Student debt is just THE ABSOLUTE WORST – the emotional and mental burden of having this huge number looming over your head, wondering if and when it will ever get paid off is always in the back of your mind. I dreamed of becoming a serial hacker so I could hack into the systems and magically delete that number to zero- we’ve seen it happen in TV shows so it must be possible. I had about a dozen government and private loans with various interest rates when I graduated from the University of Southern California and I knew that I wanted to start paying them off as fast as I could once I landed a job. I even read blogs and websites dishing advice on how to pay off debt and personal success stories- not just to learn tips but also to keep me motivated throughout those dark months. If you want to pay down your debt quickly you need to be prepared to live down to the bare minimum, exercise a ton of self-control and go HAM. Aka Beast Mode but for debt. Friends and loved ones are going to suffer too but if they love you they’ll be waiting for you on the other side. It is no walk in the park, but it will be worth it.
I cut out all monthly recurring subscriptions
Aside from the basic necessities like my cell phone subscription, I cut out ALL monthly automatic charges like my VPN service (this hid my IP address so I could access US websites from abroad), HULU, etc.
I allowed myself a set amount of spending money each month
Instead of looking at where my money was going each month, I simply and brutally allowed myself $100 in spending money – this meant no eating out, hardly any shopping, no Starbucks, no cold-pressed juices, no nothing. I either packed my lunch to work or skipped lunch entirely if I forgot to pack. That’s the sad truth. I didn’t go shopping for clothes, cut my own hair and stuck to the rule of $100 per month. It became my monthly personal challenge and sometimes I even spent less than $100. I explained to friends and my partner what I was doing and why I needed to do it. The people who truly care about you will understand.
I put as much of my paycheck as possible towards loans
Each time I received my pay I immediately transferred everything I could minus my basic living expenses towards my loans (around $3000 to $4000 a month). That way it simply was not possible for me to even spend money, because it was already out of my bank account. And I watched as these huge lump sums made my debt number go lower and lower at warp speed.
I paid off my highest interest loans first
Some of my loans had a 10% interest rate, which means if a loan was $10,000 then it was increasing by $100 each month or $1200 each year. Compared to other loans that had a 2% interest rate, it was obvious that the high interest ones needed to be obliterated first. That’s why the last months of paying off my debt I was able to coast and live it up more while also putting more money to my savings. Everyone needs to have a FUCK OFF FUND by the way.
It was quite simple really and it can be summed up in one word – SACRIFICE. But obviously, in order to pay off debt successfully, you need to have a well-paying job. Earning $2k a month is not a good foundation for paying off a disgusting amount of debt. I was also living in cheap housing provided by relatives so if your home is taking up a large chunk of your paycheck you need to think about moving to a more affordable place to live. Whatever it takes.