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How One Man Annihilated His Debt And Is Helping Others Do The Same

They say to set your goals high, but what about paying off your student loans in one year?

If that sounds crazy, try this on for size: One student loan slayer managed to do it — without earning a six-digit income.

Here’s the story of what dedicated goal-setting, focused budgeting and strong-willed determination can do.

It all started with a deal

Born and raised in Maryland, Phil Risher graduated with a degree in international business in 2012 from a college 20 miles outside of Pittsburgh. Having developed an interest in personal finance since a mishap with an overdrawn bank account, Phil wanted to pay off his student loans as fast as possible.

With $30,000 in loans and an annual salary of $48,000 from his sales and customer service job, he settled on 12 months as the timeframe. But even though his salary was higher than his loans, there was still taxes, rent, food, and other costly items to consider.

So Phil came up with a plan. He understood he needed to reduce his expenses as much as possible, with rent being the highest expense of all. But how can one reduce something as immovable as rent?

Strike a deal.

Phil contacted his father and offered him what sounded like a perfect situation for them both. He’d live in the basement of his father’s house rent-free and earn his keep. He’d cut the grass, help out around the house, and babysit his younger brothers.

Now, not a lot of young adults want to move back home after graduation. And not a lot of parents want their kids back under their roof. But Phil knew he could add value to his father’s life, and that the money he saved could help him reach his one-year payoff goal.

Ultimately, they agreed and set some house rules, and Phil was debt-free by 2013. Even better, he now looks at that time in his life as a blessing, since he didn’t have the chance to live with his father growing up. And he was able to be a positive example for his younger brothers at the same time.

But it wouldn’t have worked without a budget

It’s pretty easy to think, “Of course he paid off his debt — he didn’t have to pay rent!” But it’s not as simple as it sounds.

How often does extra money come into our lives, and instead of applying it to something productive, we go shopping or plan a vacation? It’s one thing to say we’ll do something specific with it, but it’s another thing to do it.

For Phil, goal-setting and maintaining a budget helped him use the extra financial breathing room for its intended purpose. He wrote his goals down and plotted a path to achieving them, with the budget as his map, and the one-year payoff goal as the destination.

Then he added a “daily creed” to stay the course. Every day, Phil would ask himself, “Why are you going to work today?” This helped him stay focused on what he wanted to achieve in the long run.

This goal-setting, budgeting, and daily creed model worked so well that he decided to do it again. Phil and his father extended their agreement for two more years, adding a stipulation that he’d pay a modest amount of rent, and Phil was able to save $60,000.

Phil then used that $60,000 to make an offer on a $90,000 home in his home state of Maryland. Since it was all cash, he was approved. At 25 years old, Phil became a homeowner.

If this sounds simple, remember that the principles might be straightforward, but the sacrifice and daily practice present the challenges. (And a little help along the way doesn’t hurt either, like having a place to stay at his father’s house.)

In Phil’s words: “Remember that it’s not about how much you make, but how you manage your money. Create a plan and execute on it every day.”