I was fortunate enough to attend a private university and complete a Bachelors and Masters Degree in four years. However like a majority of students graduating from college, I was quite unfortunate to end with a huge amount of debt. To add insult to injury, I became a teacher (which I love being by the way) but knew that my salary would inhibit my ability to pay off this large amount of money in a decent amount of time. It was an extremely depressing and frustrating thought that I wouldn’t be able to fully live my life the way I wanted to because I was so wrapped up in a crippling amount of debt.

After three years of only being able to make interest only payments, I decided that something had to give. I came up with a “master plan” to outline what steps I would have to take in order to pay off my student loan debt.

paid sallie mae 24000 in one year

How I Paid Sallie Mae 24000 In One Year On A Teacher Salary

Now I know this plan can’t work for every single person exactly the same, but the basis of the plan can be altered and adjusted to fit everyone’s financial situation. I was fortunate enough to be able to go back home after college and live rent free with my parents. Now… many hear rent free, and think I was getting a free ride. Wrong! I had to supplement my “rent payments” by paying other smaller bills in the household as well as my private and federal school loans. Per month I was paying about 1,200 dollars in bills, taking up one of my checks for the month entirely. This left me with 1,200 dollars to save, food shop (light food shopping mostly for lunch), put gas, and “have fun”.

I knew I wanted to save, and that I had to find a way to make extra money. I also knew that I would have to curb my spending greatly to keep my bank accounts looking the way I wanted them to look. So these were the steps I took in my master plan to make sure I could do all of the things I wanted to do responsibly while also making a dent into the principal of my loan balance.

1. Save 1,000 a month: Now this amount isn’t financially possible for everyone, but for me I knew that I had to go big or home. Saving 12,000 a year is about 19% of my salary and is a pretty big amount. But if I wasn’t saving that amount I know I’d be spending it on something frivolous. There are months when emergencies occur making it difficult or impossible to put that money aside, but I try my absolute best to make sure that it gets done. 99 % of the time I am able to put that money aside. It not only becomes my emergency fund, but it is also how I make aggressive principal payments (see step 4). I also add in extra money from time to time depending on circumstance (i.e. Tax time or over time). The trick is to choose an amount that is doable for you in your budget, and to stay consistent.  You’ll see that number rise rapidly, but be sure not to touch it for random purchases. Only emergencies!

2. Earn Extra Income: In order to consistently be able to save the same amount or more a month I knew I would have to hustle a bit to make extra income monthly, just to cushion my expenses. I started doing overtime/summer school at work to start off my hustle towards extra income. I then turned my sites online and towards my phone. I spend a great deal of time on my phone and on the internet, just simply due to my blogging life. So I started looking into ways to earn cash doing what I was comfortable doing, and already doing.  I became a virtual assistant and social media marketer through Fiverr, looked into dog walking through Rover but also wanted some simple ways to make extra money that wouldn’t take up too much of my time. My biggest sources of  online/ smartphone extra income have come from: Ebates, Receipt Hog, Ibotta, ShopKick, Snap, and Panel App .

10 Ways Your Smartphone Can Earn You Money
10 More Ways Your Smartphone Can Earn You Money

3. Decrease Spending: There are two seasons during the year that I just can’t seem to stop spending no matter how hard I try. That would be the summer season and Christmas season. And every time the Fall starts, or January comes around I seriously regret all of my purchases. Because there is pretty much nothing I can do to decrease my spending during those times, I decrease my spending to almost 0 during the Fall, and months leading up to the summer. That means I do not purchase anything for myself (outside of grocery shopping), and I limit my outdoor activities such as movies, eating out…etc. In doing this I give myself and my credit card an opportunity to recover and save more money. If you have better self control than I do, I recommend trying to limit spending to one season if any season at all. That is what I am going to be trying to do in 2016 as I increase my saving level as well. I’m going to attempt to save 17,000 this year instead of the average 12,000.

4. Pay Principal Aggressively Once A Year: I’m a teacher which means I’m destined to live a meek meager life for the most part. Again I love teaching… but I’m not living in a fairytale land either. I know my career choice means making 6 figures will take some serious skill and know how as well as overtime hours. I can’t afford to pay the principal of my loan aggressively throughout the year because I have other bills to pay. Instead I pay one huge amount at the end of each year before the payment amount increases in January. (I’m on a graduated repayment plan of sorts). So instead of waiting for the monthly payment to increase, I drastically decrease it myself. This step as well as my extreme saving habits is the leader in how I’ve been able to pay off 24,000 to Sallie Mae in just one year. In December 2014 I made my first big principal payment of 13,000 from my savings account. I spent the next twelve months adding back in that 13,000 and then some. When this past December rolled around it was time to make my next lump sum payment of 11,000. How did I decide on these amounts? I went after the loans with the highest interest which caused the highest monthly payment. Now all of my loans are under 8% interest (the first two I paid off were over 13% they had to go!). Now I’ll be going for the next highest amount in December 2016.

5. Continue paying extra payments : What I’m going to start doing in 2016 that I didn’t do in previous years is to continue using the extra money I’d save from the lower monthly payment, and add it towards the principal of another loan. This way I’m paying the principal during the year as well as my lump sum payment every December. In doing this step I’m hoping to decrease the 5 year sentence that Sallie Mae has provided for me. Since you are already accustomed to that amount of money leaving your possession keep doing so. The other option is to add that money directly into a savings account to help with your lump sum payment. But you absolutely certainly do not want to start spending that money on something else. Keep that money in the loan family in order to help pay off your loans faster.

With this master plan I’ve chunked away at a good bit (trust me I still have a large amount of debt left) and have set up a practical timeline for myself to pay of the remainder of the amount. If I continue with this plan I will be finished with my private loans in three years, and done with my federal loans in 5. Now I hope to be finished earlier than five years from now since I would at some point in the next five years like to settle down, move out of my parents’ home,  become a property owner, and start a family without the fear of crippling student debt making that all impossible. But I find a five year plan much more comforting than the 25 year plan that Sallie Mae so graciously placed me on.

I’ll be attempting to save an extra 5,000 dollars this year! If you’d like to join this challenge with me to put a dent in your debt, or a down payment on a car…etc. Click Here and register for the challenge! 


FTC: This post is not sponsored however does contain affiliate links that I earn a small commission from. My thoughts and opinions are my own.

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3 Responses to How I Paid Sallie Mae 24000 In One Year On A Teacher Salary

  1. Why wouldn’t you enroll in Income Based Repayment and then, in ten years, get a full discharge under Public Service Loan Forgiveness? All this money should have gone to a.house or Roth!! I pay a TON of taxes– paying off teachers’ school loans is one of the things we should all happily pay taxes for!!!

    • Hello Robin thanks for stopping by. Believe it or not I make too much money to be enrolled into the IBR and Public Service Loan Repayment is only available for federal loans. The loans I have paid off and discussed in the post are private loans in which that is not an option. I’ve looked into all of these options in detail!