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How I Ditched Debt: ‘Happiness Journey’ Fueled Payoff

Dec. 10, 2019
Paying Off Debt, Personal Finance
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In this series, NerdWallet interviews people who have triumphed over debt. Responses have been edited for length and clarity.

Okeoma Moronu Schreiner

Okeoma Moronu fell from one major life decision to the next. She went to law school in New York City because people said she had a knack for law. And the more than $200,000 in student loans she needed to fund that degree? She figured that was just par for the course.

But when Moronu had to confront the reality of how much she owed — and was paying in interest — the young lawyer realized she needed to take a more purposeful approach to life and her finances.

So she dedicated herself to what she calls her “happiness journey.” A big part of that journey was freeing herself from the $3,000 monthly student loan payment that stretched her budget despite making $160,000 her first year out of law school.

After paying off $212,000 in 6.5 years, Moronu and her young family now live in Costa Rica and continue to focus more on happiness and less on burdensome debt.

Moronu chronicles her journey on her blog, “The Happy Lawyer Project.” She recently talked with NerdWallet to share her story, which may inspire your own debt-free journey.

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How much debt did you have and what’s your debt load now?

I had $212,000 in student loans.

My husband and I currently have a $70,000 mortgage on rental properties and a $20,000 balance on a 0% annual percentage rate credit card that covered the remaining balance on our house in Costa Rica, which we mostly paid cash for and expect to pay off by February.

How did you get into debt?

Law school. I was completely in over my head.

I grew up overseas, spent most of childhood in Indonesia and moved to the United States in high school. As a result, I didn’t have much guidance growing up in terms of college or finance because my parents didn’t know about that.

I ended up in New York at Columbia Law School and took out a lot of student loans, a little over $200,000 by the end. It was a much bigger financial decision than anyone in my family had to make before. So I just blindly went all in. It also happened to be 2008, so it was a terrible time to take on loans. Many of my interest rates were around 8%.

When did you begin to understand your situation?

The first time I understood what I got myself into was when I graduated and I had to go to the loan office at my school.

I saw my total outstanding balance and what my monthly payment was going to be. I owed $212,000 and I was supposed to pay around $3,000 a month. It was a complete shock. I felt like the floor was pulled out from under me. It was the biggest number I had ever seen.

At that time, my husband and I were planning our wedding … I didn’t have much time to process it. I was thinking, “You’re a smart girl, you’ll figure it out.”

My loans were deferred for six months after graduating, but at the time I had this very grand goal of paying $4,000 a month, because that’s what I thought I could afford each month. When I started paying off my loans after the six-month period, I remember not being disciplined around that and letting it slip a lot — paying less than the $4,000 I wanted to pay each month.

It was incredible because I thought I was going to pay so much toward my loans, but I hadn’t accounted for the cost of living in New York City. Once I paid for my exorbitant rent and food and taxes, there was just not that much left to put toward my loans.

When did you decide to get out of debt?

I ended up going to Singapore for work for a year, and it was only when I returned that I realized I needed to get serious about paying off my debt.

Upon my return, I remember talking with my law firm about my taxes, because they handled them. I remember having to tell them how much my interest payments were that year, and it was around $30,000 from all my loan servicers.

That’s when I said, “This is insane.” And that’s when I started digging into the interest rates of my loans and I refinanced for the first time.

How did you get out of debt?

I put a timeline in place to pay off my debt in five years, and I just started throwing all my extra cash, like bonuses, tax refunds and gifts, toward paying off the loans. I was making $160,000 a year with my first job out of college and was paying a little more than $3,000 a month to my student loans, which was just over the minimum.

Ultimately, I didn’t end up paying off the debt in five years, because my husband and I had kids and we bought real estate and there were so many expenses of living in New York. But each year when my salary increased, I would put the difference toward my debt. I also refinanced my various loans four times over the years to manage interest rates.

While I was paying off my student loans, my husband was also paying off his own debt. He’s had numerous jobs over the years I was paying off my debt, making between $22,000 and $80,000, and he took time off at various times to take care of our kids. Over the years I was paying off my debt, my husband often directed most of his income toward his debt or child care.

You moved to Texas to boost your debt payoff. How did that help?

The move to Texas was easily the biggest sacrifice we made in pursuit of debt payoff. We loved (and still love) Brooklyn and had a great community of friends, great jobs that we enjoyed. But we knew that we could significantly increase our disposable income by moving to Texas. The move was incredibly challenging for us as a family, but we knew it was going to be worth it.

We knew that having that extra disposable income [thanks to the lower cost of living] would mean that we would be able to not only pay off the student loans, but also able to start building a real foundation for our financial future, including the move to Costa Rica.

How did your happiness journey guide your debt payoff?

Prior to becoming a happiness enthusiast, I was driven by a lot of fear. I was constantly afraid I was going to lose my job and I wouldn’t be able to pay off my debt. There was a fear I had that something could happen between where I was in paying it off and getting my balance to zero.

So I switched my mentality … I figured if I could get my [debt] to a manageable number, that for me was as good as getting it to zero. By focusing on happiness, I regained some control in the process. It helps me not feel like I was trapped by that financial situation.

That way, I could take a lower-paying job that is maybe less stressful and could still make my debt obligations. That was very liberating, because I realized that debt is very scary if you don’t think you can keep up with it.

How has your life changed for the better since you ditched debt?

My husband and I were able to leave our 9-to-5 jobs and take a sabbatical in Nosara, Costa Rica, while we expand our real estate portfolio and pursue other passion projects.

The truth is that we went from being a high-earning family to a family living on a very tight budget, but our lifestyle hasn’t changed that much. It’s really just the rate at which we are able to save and grow our wealth that has been affected, but our day-to-day life is so much more fulfilling now that we feel financially free.

[After taking time off, Moronu recently accepted a job working remotely as legal counsel for a startup in the Bay Area. She continues to run her blog and podcast. The family continues to live in Costa Rica.]

How to ditch your own debt

You can ditch your own debt, too. Here’s how.

Overwhelmed by student loans? Know your options. Income-driven repayment plans and refinancing loans can help make your payments more manageable.

Find your “why.” Focusing on your financial and life goals can keep you motivated to pay off your debt over the long term.

Pick a debt payoff strategy. There are a number of ways to pay off debt, depending on your budget, lifestyle and how much debt you have. Find a debt payoff path that works for you.

Photo by Abby Bengs.

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