How I paid off $ 100,000 in student loans while earning $ 28,000 to $ 45,000 per year
In October 2011, I moved to New York to pursue my dream of becoming a writer. I graduated from Boston University in 2008 with $ 85,000 in student loan debt. Although I made some payments, by the time I moved I was closer to $ 90,000 in the hole due to the growing interest.
I juggled several jobs to make ends meet: dining at a Tribeca wine merchant, babysitting on Park Avenue, writing commercials, and of course, writing every story a publisher was willing to attribute and pay me for. Most years I earned between $ 28,000 and $ 45,000 before taxes.
Despite the tightening of my finances, each month I continued to repay my loans. These represented a substantial bill: for the first few years, my monthly payment was $ 1,040 per month. In all, I have paid over $ 100,000 since graduating.
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This year when the pandemic hit, I had just started a dream staff writing job here at Grow. As New York closed, I made a decision. As long as I couldn’t do all the things that made New York City for me (weird comedy shows, movies, dumplings with holes in the wall), I would move in with my parents in the suburbs of Boston and finish paying off my loans. At the start of 2020, I had about $ 28,000 left. I’m now at $ 6,517, which will be paid off before New Years.
This is how I was able pay off my debt and my advice to anyone in a similar position.
I was always obsessed with budgeting. I think this dedication helped me control my spending.
Besides the loans, the monthly expenses usually included around $ 750 for the rent of my apartment in Crown Heights (two roommates, no living room), $ 10 per month for a Spotify subscription, $ 35 for a gym subscription for women and about $ 100 for a subway pass. .
In terms of discretionary spending, I was extremely strict. I allowed myself $ 150 a week for everything else, including groceries and entertainment. I looked at my future plans and figured out exactly how much I could spend each day based on what I was doing. If I went out to a concert or to celebrate a friend’s birthday, for example, that day would earn me $ 20 to $ 40 and every other day, between $ 0 and $ 5 (for a latte).
I was also constantly readjusting. If I ended up spending too much one day, I would make sure to subtract everything that I went over budget other days.
Knowing how limited my financial resources were, whenever I needed or wanted to buy something I would google to find the the cheapest dive bars, thrift stores or supermarkets.
When I went out with friends, I would research places before and try to suggest options that I knew I could afford that would not deplete my funds for the rest of the week. That way, even when I knew I was spending, I was a little less worried about how much each dollar would end up hurting.
As I said earlier, for many years, I rarely turned down a job. Even though it had nothing to do with my planned career, I knew how much I had to earn each month to cover all my expenses, including loans, and I never stopped working until I reached this. amount.
I constantly started stories, reached out to friends to ask if they knew anyone looking to hire a copywriter or caterer, kept in touch with contacts who might not have had openings at one time but would have had at another, and I never have been. hesitant to ask people I have met – no matter how random the encounter – if their place of work was an interview.
I never had a credit card. I think different experts will weigh on this decision differently, but I never liked the idea of spending money that I didn’t actually have, especially when it would be so difficult to pay back on top of all my other expenses. .
There were certainly months where having a credit card would have made life a little easier, like when I was on my last $ 20 and wasn’t sure when the next paycheck (often $ 75. at $ 300) was coming. But not having a credit card meant I wasn’t tempted to make big purchases I couldn’t afford, and it also meant I never got in. no more debt than my already heavy load of loans.
Living on the financial edge was very, very stressful. But I made it work.
The article “How I paid off $ 100,000 in student loans will earn me between $ 28,000 and $ 45,000 per year” originally published on Cultivate + Acorns.