am still waiting to buy a house. The housing market is crazy, and I am having a hard time putting good money down for a home that I don’t love, and I believe, is currently way overpriced.
Back to the overtime, I worked every shift I could get. I also transferred departments from the highway patrol to the sheriff’s office. This transfer gave me a serious pay raise in the range of $8.00 an hour right off the bat. I never considered any side hustles due to the amount of overtime that I worked.
One thing I do want to add is that I eliminated all of my debt on my own. I never received any help from family or friends. This is a point of pride that I take in my debt journey. I knew that while eliminating my debt, I was not going to receive any “relief.” I took pride in that, and I believe that it made me work harder and has given me a perspective that most of my peers do not have.
What have your learned from all this?
Having a plan is important. Sticking to the plan is even more important. And having patience is even more important! Don’t get discouraged or burnt out while eliminating debt. Just keep chugging along with your plan, and eventually, you will get there.
Knowing what you know now, would you have done anything differently?
This is hard to say. I cherished my time in college. Playing collegiate baseball was a dream come true. My goal was to play professionally, and going to college was the only way that I was going to get there. So you can say that I got to chase my dream. I also made some very great friends and gained valuable life experience and perspective. The downfall was I accumulated a bunch of debt. Some days I believe I should have done things differently, trade school, military, etc.
Other days I am happy with the choices that I made and believe that those choices made me into the person that I am today!
Was the debt worth it? Did you get a return on your investment (ROI)?
Sometimes…See the answer above.
What would you say to someone thinking of getting the same debt as you?
Have a plan and understand all of your options!
What would you say to someone struggling to pay the same debt as you?
See Learning Experience question #1.
Are you still paying any other debts, or did paying this one off made you become debt-free?
What are your plans for the money that was going towards the debt all this time?
Right now, I am taking all of that money and continuing to save for a house. I am also contributing $1,000 a month to my 457B plan. This is our police retirement account that is separate from the pension that we receive.
Where do you go from here? What are your personal and financial plans for the future?
My plan seems to change with the days. For now, Accumulate cash and buy a house. Buying a house is important because when I have kids, I want them in a safe and steady home where they will get to grow up around great friends and in a loving atmosphere.
Suppose kids end up not being in the future. I want to accumulate enough cash to retire early and travel. Working in the law enforcement field can be very stressful, where we spend night after night in high-stress situations. The idea of retiring early and taking a job on a beach somewhere seems more appealing by the day!
Any final words?
Thank you for allowing me to be a part of what you do. I believe that eliminating debt is a crucial part of building wealth, and most people/kids do not have a plan to eliminate or build. Whatever I can do in the future to help, just let me know!
This article originally appeared on The Financial Alien and has been republished with permission.
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Cristian Ferrier is the founder and author of Financial Alien, a site that promotes financial literacy in people. He is a husband, father, and IT professional. A 34-year old immigrant who went from having $80k in student loan debt, to building a Net Worth of $600k+ in less than 5 years, and is now on the path to retire at the age of 39. Learn more about him on his About Me page. He loves learning, talking, and teaching about personal finance, and wants to inspire others to create their own path and follow their dreams. Contact him on his Contact Me page.