Liz Weston: Go nuclear on your debt - move away

Ken Ilgunas paid off $32,000 in student loans two and a half years after graduation — starting with a $9-an-hour job.

With zero job offers in his chosen field of journalism, he instead moved from Wheatfield, New York, to Coldfoot, Alaska, a truck stop and tourist camp north of the Arctic Circle, so he could put every possible dollar toward his debt.

Every possible dollar meant virtually every dollar. His job as cook, maintenance worker and tour guide provided room and board. What Coldfoot (population 10) didn't provide was places to spend what little he was making.

"I had literally no bills other than my student loan payments," Ilgunas says. "I was able to send $18,000 toward my debt that first year."

People who are passionate about paying off debt find plenty of ways to do it that go well beyond clipping coupons, turning down the air conditioner and consolidating their debts . Some free up money by tackling most households' biggest expense: the cost of shelter.

After the tourist camp job, Ilgunas lived in a tent for a while as a ranger for the Gates of the Arctic National Park. He paid off his debt two and half years after his 2006 graduation.

"I wanted a really free and adventurous life, and I knew I couldn't have that life with debt," says Ilgunas, 33.

His experiments in rent-free living went so well that he moved into a van so he could attend graduate school without taking out more loans and then wrote a book about it, "Walden on Wheels." Ilgunas, now a seasonal park ranger, lives in a house in Stokes County, North Carolina, "with electricity and Wi-Fi and everything."


You can't get cheaper than free. But when a relative offered Chicago residents Aja and Kelvin McClanahan a home he had inherited and didn't want, they turned it down initially because it was in one of the city's most dangerous neighborhoods, Englewood.

"If you looked at the statistics, Englewood was at the top. Extreme poverty, urban blight, homicides, teen pregnancy, tuberculosis, all of it," says Aja McClanahan, 37.

The McClanahans had made progress in paying off $120,000 in student loans, medical bills, credit card debt and a car loan — mostly while living rent-free in Aja's mother's home. They longed for their own place and hoped to avoid a mortgage. And Aja wanted to be a stay-at-home mom and home-school their two small children.

So they kept talking about the Englewood house. "We could be so much far ahead with retirement savings, with college savings" by moving into the house, Aja says. "We didn't see another way to get as firm a financial footing."

Plus, they had friends in the neighborhood: "hipster" types who had moved there for the cheap housing.

"People live here. They didn't die," Aja says she reassured herself.

In 2010, the family moved from the suburbs into the house with bullet holes in the back door. They spent the first night listening to sirens, barking dogs and their own doubts about their decision.

Seven years later, they're still there and debt-free. The area hasn't gentrified, but it has improved, Aja says. Kelvin's job as a postal carrier supports the family comfortably, giving them time to travel and volunteer at local schools and nonprofits.

"I feel like we have a high quality of life," Aja says.


The McClanahans may have felt like they moved to a different country, but Frank Thomae and his wife, Lissette, actually did — and dramatically reduced their housing expenses.

In 2013, Frank was planning to travel full time after he lost his job as the chief financial officer for a Canadian importer. Lissette planned to work remotely as a marketing director. But then the couple was saddled with $46,000 in unexpected bills for expensive dental work, a bad business investment and remodeling overruns on their Montreal condo.

Rather than putting off their travels, they relocated overseas. They rented out their condo for $1,850 a month while paying $500 monthly rent in Prague, Czech Republic, and then $300 in Nong Khai, Thailand.

"We saved more money than when we were at home," Thomae says.

Two years after leaving Montreal, they were debt-free. They recently signed a one-year lease in Croatia. Eventually, they plan to find a more permanent home: It will be abroad.

"We've both just turned 50 and neither of us wants to go back to Canada or the U.S.," Thomae says. "We always want to travel."


This column was provided to The Associated Press by the personal finance website NerdWallet.

Liz Weston is a certified financial planner and columnist at NerdWallet. Email: Twitter: @lizweston.


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