Hello, my frugal friends. It’s been four years and one month since I paid off my loans after getting my MBA from Harvard. I destroyed $90k of student debt in seven months by living below my means and finding additional revenue sources.
And it has been two years and three months since I wrote to you. I’m sorry I’ve been gone for so long.
This is going to be a quick post. I’m stopping by just to reassure you that paying off your debt and living below your means is so completely worth it.
Let me cut to the chase: by continuing to live below my means, I’ve accumulated enough cash outside of my 401k to pay off my mortgage and be 100% debt-free, even while maxing out my 401k every year.
I apply Simon Sinek’s Golden Circle framework to many things I do in my life. The Golden Circle is comprised of three concentric rings: the inner ring asks “why”, the middle ring ask “how”, and the outer ring asks “what”. Every successful person and company starts with why they do something, then they figure out how they’re going to do it and what they’re going to do.
For example, Martin Luther King, Jr. believed that there are laws made by a higher authority and laws made by man, and not until all the laws that are made by man are consistent with the laws made by a higher authority will we live in a just world.
This is a fierce belief that MLK held–it was his why–and nobody could make him change his mind. And he took this belief and he organized marches and protests (how) until his what was accomplished: equal rights.
People and companies that fail, on the other hand, often start with what they’re going to to do and then figure out how and why they’re going to do it. To be successful at anything, figure out what your core beliefs are first. Then execute.
Definitely take 18 minutes to watch this video. It’s brilliant. It’ll provide an incredible amount of structure to the way you think, and it’s really handy for those strategic and/or existential questions that you’re encountering in your life and struggling to frame clearly in your mind.
Without further ado, here’s the financial Golden Circle that I use to guide my spending decisions.
Why
I believe financial freedom is a critical enabler to the pursuit of my goals and life dreams and to realizing my full potential.
How
I’ve sought financial freedom primarily by living below my means. Ever since I paid off my student debt, I’ve continued to live frugally. Here are just a few examples:
- I shop at Goodwill to supplement my wardrobe. There are bargains galore.
- I wear holes in the bottom of my work shoes before buying a new pair.
- I still don’t have collision insurance coverage on my car.
- When accommodations at my friend’s house fell apart when I traveled to LA last summer, I slept in my car overnight in a marina parking lot in Marina Del Ray. Seriously, I have the pics:

Seats folded down + backpack as a pillow = comfy accommodations

The next morning. That’s what a $200 smile looks like.
What
By living frugally, I now have enough cash outside of my 401k to pay off my mortgage and be 100% debt-free. Or start a business. Or invest. And leveraging any and all of these options will enable me to pursue my life dreams and realize my full potential.
Stepping Back
I think it’s important to step back at this point and point out that none of this would have been possible if I hadn’t figured out the “why”, the reason for paying off my debt. Lying in bed that one night back in August 2011 and realizing I wasn’t on the right path, that I wasn’t living my dream and wasn’t realizing my potential–and that my spending was largely to blame–helped me understand why I wanted to destroy my student debt. From there, it was a simple (and admittedly, sometimes not-so-simple) matter of executing the how and the what to become debt-free.
If you had told me in July 2011 that I’d be able to pay off my student debt and mortgage in fewer than five years, I would have laughed. However, if you figure out why it is that you want to do something, the how and the what fall into place.
I’m now working at a company I truly love, at a job that challenges me, and I’m making big plans for the future, all without the hassle of student debt (or credit card debt). I’m doing a much better of pursuing my life dreams and realizing my full potential than I was five years ago.
What is your financial Golden Circle? Why do you financially live the way you do? How do you do it, and what does it create for you?
Imagine if you determined a reason to pay off your debt and believed in it as fiercely as MLK did about the necessary consistency of laws created by man and those created by a higher authority. Imagine how powerful you could be in your own life.
Here’s an example: Do you believe that spending quality time with your children as they grow up is important? Is this a belief that you fiercely hold in your own heart? Is your lifestyle of consumption making you work around the clock to keep up with your bills? Is it taking you away from your children?
What if you adopted the following Golden Circle:
Why: I believe financial freedom is a critical enabler to spending more time with my children. These years are precious and I’ll never get them back if I miss out on them now.
How: I’ll stop living a lifestyle of consumption. I’ll start living below my means and I’ll pay off my debt.
What: By changing my lifestyle and paying off my debt, I’ll be able to work fewer hours and spend more time with my children.
No more excuses. Be real. Deep down in your heart, what do you fundamentally and fiercely believe in? Why is destroying your debt important to you?
Other Benefits to Being Debt-Free
While you’re figuring our your fierce belief, let me provide you with a few other personal benefits I’m experiencing to being debt free.
By living below my means, I can open my heart even more. In 2015, I donated my time and/or money to the following non-profits:
- Angel House Soup Kitchen
- Capital Area Food Bank
- CASA kids
- Shoal Creek Conservancy
- National MS Society
- Fundraiser for a memorial for my friend’s deceased brother
- Michigan Rowing team
By living below my means, I can give some pretty good gifts. For example, in October, I’m flying my dad down to Austin (he’s a serious car and racing enthusiast) to attend the F1 race, and in a couple years, my sister and I are sending my parents on a cruise for their 40th wedding anniversary. If I were living above my means and doing it just for me, this isn’t something that would have been possible. The saying “giving is better than receiving” is very true.
By living below my means, I’m doing more. As I look around my condo, it’s impossible for me to identify anything new that’s been purchased within the past couple of years. The other saying that’s gaining more and more traction in everyday vernacular—that “memories are more valuable than things”—is also very true. Almost all of my spending beyond standard bills goes to experiences like meals out, events, and travels with friends. I have thousands of pictures and memories that still make me smile today and will supply me with smiles for years to come.
Living below your means to pay off your debt will be challenging at first and take you outside of your comfort zone. But eventually, as long as you’ve clearly defined why you’re paying off your debt, you’ll adapt, frugality will become your comfort zone, you’ll pay off your debts, and you’ll be well on your way to realizing the “what” of your Golden Circle.
Reminders
This blog is light on content because I feel that I’ve already given you the tools to succeed. Shameless plug: read my book. It’s still as relevant today as it was when I wrote it four years ago. It’s only 100 pages, so give it a quick skim.
Read my last blog post. It, too, is still as relevant today as it was when I wrote it over two years ago. The five rules of a “level five” perspective still provide solid guidance:
- Love yourself. Don’t measure your self-worth based on what you own.
- Create your own happiness. Don’t expect stuff to make you happy.
- Say no to IOUs. Live within your means. Don’t borrow money to buy cool stuff.
- Be free. Save money for an emergency fund and retirement.
- Have an impact. Define success on your own terms.
In Closing
I really am sorry I haven’t written recently. I didn’t think I had anything new to share. I went through a dramatic transformation when I went from living above my means in 2009 and 2010 to living below my means in 2011 and 2012. That was incredibly fun to write about, and based on readership numbers, it must have been an interesting read, too.
I’ve maintained this “new” mentality of frugality ever since I paid off the student debt four years ago. Transformations are interesting and fun to write and read about. Frugality, for me, however, has become status quo. And the status quo isn’t very fun to read and write about. So really, think of my hiatus as a favor to you! You’re welcome!
Anyway, you have the resources. Now figure out your beliefs. Figure out why destroying your debt is important to you. Once you figure out why, you’ll be able to more clearly see the path you should be on to make it your reality.
To freedom!