How I Paid off $55k of Student Loans in 4 years

Through a combination of scholarships, financial aid, and off campus living, I was able to escape a private 4-year University with just $55,000 in debt — note that title picture begins just under $50k since I only linked my loans to Mint in September a few months after graduation. Below are some of the strategies I used to accomplish that feat.

TOP LINE

Starting with dollars incoming, track down a source of steady income. There are innumerable jobs out there with only 2 real requirements — show up on time (by which I mean early) and do what you’re asked to do. If you’re able to get your initial tasks done earlier than expected, ask what you can do next. Numerous articles could be written about how to perform better at work (more to come in the future), but these few qualities will put you WAY ahead.

I personally got a job right out of school for a small (~100 employees) software firm. Tech firms have the highest margins and often offer the highest salaries and near limitless opportunity for advancement. Again, more on how to attain such a position in a future post, but for now — Account Management and Customer Support are great entry level jobs that set you up to LEARN and generally only require the first 2 attributes listed above. Further, the sheer amount of demand tech companies have for these positions is astounding.

I went the customer support route, and I was able to increase my salary over 50% in under 4 years. How? By learning from the best. Find the smartest and most heavy-lifting people at your company, and FOLLOW them. You’ll know who they are by paying attention to who everyone asks for help. Is there someone that seems to be involved in all the important decisions or shows up to meetings where the org chart says they have no place? That person is pushing the company forward, and you should make friends with that person.

By make friends, I mean to learn as much as possible from them. Be sure not to take advantage, and try to make the relationship mutual. That might sound daunting at first, but don’t underestimate the power of the little things — helping them schedule a meeting, bringing them coffee, etc. Also, this person likely has a large number of incoming requests. Ask if there are certain requests that YOU can learn how to handle so they won’t have to. Is there a task taking up a significant chunk of their time? Could they could teach you that task in a few hours or less? Go for it. You learn a new skill and gain visibility at your company while they save time to focus on other things.

Brass tax for the TOP LINE is about showing everyone that you GO AFTER IT. It being whatever’s necessary for your team, your boss, the company, coworkers, whomever.

By employing the strategies listed above I developed a reputation at my company, learned invaluable and in-demand technical skills, and was able to continually leverage both of those to increase my top line.

BOTTOM LINE

Before reading this section, take stock of the the finer things in life you already have or those you may want in the future. Before attempting to implement strategies below, maybe take a week or two continuing to enjoy those things and be sure to relish them while they last. Why? Because this section is about being utterly RUTHLESS.

First things first, let’s focus on what the bottom line entails — think Maslow’s hierarchy. Basic physiological needs include food, water, and shelter. We’re focusing on only the first rung here folks.

SHELTER

Live in as small of a place as possible such as a studio apartment or a shared community space. This approach not only helps with driving down cost of rent, but it also forces you to own very few things (note: things cost $$$). Also, don’t hesitate to live far away from your job if it’s cheaper to do so. Many young people are flocking to cities, and you’re not going to be able to pay down debt if you’ve got a $50k/year entry level job while living in Manhattan. Fill your travel time (train, car, bike) with music, podcasts, audiobooks, work email, etc.

One last thing — if you only think about home as a place to sleep, you’ll have more incentive to not be at home. That means you’re either out and about learning new things, making connections for your network (personal or professional), or, most importantly, at WORK making money.

WATER

Water is plentiful and almost always free. Buy a good reusable water bottle, and don’t drink ANYTHING else. You body does NOT need anything to drink other than water to survive.

Having said the above, don’t kill (metaphorically) yourself trying to avoid anything but water. Keep your eyes out for free drinks. Many companies will do promotions on the street (e.g. Red Bull, Monster, Snapple); volunteer events or free to join social organizations will often provide free finger foods and different drinks; most workplaces also offer free coffee. Always be on the lookout for FREE SHIT.

FOOD

Diet and nutrition are outside the scope of this article. There is already tons of information available online. Thus, my four pieces of advice focus on how to save money:

1. FREE VISION. I saved so much money through the years by keeping an eye out for free food. Free food at work. Free food at community events for my building. Free food for volunteering events. Free food at social organizations. Free food when visiting family. Free food is gold, and it doesn’t stop in college.
2. Soylent — for a single person who doesn’t share meals, it can be very difficult to get your cost per hour of satiation (yes, you should be thinking about food in terms of the cost per not hungry hour it provides) lower than Soylent. I splurge and get Cafe Mocha ready made because it’s easier, tastes better, and it also contains caffeine, but the powder version is extremely cheap.
3. Cheap foods at home — there are a million things online about how to find cheap food to cook at home. Rice and beans, eggs, potatoes, etc. Don’t go out for breakfast, lunch, or dinner. If you want to go out with your friends for meals, eat beforehand, and just order a soda (or better yet, a water). Trust me, it feels weird at first but people get used to it fast. A few awkward water-orders is certainly worth a lack of debt down the line.
4. Take advantage of friends, family, neighbors, and more. There are likely plenty of people in your life that just want to see you more (parents, grandparents, godparents, aunts and uncles, neighbors, family friends). Adults, of prime earning age, love spending time with younger people, and nearly all of them know what it’s like to be just starting out. They’re more than happy to treat you to food. Remember to be gracious, but also remember to call/visit these people, even if for nothing more than free food.

