How a millennial couple went from $750,000 in debt to being on track to retire in their 40s

• Disha Spath and her husband went from $750,000 in debt to an over $1 million net worth in a few years.

• They embraced the FIRE movement, cut spending, invested aggressively, and paid off loans.

• Spath and her husband are on pace to retire in their mid-40s, though she’s unsure if she will.

Disha Spath, 38, and her husband were about $750,000 in debt a few years ago and were spending above their means. Now, they have a net worth of over $1 million and are set to be able to retire by their mid-40s.

Spath, who runs the blog The Frugal Physician, said she wasn’t a natural saver, noting she made financial errors like taking out too many student loans or being quick to make large purchases. But after having two kids and shifting between jobs, she realized she needed to turn her finances around.

She and her husband absorbed as much information about the FIRE — financial independence, retire early — movement as they could, cut back spending on daily purchases, invested more aggressively, and paid off her student loans through savings and work bonuses. She and her husband paid off their debt by 2021, and they’re now slowing down their journey toward retirement so they can enjoy time with their kids without making huge financial sacrifices.

“I just want a balanced life and to not feel like I’m tied to my job,” Spath said. “Instead of racing to financial independence, we’re trying to get more balance.”

“Overdoing” purchases

Spath said she grew up in a financially strained family. She moved to the US with her mom and sister at 10 with almost nothing to her family’s name. Money was always short, but her mom encouraged her to work as hard as possible and save whatever she could. She grew up thinking that investing was something only rich people did.

She received scholarships for her undergraduate degree and got into medical school. She eventually landed a job in primary care and internal medicine, which she acknowledged wasn’t the highest-earning medical specialty but was still a good salary. She was the sole breadwinner for a few years while her husband was still in school.

“I thought that that salary would be enough to create a very comfortable life for us,” Spath said. “But I quickly found out that it’s very easy to feel like you’re living paycheck to paycheck, no matter what amount you’re making, if you inflate your lifestyle too quickly.”

Her student loans from medical school were $191,000, according to financial documents shared with BI. While a medical resident, Spath and her husband — an Army first lieutenant — moved to Nashville and bought a home for about $142,000 using a VA loan.

They eventually converted the home into a rental property for passive income, which allowed her to pay off her student loans quicker. Her first job out of residency paid over $200,000 a year, but Spath said she made another potential financial mistake — they bought a $350,000 home in an upscale gated community in Savannah, Georgia, which she thought they “overdid.”

“We bought into the idea of the kind of lifestyle we were supposed to have at the income that I was making, but that lifestyle felt very uncomfortable,” Spath said. “It felt like we couldn’t afford it, and I was really worried we weren’t going to be able to make progress on our retirement or our savings.”

Her student loan total grew to $237,000 with interest, factoring in the $25,000 she paid after tutoring during her residency. She and her husband also had $40,000 in car loans, $335,000 in house loans for the Savannah home, and $130,000 in loans for the Nashville home, according to documents shared with BI. Even though her job paid well, she had to take unpaid maternity leave for a few weeks when their first child was born.

Joining the FIRE movement

In May 2017, when their net worth was negative $250,000, she discovered the FIRE movement, which gave them advice on how to better budget and invest in the future. However, Spath discovered that not all FIRE strategies were “sensational investment strategies.”

“It’s not stuff that’s bringing 30% returns or anything like that,” Spath said. “It’s slow and steady investing in time-proven strategies — get rich slowly, basically.”

She and her husband started increasing the amount going toward loans, then backfilled maxing out their retirement accounts.

The family moved from Savannah to upstate New York — where the cost of living was slightly higher, she acknowledged — to be closer to family who could help them with their young kids. Instead of purchasing a home, they rented at first to “deflate” their lifestyle and avoid taking out more debt. Eventually, they moved to a home near the hospital where Spath worked for $100 a month less than their Savannah mortgage with no maintenance costs.

She said her kids, ages 9 and 7, motivated her to improve her financial situation. She set them up with savings and checking accounts, investment accounts, a Roth IRA, and a 529. She’s taught them how to invest money they earn through chores, and she said her son just saved enough to buy an iPad.

They prioritized a high savings rate as their kids got older. For their family of four, they spent about $800 a month on groceries and rarely ate out. Changing their lifestyle was initially frightening and “somewhat invalidating,” she said, though she knew she couldn’t compromise on costs like daycare for her kids, which ran over $2,000 a month.

“Especially for physicians, the stability of our jobs is quickly disappearing, so it’s very important in medicine to have a financial cushion and some sort of financial independence,” Spath said.

The couple adopted strategies such as eating out less and cutting hair at home. They increased their student loan payments to $7,000 a month, and she put her productivity bonuses and extra income from a new job to pay off her loans. They paid off over $100,000 in six months by July 2018 while also moving to a nicer home.

Two years ago, once their debt was quashed, they accelerated their investments, including in real estate. She said they became much less afraid of investing their money for the long term.

“I’ve been able to cut back my work hours, and I’ve taken pay cuts to do so,” Spath said. “It has empowered me to feel comfortable doing that, and every time, my total income doesn’t change because usually, I fill up my time with other things that end up making money.”

Their net worth is now over $1 million, and she said they’re both on track to retire by their mid-40s — though Spath may not want to, as she’s had her love for medicine reignited. They have become less frugal over the last two years.

“When I first got into the FIRE movement, I was working so much and feeling so burnt out that the retire early portion seemed very attractive,” Spath said. “But we’ve been able to take our foot off the gas a little as far as frugality goes and become more balanced in our life.”

Are you part of the FIRE movement or living by some of its principles? Reach out to this reporter at [email protected].

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