20. The Inspiring Debt Payoff Story of Denis O’Brien and Katie Welsh
Sheepdog Financial
English - November 13, 2019 08:00 - 53 minutes - 49.2 MB - ★★★★★ - 4 ratingsInvesting Business investing finance personalfinance passiveincome wealth valuestocks stockmarket business money equity Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
People talk about paying off their debt, but many people are stuck and have that sinking feeling that it will never get paid off. Today's inspiring story features Denis O'Brien and Katie Welsh who paid off over $200,000 in debt. Katie knew that she was in trouble with all of her debt, she just didn’t know how much until Denis compiled a spreadsheet of all of her debt. She had a cry and then made an action plan.
Her plan included selling things, going back to work, and having a side hustle. We also talk about tackling student loans. She was able to get $5,000 of her debt forgiven. Katie also paid $3,000 a month on her student loans when her teacher salary was less than that. That's the power of having a side hustle. Denis and Katie recently got married. They share how they made a plan to have a debt free start and how paying off debt can actually become addictive.
Highlights from Episode 18
[01:15] Katie and Denis got married in July. Katie had a ton of debt, and it had never occurred to her to take a good hard look at it.
[02:04] Katie moved from Florida to be with Denis, but all of her bills from Florida followed her.
[02:44] Katie was a teacher and when she moved in with Denis, she didn't have a job. As the bills were coming in, he started asking her questions that she didn't have an answer to.
[02:58] Denis decided to help Katie and used a spreadsheet to add up her bills which totaled $200,000.
[03:28] Half of her debt was her house in Florida. She had a car payment and a student loan.
[04:14] Denis had created a step-by-step plan where she could be debt free in three years.
[04:40] She was able to sell the house. The car had negative equity. She was able to put the money from the house towards the car.
[05:34] She was paying almost $700 a month for a Honda.
[06:24] She originally had $30,000 in student loans that had become $42,000. With deferment and minimum payments, it wouldn't be paid off until she was 60 years old. She had another $40,000 in interest to pay with her current plan.
[07:02] Denis said he would cover living expenses and her job was to get out of debt.
[07:22] She was for teacher loan forgiveness. She taught for five years in a low income school and $5,000 of her debt was forgiven.
[09:06] You have to follow the rules perfectly with these programs. One mistake and you're hitting reset.
[09:58] They looked for low hanging fruit to knock down the debt as quickly as possible.
[10:24] Selling the house and making the biggest payments where it would make sense. Any spare money left over goes towards debt. They also saved up to pay for their wedding in cash.
[12:02] The more Katie paid, the more motivated she became.
[13:30] Katie started looking for ways to make an extra $1,000 a month. When you work all the time, you're too busy to spend money.
[17:17] Realizing the value and future value is critically important.
[18:13] Katie was a waitress during the day. They also rented a room in their home through Airbnb.
[22:56] Katie is also a VA for an author. She tutors twice a week. She used to get paid to charge Bird scooters.
[24:18] Scott makes extra money being a soccer referee, and he and his wife used to mystery shop movies.
[25:35] Side hustles help them bring in an extra 20% of savings.
[28:29] Denis received a bonus that helped them make their goal early.
[30:13] They would do some things for themselves when they would reach a goal.
[31:33] It's a challenge deciding what to do with your money. It helps to figure out what is important to you and when you want to reach your goals.
[33:40] Having a significant down payment eliminates PMI. Having a paid off home allows you to put more towards retirement. Everything is related. Strategize about what's important to you.
[35:13] Denis did a lot of number crunching with Excel. He's an Excel ninja and an accountant.
[36:57] They are huge fans of setting goals, writing goals down, and accomplishing goals.
[39:09] Katie's mom sent her care packages to help Katie not be tempted to spend. She was super supportive.
[40:02] Having their podcast and being open about their goals was another way to stay accountable.
[43:41] Taking on more debt is a big decision, but there are times when it is necessary.
[45:13] When spending, you have to weigh your values and find what is important to you.
[47:13] Common pitfalls happen. Life doesn't stop. Things happen. Have an emergency fund for costs that aren't foreseen.
[48:35] Watch out for extra interest with deferred payments.
[50:44] To get out of debt, get started. The first step is the hardest.
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