The Occasional Splurge

When you’re ruthless on spending, you can sometimes (or often) feel like your life is pretty boring or lacking excitement. Know that it’s okay to splurge every now and then to maintain your sanity. You can also turn your thriftiness into a game by either competing with friends, significant others, or even yourself. Finally, there are cheap ways to splurge. Examples:

1. Find a free event near you. Personally, I live in Chicago so there’s always something free to do. Seek out those events and keep busy in your free time.
2. BYOB — obviously this example isn’t applicable if you don’t drink, but it’s super helpful for saving money if you do. Alcohol purchased at a bar or restaurant is insanely expensive, and it simply isn’t a luxury a debt-ridden person can afford. Thus, go to a cheaper place that’s BYOB. For example, I love mexican food, and Chicago has tons of cheap BYOB mexican restaurants. Most regular bars would charge $6 per Corona. I could go to a BYOB place with friends and split a $12 12-pack for the cost of two Coronas elsewhere.
3. Groupon — groupon is a great way to try something unique without forking over tons of cash. You’ve got to be mindful of picking up on good deals, but they’re available for those willing to spend the time to find them.
4. Street festivals — this one may be particular to Chicago, but there are tons of free street festivals. They might have a “suggested donation” but skip out on that. Trust me, if you feel bad about it now, don’t. If you’re the type of person that feels bad about it, you’re the same type of person that will donate in spades once you’re out of debt. It feels that much better to drop a $20 in a $5 suggestion box when you can remember the few years prior when you skipped the donation altogether.

BUDGET

There are a million and one articles out there about the importance of a budget. Find one that works for you. I found what worked best for me was to group all of my fixed costs together and then set a daily spending limit for variable costs. Each day of the week had a different number. For example, Mondays, Tuesdays, and Thursdays are $0. I’ve already purchased Soylent (subscribe monthly via Soylent’s website or Amazon for additional discount) for breakfast and lunch on those days, and these three days were the ones I committed to eating dinner I’d cooked the previous Sunday.

CONSTANTLY reevaluate your budget. I recommend approaching your budget (which should include top line and bottom line) from two perspectives:

#1 Spending Evaluation

Go through your expenses (from highest to lowest to prioritize) and ask, “If I absolutely HAD to, how would I make this expense lower?” Don’t waste time with ephemeral and subjective questions like want vs. need; your brain is often too smart and is skilled at tricking you into justifying what you’re already paying.

Pretend like lowering that expense is not an option, and try to come up with solutions. You’ll often find solutions you wouldn’t normally entertain as possible. For example, I came up with a solution to cook simple and cheap meals at home once a week to lower my dinner costs (Cafe mocha wasn’t good for dinner given the caffeine). Past me would’ve scoffed at such an idea because I HATE cooking only slightly more than I dislike cleaning up. However, I forced myself to try it, and once I did, I was more than happy to enjoy the extra $40–$60 a week I saved.

#2 Paying Down Debt Evaluation

Approach your budget evaluating the amount of money your putting towards your loans. The simplest calculation here is:

Top Line - Bottom Line = Loan Payment

Ask yourself, “how could I increase that payment by $25? Then $50? Then $100?” This allows you to come up with more unique solutions. For example, you might be trying to reduce your expenses for nights out on the weekends. However, from that perspective, your brain tends to switch to FOMO mode, and you’re unlikely to make a reduction. Switching to a broader perspective helps to come up with more creative solutions.

Personally, I figured out that I could easily justify a brand new $60 video game in just one weekend. Why? Going to the bars on both Friday and Saturday costs way more than $60 (5 coronas each night plus tax and tip > new video game). That $60 game would then often remain entertaining for many weekends to come. With that I was able to reduce my going out costs by half, and I tricked my brain into it being a reward (the new game).

By employing various strategies outlined above, I was able to pay down $55,000 of debt in under 4 years. I should also note that I lived 99% independently. That extra 1% accounts for friends and family members that may have provided gifts and/or occasional meals.

I can’t stand the click-bait articles about “how rich person took advantage of growing up rich to pay off large amount of debt.” I should note that I didn’t grow up destitute by any means, but the majority of people paying off student loan debt don’t have people in their lives with free condos to live in or high net worth individuals offering seed/investment money for a 22 year old’s bright idea.

DISCLOSURE: This article assumes some basic setup about the logistics of managing money and paying off loans via a loan services provider. I hope to do a follow-up post about my particular money setup, budget, cash flow analysis, etc.

Have tips or tricks that you use(d) to help pay down debt? Have questions about certain parts of the article you’d like to know more about? Would love to hear them in the comments. Happy Thursday!