FTC: This post is not sponsored. All weird thoughts are my own.
Well Well Well… if you have found yourself yet again at one of my frequent student loan talks… welcome back. If this is your first time, pull up a seat and stay a while. I’m going to break down for the third time how I’ve managed to make a huge dent in my student loan amount, and how I’ve done it in a fairly decent amount of time.
If you do a quick Google search you’ll find tons of people.. particularly bloggers (side eye) who have paid off large amounts or the entire amount of their student loans in 6-12 months. And while I find that remarkable and definitely have a deep found respect for them… this isn’t that kind of party. While their many of their methods I too share, this for me (and it may very well only be for me) is a way more realistic approach.
I enjoy traveling, and as much as I try not to, I do often times spend way more liberally than I should (judging by the four figure amount I’ve spent between Thanksgiving and now… way way way too liberally). I’m also on a teacher budget so, pretty much… I’m broke most of the time. Broke in the sense that… even when I have money it is just simply not to be spent. And with all of this going on… there is simply no way that I would be able to pay off 90,000 in one year. I don’t have that much will power, and determination.
So then what did I do to pay off 50,000?
How I Paid 50000 In Student Loans In Three Years
1. Make large payments on that m%$#@%&#@^%g principle: I made a post on the Millennial In Debt insta. In that post I explained how I took a 10,500 dollar loan in 2007 when I was just 19 years old. I graduated in May 2010 and started paying back the loan in December of that same year. After seven years of monthly payment, my unpaid balance was almost three thousand dollars more than what I had initially borrowed. The lender mapped out a plan that would have me paying the same loan until 2031 at a 9.25 interest rate.
I noticed this pattern on all of my private loans, and after kicking, screaming and crying about it for hours I decided to take action. Every year since 2014 I would save up 12-13 thousand dollars specifically to make one lump sum payment every December. This lump sum payment would not only handle the principle but would close out that particular loan account. In three years I have managed to close out four loan accounts (I started with the loans that had the highest interest rates- which wasn’t always the loan with the highest principle) that have amassed to over 45,000 dollars. My most recent feat was paying off the $12,516 and bringing that account from 35% to 100% done! I now have one loan account left open that I will be paying off in December 2018.
2. Make More Money– I know that is easier said the done… but here’s why it is important for you to hear me out on this one. In the previous posts where I have shared my routines and methods, I focused mostly on budgeting and saving. Spending less money, and saving more money does and will help you pay off your student loans quicker than if you weren’t. However… making more money can also do the same if not more and faster. This year I saved about 18,000 dollars. A 6,000 increase from what I normally/usually save on a yearly basis. How was I able to do that and still take a 3 week vacation?
I purposely made more money, and purposefully directed it where I needed it to go. And that by no means is easy, but it is doable with a bit of ingenuity and hustle. You want to make more money, pick up a side hustle or two, or 8! ( 8 Easy Side Hustles To Help Pay Off Student Loans )
I enjoy traveling so I have money saved for traveling. (Traveling the World As A Millennial With Student Debt) I have a dog and a car so I have money saved in case of emergencies for both. These three things non negotiables for me. What that means is I choose to require myself to put money aside for them. Now in doing that and aggressively saving to pay my student loan balance, that would leave me pretty ragged. By picking up extra shifts at work, using cash back services like Ebates, Ibotta or Receipt Hog, taking surveys and more I added to my income to give myself a little more wiggle room, even with all of the necessary adulting around me.
I will add that I live at home… so I don’t have to pay rent., which makes it easier for me than someone who has to pay to keep a roof over their heads. However I do cover most of the house bills in order to help pull my weight.
3. Look Into Loan Forgiveness Programs: Though there aren’t many (the internet would have you think other wise), there are programs that can help you pay off your student loans depending on your employment or living situation. I am an educator in a New York public school and worked in a Title I school for 5 years. This entitled me to 5,000 dollars towards my federal loans after I completed my fifth year of teaching.
There are other loan forgiveness programs that forgive the balance of your debt after 120 payments (10 years) if you work for the city. So at the end of 2018 I’ll be done with my private loans, and any balance I have left on my federal loans in 2020 will be forgiven as I complete my 10th year of teaching. Unfortunately I do not fit into the income based repayment plans, but if you do and also qualify for the loan forgiveness programs you may be able to milk the system a bit by paying less monthly, and having the balance handled at the end of your 10 year pay agreement. This step/tip may not work for all/many but it is something you should know/ be aware of.
4. Cut Out The Unnecessary: You knew this was coming… because it’s been on the list every year. This year I did far worse than in previous years. So I’m sharing this with you so you know that it is harder than I make it seem. As you’re reading this on your screens…definitely understand that even though I’ve successfully paid off a large amount of my student loans, I could’ve saved more and paid off more if I had just a tad bit more focus and determination. This year I maintained a gym membership, Apple music, and got my nails done more often than not during the latter part of the year.
You don’t have to cut out everything you love, because that will simply leave you miserable. Instead you really have to set up a budget and set up your non negotiables. I don’t go out to eat often, and have limited the amount of times I order in (pizza always has and always will be my greatest weakness). For me, keeping my gym membership and Apple music is worth more than heading out with friends to eat. So where I save there, I spend on myself. However I still don’t have cable or Netflix (over a year without either), and in 2018 I’m going to focus on more financially responsible outings with friends and family. I no longer get waxes every 6 weeks (but to be fair I did treat myself to Laser Hair Removal last year), and can do my own nails.
I’m also putting myself on a strict No Spend restriction during the week days for the first quarter of the year. This means Monday- Friday I won’t spend a single cent on anything!!
So there you have it… I hope I’ve helped you take one step closer to financial freedom or at least feel better knowing you’re not alone in this student loan debt madness. Feel free to join our Millennial In Debt newsletter where we share more money saving tips tricks and strategies. And if you haven’t already… be sure to check out our hilarious new Millennial In Debt Web Series, with new episodes premiering every Friday!
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Hey there! I’m Melissa, co-founder of Trials n Tresses, natural hair and beauty lover, binge tv watcher and lover of life. When I am not creating content for TNT, I’m busy teaching the future of society.