How to ditch your credit card debt and repay your student loan: get mad
Dealing with debt
  • After his student loan company tripled his monthly payment, Steven Donovan’s life was turned upside down
  • Then he got angry. Within five years he was debt free

After graduating from college, money coach Steven Donovan owed around US$98,000 in student loans and credit cards. He wasn’t focused on repaying the debt, and his credit-card balances slowly ticked up. A few years later, he financed a Mercedes-Benz, adding US$18,000 to his financial load.

On a whim, Donovan moved from Chicago to Miami and soon found himself with little income to cover his monthly repayments. It was a wake-up call.

“About a year into living there, I ended up getting a letter from my private student loan company,” he said. “Since finishing college I had gone into forbearance and paid the minimums … [but now] my payment was going to triple. It upended my budget and something had to change. I tucked my tail between my legs, moved back to Chicago to save and worked where I did when I was in college. It was a very humbling experience.”

When it comes to paying off debt, motivation is crucial

Donovan moved in with family and sold that Mercedes, shaving off a big chunk of his debt and saving an extra US$500 a month or so, he said. With a new job as an assistant bank manager and a side hustle selling clothing on eBay, he finally implemented a plan to pay off the remaining debt, which he estimates was between US$80,000 and US$90,000.

Enter: the debt tornado

Instead of using one of the two most popular debt pay-off strategies – the debt snowball, in which you pay off the smallest debts first, or the debt avalanche, in which you focus on the debt with the highest interest rates – Donovan decided to tackle the debt he “disliked the most.”

Donovan channelled his anger into a tornado-like rage to inspire himself. Photo: Shutterstock.

“I started with the debt snowball method but shortly into paying off debt I realised how much I disliked my private student loans and also the bank that tripled my monthly payment and focused on them,” he told said. “ I took all my anger and rage towards those loans and paid them off before the smaller student loan I had.”

And the strategy name? “Being from the Midwest, it just made sense to use a tornado.”

Increasing income

Donovan also increased his income and savings by doing a house-hack. He rented out his wife’s house in Florida. Within five years of moving back to Chicago under a mountain of loans, Donovan became debt-free.

“My philosophy is, no one hates your debt more than you,” he said. “If you really don’t like your debt, you kind of end up getting angry about it and you want to do something about it.”

This article was curated by Young Post.