I am so happy to announce that I have officially paid off all my loans! For someone who took Financial Peace and recognized the thrill of being debt free I feel extremely accomplished. Maybe you’re not on the Dave Ramsey bandwagon, and that’s totally cool. (I know, all of what he teaches is not for everyone. But it certainly has been for me with over $30,000 in debt). However, we can probably all agree that to pay off student loans in under 5 years takes a little bit of motivation and direction. I wanted to provide a few tips with you on how I personally paid off my loans in 5 years and how you can work towards that goal to!
Tips to Pay Off Student Loans
Paying off your students loans is a lot of hard work. It requires money (duh) which means a job and saving is key. I 100% understand that not all jobs pay the same and not everyone will take the same journey I did. However, if you want to pay off student loans fast, life adjustments need to be made. That means less eating out, less clothes shopping (this was so hard for me!), and saving on the cost of living as much as possible. Here are just a few things I did to help me spend my money wisely and get rid of those pesky loans.
- Talk about your financial goals with others : You may not think this is important but its so important. Contrary to popular belief, cheerleaders aren’t just at sporting events to look pretty. They are motivators and encourages. So find yourself some cheerleaders! My parents and my boyfriend have been HUGE cheerleaders for me throughout the process. And who knows, those cheerleaders might even go the extra mile and start playing the game with you too.
- Create a Budget : This will help you see exactly what your money is going towards. Even if you write out all your expenses from last month it will show you just what you spent. Every dollar that’s not going to your cost of living (aka bills) should really be put towards your student loan. This is called a $0 budget and I plan on continuing to use it to save up money fast. (Trust me, this is a lot easier said than done. Use those cheerleaders to your advantage!)
- DON’T stash that cash : Say whattt? But what about savings, what about cushion, what about a PANDEMIC. All fair points. I’m not saying don’t have emergency fund (as Dave Ramsey would call it). However, there is no use putting money in savings if you still have debt. I promise, your interest on the debt is a lot higher than it is on your savings. Don’t owe thousands more dollars on interest because you just wanted to see a nice number in savings.
Ways to Save
These are just a few ways that I saved myself money while paying off my student loans. Again, it might not exactly work out the same but these were game changers for paying off my debt!
- Cost of Living : I lived at home for quite a few years to save on paying rent and other expenses (electricity, internet, water…) My parents we generous and I didn’t pay a cent while living at home. If you decide not to live at home I highly recommend getting a roommate if it will make it cheaper (most times it does). Once I decided to move out, my boyfriend and I had already had the discussion and made the agreement that, whoever still had debt, would only pay their debt. Well guess who still had debt? This girl! Michael has taken on all the financial burden of paying for our place. I am so so thankful. I know I am one in a million to find a guy like this. Clearly this is an above and beyond roommate, but seriously, get a roommate. Even if you end up hating them remember how much faster you’ll pay off your debt and be able to 100% afford your own place by yourself!
- Buy Used, not New : What do I mean by that? If there’s something you have to have, try finding a used item in good working condition. Whether it be a bike, a car, or heck, even clothes! Many of the clothes I’ve gotten while paying off my debt have been from selling and buying on Poshmark. The best part is, I only used Posh credits to buy stuff, so it was basically like getting it free. Really this blog should say “Brought to you by Poshmark” because so many outfits were created just from that.
- Pick Up the Odd Jobs : Luckily I didn’t have to do this for too long. I was unemployed for a short 3 months and had to pick up some jobs. Most prevalent was babysitting. This allowed me to still make the minimum payments on my loans. Of course, had I chosen to keep at these jobs once I was employed again I’d probably have been debt free sooner.
Bottom Line for Paying off Loans
I am in no way a financial adviser. Obviously, what works for one person might not work for everyone. However, I do hope these tips at the very least got you thinking. You can absolutely conquer that student debt! And you can do it much sooner than you think. Just imagine all that you can start saving for once you don’t have anymore monthly loan payments. I certainly have. What’s next for me? Weekend trips to friends? A Mediterranean Cruise? A new car? (Ok, ok, Michael get’s that next). The possibilities are endless.
