How to Navigate 6 Figure Debt

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6 figure debt is no joke. And I’m not talking about a mortgage, I’m talking about all the other fun kinds of debt that are out there.

I’m 27 years old and had $201k of student loan debt to my name once I graduated as a teacher. Yeah. You read that right and yes, I was stupid to take out that much debt to become a teacher. I’m well aware now. But, that doesn’t get rid of my debt.

I’m at the point now where my debt doesn’t feel so overwhelming. It definitely makes my budget trickier, still having a minimum payment of $1,100, but it’s a lot better then $2,000. And now that I’ve paid off $127k, the process is moving much faster.

I’m now in the 5 figure debt club. This was absolutely something I celebrated. 5 figure debt is so much better than 6 figure debt. And it was right around my half way mark too.

I’m at the point now though that it’s frustrating to think about the things I could have done with this money. I could have bought a house in cash with the amount of money I have put towards my debt. 6 figure debt is not fun, especially on a single income.

Over the last 4 years I have found some ways to help get myself through this. It’s been a long journey, but one that I know will be worth it once it’s done.

1. Don’t deprive yourself to pay off your 6 figure debt.

Yes, you need to cut your expenses to pay off your debt. But, learn from my mistakes. Slowly make these changes. Don’t try to drastically change your life in the beginning. All this will do is set you up to fail and feel down on yourself.

When you have 6 figure debt you know you’re going to be on a long journey. There is no avoiding it. This means you need to be realistic with what you cut from your budget.

But, how can I actually do this?

My biggest tip is to look to see what expenses you can live without. How I managed this was by looking at my transactions the previous month. I was so angry by how much I spent eating out, that I cut this from my budget first. This would be hard to cut out completely, but I limited it. I made sure I was aware of my spending in this category throughout that first month. Also, I made sure I only went out to eat to be social and not for convenience.

I suggest you do the same when you’re first starting out. Cut whatever makes you the most angry. Every time you go to make a purchase in this category, check in with yourself. Is this necessary, how has my spending been in this category so far?

Once you have done this, I suggest seeing if there are ways to do the things you enjoy for cheaper. For example, I won’t give up getting my hair cut and I won’t do it myself. However, I do spread out my hair cuts much more and make sure I get a cut that doesn’t need to be maintained.

Being in 6 figure debt is hard, which is why you shouldn’t deprive yourself throughout the journey. You should be more intentional about where you spend your money though.

I also love a good no spend month with 6 figure debt. You can go one month with not spending anything on extras, it’s short and super effective. I don’t recommend this for long term, since you’re going to be in debt for a longer period of time.

2. Get creative about big monthly expenses.

Unfortunately, there are just some things in the budget that you can’t cut out. Like, your housing. But, you can get creative with this category. Depending on your situation, you may need to make some major changes. I think housing is one of the best ways to save money. It’s typically a huge monthly expense. If you can get it as low as possible, you’re going to help yourself a lot.

For me, I literally didn’t have any money for housing with my minimum payments when I graduated. No teacher salary gave me a high enough salary to afford both. That’s when I realized I had to move back home with my parents.

This did 2 things for me, lowered my housing costs and put me in a high cost of living area. Which also got me a higher teaching salary. Is it ideal to live with your parents at 27, no. But, it has allowed me to pay off a ton of debt in a short period of time.

If I didn’t move home with my parents, I would have been putting every single expense on a credit card. There was no money left over in my budget, if I had rent. My current situation would have been so much worse then it was when I graduated.

Figure out ways to cut your housing expenses. Can you rent a smaller apartment? What about getting a roommate? Could you move in with a friend and split rent? The more money you can save in housing, the more that can go to your debt payoff.

3. Create a plan to pay off your 6 figure debt, but don’t be afraid to change it.

Like I have said a few times throughout this post, this is a long journey. When you’re first starting out, you’re going to make this perfect debt payoff plan. You’re going to be so excited to get things moving. But, life happens.

You need to make changes for life, or you’ll never get out of debt. It doesn’t make sense to be tied to a financial plan. These plans can’t take into consideration the things that life will throw at you. You’re better off delaying your plan, then going into more debt.

This also means that you can change the order that you pay off debts in. Nothing is telling you how to pay off your debt. Of course, there are plans out there and I’m sure you created your plan based on one of them. But, that doesn’t mean you need to follow it exactly.

Right now, I’m paying off my private loans. It doesn’t follow the snowball or the avalanche method. But, it makes sense for me and my current situation. In general, federal student loans are a bit more forgiving than private student loans. For that reason alone, I am paying them off first. My private loans also come with a minimum payment of $865 and I can’t wait to take that out of my budget.

Figure out what works best for you and make changes to keep yourself going. With 6 figure debt, paying off debt is paying off debt. Get it gone in whatever keeps you going on this journey.

4. Increase your income.

When you have 6 figure debt, you absolutely need to increase your income. It’s simple math. There is no way to get out from where you are without more money coming in. Figure out what you can do while keeping your sanity.

My rule is that I’ll always try it to see how I like it. If it’s too much with my teaching schedule, I eventually stop it. Of course, I can always do something short term. It makes it so much easier when there is an end date in mind.

With that being said, make sure that you enjoy what you’re doing. If you’re miserable, going to another job is going to slowly drain you. It’s just not worth it. You need to find something that you enjoy that also brings you in some extra money.

However, I also remind myself a lot that I can do anything for a short period of time. So, maybe you get a side job that you know you will be done with in a month. You can feel stretched for one month and you know you will be done soon.

It all comes down to what you are willing to do.

That’s really it. What are you willing to do to get out of debt. Some of us are willing to go crazy intense to have it be gone. Others want to live a little while they tackle their debt. It’s all about what you want to do. For me, I was very intense for about 3 years. I needed to take my foot off the gas though. I was burning out and getting very frustrated by how much my debt was holding me back from.

The reality was that my debt was no longer holding me back. I had paid off enough that it was no longer a huge burden anymore. I had put those restrictions on myself trying to see how quickly I could get this gone. The issue with that though was that I wasn’t living my life. Now I have a better balance and I’m still making extra debt payments every month.

So, I want to know, do you have 6 figure debt? Are you actively trying to get rid of it? If you aren’t, what’s holding you back? Sometimes all it takes is someone else to look over your situation and I’m happy to be that person for you. What have you done to pay off 6 figure debt?