I hit an important financial milestone about a month ago. In early May I made a hefty transfer of $1000 toward my student loan, and this payment pushed my student loan balance comfortably below $10,000. That means I have paid off $7,041 of debt in 7 months.
While getting my loan balance into 4-digit territory is an important milestone, I almost didn’t feel like it was totally worthy of celebration because I have totally been here before.
Let’s rewind three years. By early 2014, I had spent the last four years working overseas and, even though I was making it rain just about everywhere except my savings accounts, I was still smart enough to be throwing money at my student loans.
I managed to get the balance of my student loans from my undergraduate degree to around $3,000. I was this close to getting it paid off in its entirety…
…and then I went to grad school. And guess who took out more student loans? This girl.
It has been crazy frustrating to be shackled with piles of debt again, but I am coming at it with a few more years of financial mistakes wisdom under my belt this time.
And I am paying back my loans on a pretty normal income. I do make a good living. Full disclosure, it is higher than the median individual income in Canada. But I do not have the luxury of earning six figures (or let’s be honest, anywhere remotely close to that). I do not have the benefit of having a high-earning partner, or living at home with my partners, or one of myriad factors that often help people destroy massive, intimidating sums of debt super quickly.
I toyed with my budget so many times, trying to figure out how to find hundreds of extra dollars that just didn’t seem to exist. I simply did not have the disposable income to make huge payments toward my debt every month.
Or so I thought. Since going into repayment last November, I have averaged just over $1000 per month toward my debt. Seem crazy? It might be, but I think it can be replicated if you are tenacious and have sexy dreams about getting rid of these monthly payments for good.
Let’s walk through a few of the ways I did it.
HOW I DID IT
Upped my minimum monthly payment immediately.
In Canada, the federal and provincial government wants you to pay back your loan for the next 9.5 years. No freaking way. I am getting this thing gone in a couple years, and you can too.
Go up your monthly minimum payment, even if it’s only by $20. Pay a little more than you have to. Your framework of how much you can really manage to pay back every month will slowly start to shift, and you may find that you can even throw a little extra at it every now and then. When I changed my monthly payment to $500, it was a stretch for my budget. I really wondered whether I would be able to make it work for more than a couple months, and I thought I would have to lower it back down again to $400 or less. As it turns out, I have not only been able to put $500 toward my debt every month but way more. Rock on.
Side-hustled my face off.
Side hustling is an effin grind. I know some people love their side hustles. I do not. I have about four of them, and they are all okay. I freelance write, I grade standardized exams, I write standardized test exam questions, and I also do contract-based research. P.S. I also spend about ten hours a day getting to and working at my day job. Suffice it to say, I do not have a lot of free time. This is not my first choice, but this is a compromise I am willing to make for right now to get this debt gone. With my side hustle funds coming in at $2,824 in 2017 thus far, they are a huge part of the reason I have been so successful with my debt repayment.
Did not buy a car.
This one was a killer. In case you had any illusions about Canadian winters, walking and taking public transportation to work through a six-month-long Ottawa winter is no joke. It involved multiple layers of pants and navigating over mountain-like snowbanks. It also means that what could be a 15-minute commute in a car is a 45-60 minute commute by public transit.
Needless to say, there were many moments I was desperate to buy a car. That bus ride to and from work certainly gave me plenty of time to daydream about car ownership.
But not buying a car is the reason that my transportation expenses average a mere 6.6% of my monthly expenses. That frees up a lot of extra room that would simply not be possible as a car owner.
Used my money for other things, too.
We all know the story about so-and-so who paid off a bazillion dollars of debt in 17 seconds, but that’s just not my jam. Those stories are amazing and inspiring and have played a major role in my personal debt repayment journey. But there are so many other things I want to be doing with my money right now, too. Listen, I haven’t just been paying off my loans and buying boxed wine over the last seven months. I have also:
-Contributed to my retirement fund.That’s right, I’ve transferred about $1,500 to my retirement account in seven months. This is less than impressive to many folks. For someone who did not HAVE a retirement account until seven months ago, I am unreasonably happy with myself about this.
-Built up my emergency fund. Yes, I have all the mixed feelings about my emergency fund. But there are some possibly imminent changes coming up in my life, including a potentially expensive move to Vancouver…and mother of God, I am so glad I have suffocated my spendy side for the last seven months and not run off to Cuba with this money. My current and future self, especially any future version of me living in Vancouver, are already thanking me.
-Built up a travel fund of $800. To appease my aforementioned travel beast, I have also been tossing some extra moolah into a travel fund. There are lots of potential trips on the horizon and it feels so awesome to know that when the time comes to charge a plane ticket or a hotel stay, I’ve got it covered.
-Saved $700 toward a new laptop. The one I am currently tapping away on makes legitimate crunching noises. If anyone else has had this happen with a 6.5-year-old Macbook, please let me know what my future holds. In any case, my baby is hanging on for now but it’s just a matter of time.
-Traveled. I have lived in a bunch of different countries, and traveled to even more. Traveling is a huge part of my life and I knew it would be integral to continue prioritizing this even as I paid down debt. In the last seven months, I have covered Washington DC, Kuala Lumpur, Malaysia, and also made the rounds to the more local but lovely cities of Toronto, Winnipeg, and Quebec City.
–Indulged in good beer, cottage weekends, and nights out. Cause you gotta enjoy life. Nobody here is saying that you have to live like a recluse to pay down debt quickly.
Taking charge and paying down my student loans has been difficult. It has been all-consuming at times; I even went so far as to say that it has affected my relationship with my partner. So I hope you take my last point to heart and are using your money for other stuff, too. Be kind to yourself, your family, your partner on your debt repayment journey. It will get paid off eventually.
How are you doing with your debt repayment? Have you been able to pay it down quicker than you imagined or is slow and steady winning the race? Let me know what’s working for you in the comments!