How Cheese Dip Made This Man Pay Off $100K in Debt

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Making a good salary, buying a home, and starting a family has long been a description of the American dream. Unfortunately, things such as student loan debt, mortgage payments, and living expenses can make that dream a nightmare.

That’s what happened to Michael Hambrick, founder of The Ate Truths blog, when he graduated from business school at age 30 and owed $40,000 in school loans, $40,000 for a second mortgage, and $20,000 for a car payment.

The low point came just after he got married and realized his credit cards were maxed out. He couldn’t afford to order cheese dip during a dinner with his wife.

“It came down to the $6 cheese dip to make us realize that we had to make some changes,” says Hambrick. “That episode helped us begin to rein in our spending and develop a desire to become debt-free.”

Hambrick wanted to not only rid himself of the burden of $100,000 in debt but also start a family, volunteer, travel, quit his job before retirement age, and start his own business. By age 40, just 10 years later, he accomplished his goals.

5 tips for getting out of debt quickly (and pursuing your dreams)

Here’s how the determined father became debt-free, grew his family, and started his own company — as well as his advice for how you can do the same.

1. Consolidate your debt

Hambrick strongly recommends getting as much financial aid and scholarships as possible to pay for college and graduate school. But if you already have debt, you should consider consolidating your student loans.

“When I graduated, I actually had two different loans at different interest rates, and I found that I could consolidate them at a lower rate,” he says. “So I did. This not only helped save money on interest, but I only had to make one payment toward them each month instead of two, making it more efficient.”

You might be able to refinance your student loans at a lower interest rate and decrease your monthly payment. Things also won’t seem so overwhelming since you’ll only have one payment.

You can use our student loan consolidation calculator to see how much you could save and shop around for different companies to find the best rates.

2. Consider paying more than the minimum

Don’t prolong the agony of having school loans by paying only the minimum. Hambrick’s advice? Try to double the payment every month.

“You can make simple lifestyle changes,” he says. “Rather than getting a lease on the latest 6 Series BMW, buy a used car and put the difference towards your school loans. Also, put any bonuses and tax returns towards outstanding debt. This will make it come down quickly.”

If you have $25,000 in student loans at a 6.00% interest rate and make monthly payments of $280 a month, you’ll pay off the debt in 10 years. By doubling that payment, you’ll have the loan paid off more than five years early and save almost $5,000.

Use our student loan prepayment calculator to find out how fast you can pay down your debt.

3. Adopt the debt snowball method

Popularized by author and radio host Dave Ramsey, the debt snowball method is a debt-reduction strategy that focuses on putting more money toward one debt while paying the minimum on other loans (e.g., car loans or mortgages).

“I focused on paying the student loan first by paying as much as I could towards it, including any money from bonuses or tax refunds,” says Hambrick. “Once the school debt was paid off, I took all the money that was going to the school debt each month and paid off the second mortgage.”

With the snowball method, you start by listing out all your debt — school loans, car loans, credit cards, mortgages, etc. — from the smallest balance to the largest. Once you’ve done that, you target the smallest loan amount to pay off first and build momentum from getting that first loan out of the way.

The money that was going to the smallest loan is then applied to the next one and so on.

Some argue you should pay off the balance that has the highest interest rate first, which is called the debt avalanche method. This does save you some money on interest but doesn’t provide the mental boost of getting a loan off your plate.

4. Cut your expenses

You might want to live the American dream, but living beyond your means could spell a life of debt and squash your future goals.

“Not only did I have that cheese dip realization, but I also sat down and realized that in 10 years I didn’t want to work in the corporate world anymore,” says Hambrick. “So, my wife and I set out to save $2,000 per month to make it a reality. This required cutbacks and a bit of minimalism.”

Hambrick and his wife drive used cars they bought with cash, didn’t buy a bigger house despite increasing their incomes, and don’t go out to eat much.

When the time came for Hambrick to leave professional services firm EY and start his own company, he could do so because he wasn’t drowning in debt.

Do an inventory of your expenses. Where can you cut back? Can you live in a smaller home? Can you cook more? Can you skip buying your morning coffee?

Then take all that money you’re saving by reducing your costs and put it toward savings or paying off debt. This will help with your short-term and long-term financial goals.

5. Plan for future costs

Getting out of debt is a balance between making immediate changes and accounting for future costs or goals.

“When my wife and I found out we were having a baby, we took out a loan to buy a used SUV,” he says. “We knew that when the baby was born in 10 months, we would need to pay approximately $1,800 [for] day care each month. So we figured, why not start feeling the pain of the day care payment early?”

So, nine months before their son was born, Hambrick and his wife started paying $1,800 a month toward their car. By the time the day care payments started, their car was almost completely paid off and they were already used to the monthly payment.

By doing both parts of the equation, you not only reduce your immediate debt but also won’t feel as stressed when you have new living expenses.

Obviously, there are unforeseen costs, such as medical emergencies. But with this approach, you should already have a savings system as a backup.

Don’t wait for your cheese dip realization

As simple as it sounds, Hambrick believes it all comes down to spending less than you earn and saving or investing the difference. It might take some effort upfront, but once you’re in a routine, the debt will melt away.

Using these tips, Hambrick had the opportunity to create his own path and live without the stress of debt hanging over his head.

His new goal is to educate others (particularly children) on the basics of personal finance and teach them to set the foundation for a life of personal freedom, happiness, purpose, and impact.

Interested in refinancing student loans?

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1 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student Loan RefinanceFixed rates from 3.999% APR to 7.804% APR (with AutoPay). Variable rates from 2.480% APR to 7.524% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.480% APR assumes current 1 month LIBOR rate of 2.07% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (

3 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.72%-8.17% (2.72%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% – 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit We also have several resources available to help the borrower make a decision at, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Average savings based on 18,113 actual customers who refinanced their federal and private student loans through our Education Refinance Loan between January 1, 2017 and December 31, 2017. The calculation is derived by averaging the monthly savings of Education Refinance Loan customers whose payments decreased after refinancing, which is calculated by taking the monthly student loan payments prior to refinancing minus the monthly student loan payments after refinancing. The borrower’s savings might vary based on the interest rates, balances and remaining repayment term of the loans they are seeking to refinance. The borrower’s overall repayment amount may be higher than the loans they are refinancing even if their monthly payments are lower.
2.57% – 5.87%Undergrad
& Graduate
Visit Earnest
2.80% – 6.38%1Undergrad
& Graduate
Visit Laurel Road
2.48% – 7.52%2Undergrad
& Graduate
Visit SoFi
2.47% – 7.99%Undergrad
& Graduate
Visit Lendkey
2.57% – 6.65%3Undergrad
& Graduate
Visit CommonBond
2.72% – 8.17%4Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.