On The Money Exchange Podcast and in the It's My Money Journal
we have explored many stories about individuals getting out of
debt, but hearing about someone doing that at Roy's age, is rare.
Here we explore the story of Roy Patterson, a 31-year-old who paid
off his student loan debt of more than 55K in four years. You will
hear about his journey, how he accomplished his goal, how his parents
and siblings joined him on this journey, his story highlighted by
CNBC's Millennial Money, how he it was also essential in dating and his tips for anyone with this type of debt to accomplish the same.
Roy comes from a Jamaican immigrant family, and his parents have been in the states for well over 30 years. Attending college was always a dream, but at that point, he didn't understand how much it costs to go to a 4-year college in America. Roy took out student loans co-signed by his parents and started his journey into debt. At the end of four years, he was about to graduate from college, and he started getting emails from all the loan companies about loan repayment and interests. Initially, he decided to ignore them as he was scared about paying these loans and not having a full-time job. Until the loan companies started calling him and that is when it hit him that he needed to figure out a way to pay off his student loans.
Starting the debt-free journey
About six months later, Roy got a full-time offer at a large insurance company through their Technology
Early Career Development Program, where he was able to bring home a pretty good salary. This stable job gave him the confidence to tackle his loans. One of the first things that he ended up doing was understanding his relationship with money, understanding what a budget is, his student loans, what's different between subsidized and unsubsidized, and how much interest he is paying a
During the same time, Roy was intrigued by the Suze Orman show, uniquely her segment titled
"Can I Afford It." Watching the show, he realized many folks were in a worse position than he
was. Suze Orman was starting to resonate with him because she talked to people who were in
bad financial situations than he was and was able to provide them with an outlet. So he thought
to himself if those people can do it, why can't he do it, and then that's when he decided to get
serious about the debt.
He brought in his mom, started watching it together, took notes, and made a pact to stay the
course. He convinced his mon that they were going to follow the plans, learning together and
settling all of their debts.
Roy's story is not a straight shot to debt-free living, and there were many twists and turns along
the way. Roy started his full-time job in January of 2013. He worked on achieving a debt-free
life from 2014 to 2018 which is when he officially finished paying his loans. He paid back the entire $55k.
In between, Roy did get sidetracked and discarded his frugal ways in the hopes of living life more.
But he soon realized that lifestyle didn't make him happy; what made him happy was to achieve
his goal of being debt-free by 30. So he refocussed on his efforts on hunkering down with his
plans on reducing the debt he had, that's when it happened and was able to attain the happiness
he was searching for by reducing his debt.
The debt co-signed by Parents
Roy took a look at all his debt: his credit card debt, student loan debt, car debt, and had to identify the biggest thing that was holding him down and how to prioritize the repayment. Student debt came into perspective for two reasons. One is that student debt is not dischargeable in bankruptcy, so it doesn't matter what he does, that student loan debt will never go away besides like some catastrophic issue happening with him.
The second and more important reason was that his parents co-signed student debt. So if he didn't pay off those loans, they would be saddled with these debts. Roy also has a younger brother and sister who also went to college, and his parents co-signed on their loans as well. Roy was mortified that if he didn't pay his student loan debt, this would be bad for his parents especially coming into their retirement years. Overall, this was one of the primary reasons for sticking to his plan as he didn't want his parents to pay for or be in trouble over loans he used to get a good education and get a career.
Methods to pay back loans
So, when Roy decided to pay off loans, the one thing he read was first to pay off your higher- interest loans. Although it was sound financial advice, Roy felt he had to attack his credits based on his psychology. Roy didn't follow that method, but he pursued another methodology called the snowball method. The usage of this method was predicated on understanding the psychology of the mind and what makes you happy. The snowball method makes you start with your lowest balance; it doesn't matter what the interest rate is. You pay that off, and then you work on the second lowest balance, and you go that way until you're able to pay off all your loan. Getting the satisfaction of completing one loan payment boosted his confidence and allowed Roy to continue living his
debt-free process. Roy can implement his plan, which is to necessarily forgo any social ideas or anything like that and focus on paying off this debt.
