8/21/2020 Update: I actually paid off all of my debt! You can read more about how I paid off $20,000 of my student debt in a year here.
I managed to pay $9,000 towards my student debt 10 months out of college.
As soon as I graduated I made it a goal to pay off all my student debt in a year. Initially, I didn’t have a plan. I just wanted to start paying it off as soon as possible. In the beginning, I decided to go with the flow, pay off my loan with each paycheck I received, and most importantly, pay off more than the minimum. I tried my best to pay every month. Since I was fresh out of college with a big girl paycheck, I wanted to have some fun with my money. I worked so hard the past 4 years, so I deserved it. I had also planned trips for the year 2020 so a big chunk of my money went towards those trips. Obviously, that didn’t work out…
Now that we’re in shelter-in-place, I’ve had more time to review my finances. The money I received from my canceled plans have also helped to pay off more debt, allowing me to move closer to my goals. Although I won’t be paying off my student debt exactly a year out of college, I will be paying it off a little over a year out of college! If I stick to my plan, I’ll be student debt free in 6 months!!
My Payments
As always I want to be genuine and transparent on my blog so below are all of the payments I have made up until now.
As you can see, I was really sporadic with my payments. Honestly, it’s taken me till now to come up with a plan to stick to. I have paid off about $9,000 towards my student loans and $2,645 of that went towards interest. Thankfully, I have no more interest and payments from here on out will go directly towards my principal balance. In order to be debt free in 6 months, I will have to pay $1,800 each month towards my debt. That is my current plan I’m hoping to stick to. Now to the fun part.
Things I Did to Tackle My Student Debt
Live at Home
Living at home has been one of my smartest decisions for saving money. Although I help my mom pay for rent, it’s nearly as much as people pay living away from home. I’ve been able to focus more of my money towards my student debt and savings because of this.
Write Down Your Debt
Write down all of your debt and start building a healthy relationship with your money. Debt can include:
- Student debt
- Credit card debt
- Other loans/debt you may have (Car debt, etc.)
It’s daunting. I am not going to sugar coat it. I had a good amount of credit card debt coming out of college and that credit card debt continued out of college. It took me some time to be more responsible with my credit card debt. There were times where I was in the thousands. Yikes.
Writing my credit card debt down and seeing it next to my student debt was like a slap in the face. It’s like damn… if I’m more responsible with my money, I can pay way more of my student loans off. I decided to focus on getting rid of my credit card debt first. Although I wanted to pay off my credit card first, I was still paying a little bit of my student loans at the same time – my money was just more focused on my credit card. Thankfully, I no longer have credit card debt and can focus on my student loans… but that’s because I wrote all of my debt down by each other!
Check Your Bank Accounts Everyday
Ok. Maybe not every day, but make it a habit to regularly check all of your bank accounts. Continue building that healthy relationship with your money. By checking my bank account regularly, it helps me realize what I’m spending my money on. It also helps me figure out where I can cut my spending.
Choose Your Payoff Method
Debt avalanche or debt snowball method. Here is an article that explains the difference between the two strategies. Figure out which strategy works best for you. This helps to structure your plan. At first I was paying random amounts towards all of my loans, but in the long run it didn’t feel rewarding. The debt snowball method ended up working best for me. It’s more rewarding to see more loans disappear before moving on to bigger ones. That is a big factor in my motivation.
Start Paying Your Debt
Start paying your debt off. Paying off your debt can be a daunting task. So daunting that sometimes you choose to ignore it. Whether your initial payments are small or not, by starting somewhere it will motivate you to continue. Make that payment and stick to it! Pay more than the minimum if you can.
These are some things that helped me kick-start my student debt freedom journey. I hope this blog post inspires you and makes you feel less alone. I’m still figuring my finances out, but I hope that by writing these posts, it helps people realize that you can have a healthy relationship with your money. As I’m still learning, you will see me through it all – mistakes and everything! Let me know if this was helpful or not. I love feedback!
