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I just did it. In the last two weeks, I paid off my final bit of debt — the remainder of my student loans. Holla at ya girl.
But it wasn’t easy. Between my student loans and a car loan (which I paid off in 10 months, instead of 5 years), I acquired approximately $34,708 of debt.*
*When I returned from study abroad my senior year, I immediately paid back the remaining $4,276 that I didn’t use from the $7600 private loan I took out for a semester in London (talk about self-control for a 22-year-old!).
Taking that early student loan payment into account, my total student loan and car loan debt adds up to be more like $30,432 total.
My debt payments added up to over $35,000 with all of the interest.
In all, I paid an average of $485/month toward my debt for 6 years.
How did I do it?
Choices. I made choices based on my priorities.
Goals. I set goals and wrote them down.
Diligence and patience. I stuck to a long-term plan, even if the results seemed slow-moving.
Habits. I adjusted my lifestyle expectations straight out of college.
Saved. I made big-savings decisions. I made small-savings decisions.
Let’s expand on these biggies, shall we?
Make Choices Based on Your Priorities
If it's the end of the month and I'm nearing the max on my restaurant budget, I will say “no” to a meal out with my usual friend group. But if my friend Lexi comes to town, you can bet I’ll make an exception (even if I only order soup).
Maybe your priorities are eating fancy foods or doing house projects. For me, I will throw my money at Needtobreathe for any/all concerts within a four-hour driving distance. I’ll swap used clothes with my girlfriends, but I also like going out for ice cream and trips to New York City.
My point: Everyone’s priorities are different.
The hard part: Not everything can be a priority. (Eek, there it is.)
What gets people into financial trouble is when they think they:
Need it all, and that they need it now.
There’s a huge difference between what we want and what we need.
Want = fun, enjoyable.
Need = necessary for survival.
In most of my experiences (as a young professional in the US), I’m usually picking one want versus another. Neither are usually needs. And that’s okay!
To keep a good handle on your finances, let's prioritize needs over wants, then wants you really want over the wants you really don’t want all that much.
- Staying on (or under) budget
- Paying off debt (woot, and now I’m debt free!)
- Putting money in savings
- Having a safe and reliable car
- Eating out and getting drinks with friends (but also saving money on groceries)
- Concerts, traveling, camping and other experiences with people I love
Get Used to Saying No
I’m so not the fun friend. I mean, I am, but I’m not super spontaneous and I have a pretty hard “no” factor when it comes to spending money when I don’t have it (Needtobreathe concert tickets being my only exception for going wildly over budget. #rollover).
My friend Jen explains in her book The No-Spend Challenge Guide: How to Stop Spending Money Impulsively, Pay off Debt Fast, & Make Your Finances Fit Your Dreams, it’s easier to say no to everything from the get-go when trying to save money. When you start saying yes to things, it can be hard to know where the line is.
I’ve only done a couple no-spend months. The rest of the time, I have to know my own limits. I’ve developed a habit of saying no to things I didn’t know existed 30 minutes ago (looking at you, HomeGoods) or avoiding those stores altogether. I say yes to lunch, but no to sushi unless it’s happy hour. I say yes to a car, but I say no to a brand new one.
I’m okay with not having everything I think I want. And if I do want it, I’ll wait until my budget allows for it (also known as “delayed gratification.”).
Track Your Expenses and Make a Budget (aka, a Spending Plan)
My mother has always written down our family’s finances. Like, on paper. With a pencil. This always made money more real for me — there are limits to live within. You can only spend so much.
That’s why I use Mint to track each and every transaction I make (more on that here).
When I graduated from the University of Nebraska-Lincoln, I had student loan debt. I also needed to pay rent, buy groceries and get a new wardrobe for my first full-time job.
Life costs money. It's best to know where it's going. Having a budget and tracking your spending will allow you to spend and save within your means.
Pay Off Your Credit Cards
Instructions from my mother at a young age: Always pay off your credit card in full. In fact, she calls the credit card company scheme “Modern-day cops and robbers.”
Neither of us are anti-credit card. We like the rewards and the safety from fraudulent activity stealing all of the funds from our checking account.
However, Credit card companies thrive because of folks who don’t pay their balance in full. Each month. They rack up interest payments and you have more to pay each month to cover unpaid expenses from the month before.
It’s a terrible cycle.
I want your money to be your own. I want you to take initiative and tell your money where it’s going, not some credit card company that has enough money without taking yours.
I have three credit cards:
- A Citi DoubleCash that I use for everything
- A Target Card that I use only for Target and Target.com purchases
- A GapCard that I got when I worked for Old Navy in college. I only use it for Gap-store purchases (so, rarely). It doesn’t sync with Mint, so that’s why I really don’t use it — not even for the rewards. When I make a purchase with my GapCard, I use my bank app to send a Bill Pay for the amount immediately, so it shows up in my Mint and I can account for it in my budget.
I pay off each one of my credit cards every month. Because I have a budget, I know exactly how much is on each card and that I have the money in my checking account to pay each of the balances.
