My Secret For Paying off $30K in Student Loan Debt

When I finished graduate school I owed $30,304.87 in student loan debt. Curious about how I got myself into that mess? I wrote about it here: Student Debt Denial and here: My $30,000 Student Loan Mistake.

Before I started graduate school I had accumulated $20,000 in undergraduate student loan debt. Fortunately I had some sense (you were starting to wonder right?) and was able to pay for most of my graduate school education with part-time jobs and money I’d saved working before graduate school. I’d also paid off about $5,000 of the principle on my undergraduate loans in the two years between undergrad and grad school.

Frustrated with the $350 a month loan statements that kept popping up in my mailbox, and the realization that I’d be paying $11.5K in interest if I paid the loans back over their, “normal” term (10 years!), I buckled down and paid off the remaining $25,000 in student debt in just under 2 years.

Often, peers who are still in student loan debt, ask me how I did it? Well… here’s the secret: There is no secret, shhh! I lived frugally, worked hard, and sacrificed doing, the, “fun” things that my friends were doing (going on vacation, buying new cars, buying new clothes) for 2 years, so I could aggressively pay off my debt. Here’s what that looked like:

1. I took my first post-masters job ($42,500) then worked really hard and got promoted into management (= a better salary). **Yes I made more with the promotion, but I still would have been able to pay off the loans in 2 years, had I not.
2. I made a strict budget and stuck to it. If it wasn’t in the budget I didn’t buy it-Simple, right?
3. I broke down my debt so it was manageable. $25K is terrifying,  $12,500 per year for 2 years or $1041.67 per month felt more, “do-able”.
4. I moved in with a roommate (the bf) so we could share rent and expenses. As you see above, my portion of the rent was $900. Bf was kind enough to pay the electric and Internet bills. I paid for grocery and household items.
5. I started cooking our meals at home to save money and I started couponing to buy our toiletry products and paper goods, you’ll notice my grocery budget was pretty minimal thanks to my couponing. I swear we ate real meals and not just pringles and granola bars. “Real” food is actually cheaper then processed junk food, is better for you and lasts a lot longer-you can eat a whole chicken for at least 3-4 meals.
6. I didn’t buy a car. Don’t you know when you finish your degree you’re supposed to buy a new car? Side note: I had a car before grad school but sold it because I didn’t need it and didn’t want the hassle (Parking in NYC is a nightmare and really expensive). Plus an added bonus, I used the money from the sale of the car to pay for my rent and living expenses one semester.
7. I worked extra jobs (any work I could find! Beggars can’t be choosers-babysitting, dog walking, freelance writing, online surveys, beer rebates, you name it, I did it) That income was not accounted for or included in my monthly budget/expenses above.

That’s really it, I didn’t sell my soul to the devil, or sell drugs to children, or become an escort-not that I’m judging! I just worked really hard and made, “good” financial decisions. There’s no secret or magic bullet. Believe me if there was I’d bottle it and become a millionaire.

Have you paid off a substantial amount of debt? What was your “secret”?

Image: StockMonkeys.com