But in his journey towards a debt-free life, he changed methods and moved from the snowball to the avalanche method. Roy ended up switching it up because his interest rates for my private loans were far higher than his interest rate for his federal loan. So his federal loans at the time were about 6.5% a year while his private loans were close to 14%. As the private loans were variable, the interest rate was changing every three months and was moving 14 to 14.5% to 15%. Roy had to kind of switch his methods as he could not continue to do this snowball because he is going to be spending a lot more money trying to pay off the interest on these private loans. In the avalanche model, Roy started with a high-interest loan paid those off and then began to work on the next loan with the lower interest.
CNBC Millennial Money Program
Roy had watched CNBC for eight years since he graduated from college. Within CNBC in their "Make It" section, which is their college or the young millennial version of CNBC, they have a program and a column called Millennial Money. Millennial Money is a program with an interview series profiling millennials in different cities and at different income levels about how they make, spend, and save their money. Roy watched it over a year and reading through the blogs and getting a lot of insights. He has always believed, and told his family and friends, that he would be a good fit for the program due to his unique story. After getting a little bit of encouragement, he went on the CNBC Millennial Money website and sent them an email about his story. Surprisingly about a month later, they got back to Roy, stating they were interested in featuring him on their program as well.
The CNBC team decided they wanted to come to Philly and film a segment on Roy. From initial contact, in November of 2019 to about February 2020 when formalities were completed to March 2020 when the shoot finally happened. The CNBC team started shooting and putting Roy's story together. One of the things Roy was afraid of is that once he signs the waiver, he would lose all creative control, and he wasn't sure how his story would come out. But to Roy's surprise, when he saw the final video when it came out the video, and the article conveyed everything that he wanted to say. The CNBC team stayed true to their initial discussion and covered the story in a way that highlighted the areas of hard work and perseverance which Roy wanted to project. The reaction to the Millenial Money program featuring Roy's story has been phenomenal. Many people came back to Roy, thanking him for telling his story. Many people have come to him and shared their similar experiences, and it inspires them to do it as well and become debt-free. He got umpteen messages to thank him for doing the program and putting the story forward of someone that looks like Roy and sounds like Roy and comes from his background. It is more relatable to many people and lets everyone know that is possible. He has inspired many to start their debt-free journeys and inspiring people to lead and stay the course on their journey.
One of the things that Roy loves to do is helping other people. Roy spends a lot of his time working with people who don't have that support system like he had and helping them accomplish their dreams and goals. So sitting with them, consulting with them, and trying to understand the relationship with money and what they can use to put a little bit of rigor and a little bit compassion into what they do. Roy also runs a financial literacy program at work, where he, with a partner, created a curriculum for new hires, so they understand what taxes are and how to budget, and then how to make prudent financial decisions. Along with that, Roy also works with students middle school, high school, college students about student loan debt, credit cards, and things like that to give them an idea of what you know what's coming. Roy tries his best to give back to the community to provide support when people don't have that because, again, he was very fortunate, and he knows that. Roy is lucky to have a two-parent household, which gave him all the support and guidance that was needed. Roy's goal is to
provide that and be the sunlight for someone who may not have that same support that he had.
A quote, Roy believes in wholeheartedly, is that "Money doesn't make who you are. It only brings out the good or bad quality that's already in you". And what Roy means by that is that money is excellent and allows you to do things you want to do. Still, it also will bring out the positive quality you feel like, such as perseverance. But, it can also bring out the negative side in you, like jealousy and things like that, so Roy always wants to let people know that money is great, but don't let it ruin your life. Don't let it be the end all be all as money only allows you to do the things that you do want to do.
That's what Roy wants to let people know is now that he paid off his loan, but he is still the same person that he was, you know, ten years ago, 15 years ago. The second piece of advice for people is to stay focused, stay the course, and see that you're going to have missteps, Roy had failures along the way nothing was easy, he believes he took two steps forward and then took ten steps backward, but he never gave up. Don't give up, keep on going, keep grinding, talk to people, and get there.
Roy Patterson dropped some knowledge for all of us. To hear the full interview, listen to the podcast. Roy is also a Financial Facilitator on the It'$ My Money™ team. Feel free to comment here if you are interested in engaging to discuss financial literacy, paying off student loans and debt-free living. Need a debt tracker and budget sheet, check out our freebie page. Interested in financial coaching reach out to our team CONTACT
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