Set Financial Goals and Write Them Down
When you have a big picture goal — like saving up for a down payment on a car or house, paying off your credit card debt, budgeting for grad school or moving cross-country — it’s important to set goals.
When setting financial goals:
- Know how much you’ll need.
- Determine how long it’ll take to get there.
- Figure out how much you’ll need to save or earn each month.
- Then write it down.
I have this super non-sexy record of my student loan debt-payoff goal. It’s in my Gmail. I would update it almost monthly for the longest time — seeing if I was on track, if my goal was any closer because of a bigger payment that month, etc.
I also kept a running tab in my Notes app on my computer too:
(These goals and results have totally changed by the way — but it was super fun to dig them up!)
When you write down your goals, it puts everything else into perspective.
That $8 t-shirt from Target may not be so worth it if you’d rather ______. Just when you think you may want to live alone, looking at the actual numbers might pull you into reality — perhaps it’s better to live with roommates a while longer while you save up for ______.
Free Debt Repayment Worksheet
Complete the worksheet to see, assess and tackle your debt with less stress.
Stick To a Long-Term Financial Plan, Even if the Results Seem Slow-Moving
Diligence is, “having or showing care and conscientiousness in one's work or duties” (source). It takes an incredible amount of care to make decisions that affect you — decisions only you can make. Whether big or small, when you’re reaching for big financial goals, every decision matters.
I don’t go hang out at the mall anymore.
I buy black coffee 95% of the time. I get a vanilla latte as a treat.
I lived with 14 roommates over the course of 6 years.
I'm pretty aware of how much I spend on food.
Decisions, both big and small, affect your goals. This goes back to setting priorities. When you can’t have it all, decide what you want most. But with that, stay the course.
You’re the only one who can reach your goal. No one else is going to do it for you (if you find that person, lemme knowwww). Stay focused, and know that you’re not the ONLY one saying “no” or weighing the options. We’re all making choices, but when your choices are directly tied to reaching your goals, it’s easier to say “no” or “not yet.”
As little as you may be seeing progress, stay the course.
Of course, it’s worth weighing your options and revisiting your goals to see where else you can save, but a large part of it is sticking around for the long haul. Saving up $15,000 in an Emergency Fund will take a while. Paying off $135,000 in student loans won’t happen overnight.
Stay the course, friend. You’re not alone.
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A cheat sheet to understanding all the money lingo.
Adjust Your Lifestyle Expectations
Frugality isn’t sexy. (I mean, it is to me, but I may be the exception. If you pack your lunch, there’s a high chance I’ll ask you to marry me on the spot.)
Okay, so most people don’t find frugality sexy. It can be annoying, and it can affect the things you say “yes” and “no” to. That can affect your friendships or your social life, and no one loves that. But to an extent, you’ve gotta be cool with it.
- You may not order appetizers when you go out to eat — and that’s okay.
- You may only order the entree without the “meal deal” with fries and a drink.
- You may have an empty bookcase because you get all your books from the library.
- You may shop at no-frills supermarkets and buy store-brand.
- You may say “no” to this-or-that event, so you can save up for a new outfit or a trip to somewhere cool.
- You may drive a used car that sounds like a roaring lion (RIP to my 2006 Camry) while you pay off your student loans.
And know what these things have in common? They largely don’t affect other people. They affect you. Once you're okay with that, it's easier to set boundaries with your money.
When you’re frugal, sometimes it will affect other people and their opinion of you. So you'll have to get over the fact that you can’t please everyone. You may not be able to go to every event or the restaurants or bars where your friends want to hang out. And you know what? They’ll live.
You have to keep a bigger eye on your goals. The rest will fall into place as you keep making decisions that are in line with your larger priorities.
In many cases, you WILL go out to eat and buy a drink or go to a concert. Say “yes” to the best, ya’ll. You don’t have to be/do it all. Recognize what is your decision versus what you’re doing to please other people.
Make Both Big-Savings and Small-Savings Decisions
One of the greatest revelations I heard about saving money was from Bridget over at Money After Graduation. In this video, she debunks the latte factor, with the reality that saving $4 on a coffee drink isn’t going to save you near as much as where you choose to live or how much you spend on a new car.
In order to save money each month, I make big money-saving decisions, but I’m also super frugal with my small-savings decisions.
No, I still don’t drink lattes every day (because I prioritize a clothing budget, thankyouverymuch). But I was able to save WAY more money by living with roommates for 6 years, driving used cars, living in Nebraska where it’s super cheap and swapping used clothes.
Find Balance. You Can’t Have it All Right Now, Anyway.
You can’t have it all right now. Your parents worked super hard to get that house, that garden, those cars, to go on those vacations and to spend money on clothes from stores you’re too broke to even consider.
Seek contentment with where you are. Not everyone has everything, so don’t expect the same of yourself.
Related: Choose Your Own Adulthood
Even if you have all the money you could dream of, who says you need to spend it on things or experiences or lattes anyway?
Find the balance between what’s worth spending money on now, what can wait and consider where you want to be in a few years.
Your goals are bigger than living up to someone else’s standards — what does that look like for you?