Hello! So today’s blog is really exciting! As you can tell from the title, I’m talking about student loans, everyone’s favorite! So if you’ve read my About Me, you’d know that I graduated from college back in 2015. What you may not know, but could probably assume, is that I acquired quite a bit of student loan debt. This past November, Robert and I decided that we would live a more frugal life and 2017 would be the year to pay off all of my student loan debt. Well… I had the idea, but he jumped on board. I love my supportive husband!
So before I share how I paid off $12,000 of my student loans in such a short amount on time, I want to add some context… and maybe a bit of a warning to those in college, or getting ready to start college in the upcoming months. The average student loan debt for graduates from a 4 year college or university is approximately $29,000. The average salary for graduates from a 4 year college or university is $50,000. If you’re living in a city, once you take out taxes and living expenses, it’s really hard to pay extra towards those loans and the interest will have you paying substantially more than principal of the loans. In my case, if I spent 10 years paying off my loans, I would be paying an extra $14,000! That’s insane!
So lots of people will say that buying an education, is like buying a car and that if you can’t afford it with out taking out loans, then you shouldn’t get it. I think if you have a plan for your life and the drive and desire and determination to do great things for yourself, then get the education you want! I’ve heard that it’s best to stay home for a couple of years and go to community college and transfer. That’s great if that works out for you and you want to do that, but it’s also important to state that sometimes you need to live life and expose yourself. Life is so much bigger than whatever town or city that your parents live in. Step out of your comfort zone and become a more well rounded person. But okay, I’ll step off my soap box before I get carried away. Just don’t be afraid to live life with a goal in mind.
Alright, whew! Got that off my chest! Ready for some tips!?
- So the first thing we did was plan out a budget. Based on our income minus our living expenses how much could we afford to send out the door every paycheck towards these student loans? We crunched the numbers and came up with $1,500 a paycheck. We probably could’ve done more, but we wanted to make sure we’d actually hold ourselves accountable to the budget we set. We didn’t want to overspend after paying towards the loan and then find ourselves in a hole. Also, if you’re interested in some easy budgeting tips, check out this blog I recently posted.
- The next thing we did (which was initially very unnerving, but soon after very exhilarating) was clear our savings account. So two things here: 1. We didn’t have a whole lot saved because we weren’t, at the time, abiding by our budget and 2. We did leave about 3 months worth of living expenses just in case. I have listened to Dave Ramsey and I know he suggest emptying your savings down to $1,000, but that just made us too nervous as we were already taking such a huge step. So do what you can at your own pace. After this step, we had cleared about $6,000 out of our way.
- Then, and possibly the most critical tip for having paid off so much in such a short time, we paid the decided $1,500 the DAY we got our paychecks. If you get paid and think, “Oh, I’ll just pay the amount right before my next check” you may not have the money when it comes to the end of the pay period. Set yourself up for success and take care of business first! By doing this we were able to pay off another $6,000 in 11 weeks.
One thing to note is don’t worry about trying to save money while you’re paying off these loans. If you can maintain the focus and pay off your student loans as soon as possible, then you can turn around and save money the same way.
It’s been really exciting to know that in 11 short weeks we were able to pay off $12,000 of student loans. It makes us even more excited and dedicated to paying off the remainder. Based on our calculations, we should be completely done paying them off by the end of the year.
I hope you find this helpful if you’re trying to pay off your own student loans or personal debt or even if you’re trying to save money. I’ll be posting more updates on how we’re saving money and ways we’re knocking out this debt! If you’re interested in reading more, please subscribe in the sidebar on the right and you’ll be first in the know!
Thanks so much for reading!
From Taji, With Love