Welcome to Debt Free Journey. This interview series has been developed in collaboration with my friend Cristian Ferrier from The Financial Alien.
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 Adam Shoup, an accountant in Reno, NV. Adam talks us through his journey to eliminate his student loan debt. Not only he eliminated $31,955 in student loan debt and credit card debt, but he did this in 15 months. How did he do that? Read along to find out.
And without further ado, let’s get to the interview. Enjoy!
- Debt paid amount: $31.955.25
- Debt source: Two credit cards, student loans & one personal loan
- Time to eliminate debt: 15 months
About Adam Shoup
Tell us a little bit about yourself
My name is Adam Shoup. I was born and raised in Washington state and later moved to Nevada for college in 2012. I am married to my wife, Isadora, and we have one dog, Tyson. I have worked as a tax accountant for the last three years for a large insurance company completing partnership tax returns largely dealing with real estate investments.
Outside of work, I enjoy being active. I’m a big skier and snowboarder in the winter and really enjoy hiking, traveling, and training in Brazilian Jiu-Jitsu (started January 2021).
If people want to connect with you, where can they find you?
The best place to reach me is on Twitter, @AdamShoup. I’m the most active there.
Introduce us to your debt. Where did it come from? How much was it? How old were you when you first acquired the debt?
The debt largely came from student loans. I was just over $19k left when we aggressively started paying down the debt, but I graduated with around $22k in student loans.
The remainder was a little over $9k in credit cards and $3.6k in a personal loan from Lending Club.
I was 18 years old when I took out my first student loan. I completely understood that I had to pay it back eventually but did not have any sense of urgency to get it paid off.
When I was around 20 years old, I opened my first credit card with Wells Fargo and had a credit line of $800. The sad thing is I carried a balance on that card for probably four years before I ever paid it off for the first time.
Was the total debt always the same amount, or did it grow over time? What was the interest rate?
The total debt fluctuated at times, but for the most part, was increasing. Before we had paid off the nearly $32k balance, a car loan for $10.5k that I had already paid off, and I had financed a sound system for that car for roughly $900.
I had paid off all my credit cards before, but without any savings found myself digging back into the credit cards and creating new problems to solve.
Luckily before we went all in, I had already paid the car & sound system off. The interest rates varied between the student loans between 3%-6%, and the credit cards were around 20%, lastly, the personal loan was a little over 8%.
Why did you choose to get into debt? Were you fully aware of everything you were getting yourself into?
I more-or-less didn’t have much of choice for my education if I still wanted to attend school. My parents helped out with a portion of my education, but whatever wasn’t covered was my responsibility. I’d say I was fully aware of what I was doing but didn’t fully understand the consequences of what I was doing.
As for the credit cards and personal loans, that was my fault for having a flawed financial system.
I opened my first credit card after talking with a banker because it would be a “great” way to build credit. I bought a music festival pass with the card, ended up having to sell the pass, and didn’t use the money to pay off the balance. The credit card mess had started at that point.
Paying off the debt
Did you already eliminate the debt, or are you still working on it?
We eliminated all of our outstanding debt in March of 2021. It was an incredible feeling making the final $1.7k student loan payment.
If ahead of schedule, what made you want to eliminate it sooner?
It took us roughly 15 months to pay it all off, however, we could’ve finished in about 11 months, but we had some wedding payments starting to show up, and we didn’t want to dig back into loans, so we continued to cash flow the wedding expenses until we had extra money to make payments on the debt.
We were far ahead of schedule set in the loan terms on the student loans since I graduated in 2017. The factor that helped us the most was the federal government pausing the student loan interest rates. We could’ve invested the money and potentially had a bigger amount pending on how the market did, but we decided to continue to shovel money onto the loans and close that chapter out.
If ahead of schedule, what made you want to eliminate it sooner?
My wife and I are very ambitious people and want a lot from our lives. We felt that the debt was inhibiting our plans by eating away at our paychecks and decided that we want to live a life where with each paycheck, we got to choose where the money went, not lenders.
Did you have a strategy to pay off the debt? If so, what was it?
We used the debt snowball method to pay off our debts, and it worked tremendously. The psychological wins along the way helped keep us motivated, and tracking the amounts, gave us a visual where we could see the progress with each payment.
