How I Abandoned My Debts: Ben and Melissa Panter

In this series, NerdWallet interviews people who have overcome debt using a combination of commitment, budgeting, and smart financial choices. Responses have been edited for length and clarity.

Ben and Melissa Panter of Mount Laurel, New Jersey, have always been what Ben calls “above average savers” — they lived frugally and coordinated their schedules to avoid childcare costs. They ate out “maybe once a week,” he said. So when they decided to cut spending to pay off their debts, it was no easy task.

At the time, they had a large mortgage payment and Ben’s student loan balance was growing, even though they were making payments based on income. Ben, 33, is an adjunct teacher, freelance photographer and graphic designer.

Melissa, 32, who teaches part-time at a public school, says they weren’t focused on what they owed – isn’t everyone in debt? But when she asked their financial advisor when they should increase their savings for retirement, his response surprised her: “Once you’ve paid off your debt. The Panters hadn’t even added their debt at the time. [Editor’s note: NerdWallet advises saving for retirement while repaying debt because an early start is key to growing a sufficient nest egg.]

However, they had saved up and they had close to $30,000. They quickly paid off their $8,000 car loan balance, kept about $5,000 in savings for emergencies, and invested the rest in Ben’s student loans.

Then they kicked their frugality into high gear. They only went to the movies if someone gave them a gift card and stuck to homemade Christmas presents. The only exception: “We gave each other $50 Starbucks cards for Christmas,” says Melissa. “And we made those puppies last. We would order a large frozen drink to share and then get free refills.

Melissa says the family’s intense focus on buying exactly what they needed – and no more – is all the rage. Think minimalism and Marie Kondo for your finances.

A tight budget was “liberating,” says Melissa. She didn’t have to use her brain to decide which $10 foundation to buy from CVS, nor was she tempted into impulse buying. She and Ben wanted to get out of debt, period, and their already meager budget didn’t leave many obvious opportunities to cut.

They connected with NerdWallet to share their story, which may inspire your own journey to repay the debt.

It’s time to crush the debts

Sign up to link and track everything from cards to mortgages in one place.

What was your debt when you started your repayment journey?

Well: The round figure was around $127,000, mostly student loans and a car.

How did you end up in debt?

Melissa: Ben had outstanding debt from his undergraduate degree, on which we were paying the minimum payments. We wanted him to be able to teach at the university level, so he applied to several graduate programs. He loved a private art school curriculum, and honestly, we hadn’t even tried to figure out how much it would cost us. We just thought that was the next logical step for his career, and that’s what we were supposed to do. We also bought a car with a loan because we had heard that using “other people’s money” was a smart thing to do. We were so naive. We also bought a house that we couldn’t afford at the same time he was starting his graduate program, with next to nothing. Prices went down right after we bought, and we couldn’t sell. The mortgage payment was so high for us that it was difficult to reduce the debt.

What triggered your decision to start getting out of debt?

Melissa: Our financial advisor had gone through Financial Peace [the Dave Ramsey program]and he suggested it.

What steps have you taken to reduce your debt?

Well: We have a budget with no wiggle room [using You Need a Budget software].

Melissa: We have reduced our internet to just above base. We had no issues with our gears for under $60. We got rid of our insane cell phone bills by switching to Ting. We don’t use data – we just use Wi-Fi in our house, and free Wi-Fi is everywhere in our area. We have reduced our food bill to $200 per month. [They have since increased the food budget to $250 a month with a 7-year-old and a toddler.] The only vacations we took were related to the artist-in-residence programs that Ben received as a photographer. We were able to stay in Rocky Mountain National Park as well as Acadia National Park and a few others, while he had a “working vacation”.

Well: We stopped doing anything except mandatory contributions to pension plans [including not contributing to get a match].

Melissa: We still haven’t restarted it. We are trying to save 20% for a down payment on a house. Once we’ve done that, we’ll start contributing again. [Editor’s note: NerdWallet recommends contributing at least enough to get an employer match, even while repaying debt, because it’s free money.]

Significant or unexpected sources of cash that you have used to pay off your debts?

Melissa: Ben’s parents paid $100 a month from his student loan, just like they did for his older brother. It was a big help. Ben was also able to increase his income through more freelance work and another assistant position.

What would you do differently knowing what you are doing now?

Well: We might have sold our house very soon. We had an offer, but we should have put $25,000 on the table because we were underwater. We eventually decided to use the money to pay off other debts, but ended up continuing to spend a lot of our income on mortgage payments.

How is being debt free different?

Melissa: Getting out of debt is actually harder because you have more choices. It’s like, “OK, what’s a good way to spend?” Not having money or choices actually saves brain energy.

Well: Being debt free gives you freedom. We would rather have freedom — to be able to change careers, travel or whatever. We still have a budget. It helps you prioritize and know that the money is going to do the things you think are important.

How do you hope your children will benefit?

Melissa: I wrote and self-published a children’s book to help talk about it with our children. Debt is so prevalent that it’s important to learn early on to think about it in a countercultural way. The book is called “Piggy’s Peach Pie”, and it’s about a little piggy who gets into trouble when he promises his friends a peach pie before his peach tree has produced any fruit. We show our own children that debt is a trap and teach them the skills they will need to avoid it.

How to deal with your own debt

If the history of the Panters has inspired you to examine your own debt and design a budget, here’s how to get started:

  • Determine how much do you owe, and propose a strategy to repay it. The Panters chose thesnowball methodwhich means tackling the smallest balances first. You need to choose the strategy that will motivate you to stick with it.

  • Set aside or save an emergency fund. Unexpected expenses will happen, but they’re less likely to derail your debt repayment plan if you have money set aside for them.

  • Discover ways to make more money so you can get rid of the debt of your life faster.

Photo courtesy of Melissa Panter

Comments are closed.