Personal finance

How One Veteran Paid Off $70,000 in Debt in Just Three Years

Gennitha McLeod

When Gennitha McLeod left the military in 2010, she wasn't sure how to use her veterans benefits or manage her money.

She'd been affiliated with the military since she was 19, first as a military spouse and later during a four-year stint in the service as a private first class.

After years of bad financial habits, paying for surgery, going back to school and raising six children, she found herself with more than $110,000 in debt.

"I got tired of being in debt, tired of the rat race, tired of making payments" she said. McLeod, 41, who is now a nurse practitioner, realized that she needed to pay off the debt before she could seriously work on her next goal of opening her own clinic in Anniston, Alabama.

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She knew she needed help, so looked for services that worked with veterans. Eventually, she found Money Management International, a nonprofit credit counseling and debt management company that has services specifically for veterans. She decided it was a good fit and worked with the company on about $70,000 of her debt.

She paid it off in three years, while simultaneously working on the other $40,000 in debt she carried. Today, she's down to the last $2,400, with the goal of being debt-free by the end of the year.

"It really gave me a different perspective on what a dollar means," she said.

Veterans and debt

Veteran families grapple with financial wellness — about 50% have less than $500 in emergency savings, or have no emergency fund at all, according to a 2019 survey from the Military Family Advisory Network.

At the same time, nearly 80% of military and veteran families said that they carried debt, with the highest balances being homes, credit cards and vehicles.

Transitioning from being in the military to civilian life can be especially difficult for families and lead to debt.

"In the military, all of the things having a major financial component are pretty well handled," said Tara Alderete, director of enterprise learning at Money Management International, adding that when this support is gone, veterans sometimes struggle to manage their money.

Having debt brings with it a lot of financial stress for veteran and military families. Some 30% said that financial stress was detrimental to both their mental and emotional health, while about 14% said it was damaging to their relationships.

"Layer that with regular mental health issues that military folks are facing, and it is extremely overwhelming," said Alderete.

Debt management

For those who feel in over their heads with the amount of debt they have, seeking help such as a certified financial planner, a financial coach, advisor or a debt counselor can be a huge benefit.

Debt management services especially help mitigate the repayment process and work with individuals to lower interest rates on their loans, potentially saving them thousands of dollars over time.

Over the three years that many veterans work with Money Management International, some save well over $10,000 by having lower interest rates on debts, according to the company.

The ease of consolidating multiple debts into one payment is also helpful for some, as it makes the repayment process much simpler.

Other ways to pay off debt

Of course, working with a debt management company means that you'll pay a fee to the firm for its help in consolidating what you owe and negotiating rates with your creditors. For example, Money Management International charges a monthly fee to clients, which is calculated before they sign up to work with the company.

It is also possible to manage your debt on your own, and negotiate lower interest rates with creditors. Many people use strategies such as the avalanche or snowball methods, and are able to successfully get out of debt without any paid help.

Of course, repaying debt on your own can require a certain level of financially savvy and discipline. Some may prefer to have extra help along the way.

For Sandy Wilsnach, 52, the $50 monthly fee she paid to work with Money Management International was well worth it, given the amount of money her family ultimately saved. Working through the process with professional help also meant they got a crash course in personal finances and learned how to better manage their money going forward.

Sandy Wilsnach, left, and her husband. The couple just bought a new home after paying off $37,000 in debt.
Sandy Wilsnach
Sandy Wilsnach, left, and her husband. The couple just bought a new home after paying off $37,000 in debt.

"The thing that my husband and I realized is how much we were actually dependent on credit cards," said Wilsnach, who served in the U.S. Navy for five years and now lives in Baldwin, Wisconsin. "When we didn't have them anymore, we had to make some serious life changes.

"We had to learn how to budget and to stick to it."

She and her husband paid off about $37,000 in loans in about three years. With the debt paid off, they were able to use a VA loan to buy a house in June of this year.

"We knew that eventually our end result was that we wanted to buy a house and that is what we did," she said.

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