Did you take on any side hustles, overtime, etc. to eliminate the debt sooner?
With my job, I worked overtime for a large portion of the year, and I’m incredibly grateful for that. We drove DoorDash for a short time while we were living in FL, but that wasn’t a large part of our tactic.
What have your learned from all this?
My biggest takeaway is that our finances are our responsibility. We made a mess, and it was our job to clean it up. It’s a little frustrating at first when you completely accept it, but it’s very freeing when you realize the flip side of the coin that you can also work to have whatever you’d like.
We eventually will use debt again to buy a house, and now have learned how to manage it more intentionally, we’ll be able to have a much better approach to it.
Knowing what you know now, would you have done anything differently?
There are several things that I would’ve done differently looking back. I would’ve paid off my credit cards as soon as I made a charge on them and built an emergency fund as quickly as I could, knowing what I know now.
While we attacked our debt, we also stopped contributing to my 401k plan at work to free up more money to throw at the debt.
Looking back, I would’ve continued to invest, get the company match, and use what was left to pay the debt. It may have caused us to take longer to clear the debt, but we missed out on reducing our taxable income and additional money my company would’ve provided.
The last thing is super simple, but I would’ve worked to live on less than I was making. I was doing the opposite for a long time and used credit cards to supplement my lifestyle.
Was the debt worth it? Did you get a return on your investment (ROI)?
My student loans were worth it as I could get a good-paying job with great benefits straight out of college, and the degree has opened other doors to me that otherwise may have stayed closed.
The credit cards and personal loans were not worth it at all. I paid tremendously for the charges I put on those cards.
The only thing I could think of where it was *maybe* worth it was I used it to pay for several international trips, but ultimately those trips ended up being much more expensive than the initial ticket price. I would not recommend charging a credit card for trips if you don’t have the money to pay off the balance.
What would you say to someone thinking of getting the same debt as you?
Outside of the student loans, don’t do it.
If you need to borrow for college/education, look at cheaper alternatives and places to help pay for the expense.
There are many options out there that can help reduce the expense of education. Those include community college, applying for scholarships, having work help pay for school, etc.
What would you say to someone struggling to pay the same debt as you?
I would tell them that the first thing you have to do is to develop a plan. Without a plan, it’s incredibly difficult to be intentional about clearing the debt.
Celebrate the little victories as they come, and never forget your “Why?”. It’s easy to lose motivation during the process, but remember your “Why?” will help keep you on track.
Are you still paying any other debts, or did paying this one off made you become debt-free?
We are entirely debt-free.
However, when we buy a house, we will take on a mortgage. That could be sometime within the next year or two.
What are your plans for the money that was going towards the debt all this time?
Our most considerable expense right now is for our wedding in November. That takes up a big chunk of our cash, but we have also been steadily investing and working on building our emergency fund.
We also have a savings account where we have been putting money for a house down payment.
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Where do you go from here? What are your personal and financial plans for the future?
Our plan is to consistently invest a good portion of our income each month for the coming years and put ourselves in a position to do more of the things we love.
Neither my wife nor I have plans of working until what is considered retirement age, and to reach that goal we have to put our money to work for us.
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Any final words?
No matter where you are on your financial journey, it’s never too late to make positive changes. Debt was something that we saw as a roadblock, and we decided to remove it. As we are experiencing now, it’s an incredible feeling to be able to decide where every single dollar of your paycheck goes.
Some Last Thoughts
I met Adam through Twitter, and watching his story unfold for all to see was amazingly motivating.
He and his wife knocked out all of their debt in 15 months, and they worked every day so hard to make sure they were debt-free.
Debt can be such a crippling experience, but if you have the motivation, the will, and courage you can make the impossible possible.
It takes little steps to gradually knock out debt, and I am inspired by Adam's story, and I think after reading this you should follow as his story now continues as he and his wife invest for their future.
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” Spend less than you make, stay out of debt, and invest the rest”
I’m Steve. I’m an English Teacher, traveler, and an avid outdoorsman. If you’d like to comment, ask a question, or simply say hi, leave me a message here, on Twitter (@thefrugalexpat1). Many of my posts have been written to help those in their journey to financial independence. I am on my journey, and as I learn more I hope to share more. And as always, thanks for reading The Frugal Expat.