Student Debt: It’s A Numbers Game

Manageable, but I’m counting every dollar.

I’ve learned that when it comes to most things in life it’s not what you know, but who you know. I have also learned that numbers are really important. Here’s how my connections and attention to numbers have helped me start to scale a small mountain of debt.

I could have chosen a cheaper school, but the professors and the Computer Science program at Abilene Christian University had a lot of connections, and I knew considerably more people in the small town of Abilene than I did at the other schools I was accepted at.

Despite choosing an expensive private school I was fortunate to have most of my tuition paid for by scholarships, bringing the private school cost down to about the same level as a state-funded school. I graduated with an average GPA and received diploma for a Bachelor’s of Science in Computer Science that came with a $29,000 ball and chain in the form of loans.

Thanks to my school’s connections I was offered an interview for a programming job in Silicon Valley. While an $80,000-$100,000 salary sounded good on paper, I did the math and decided to accept a much lower-paying job in San Antonio Texas. The lower-cost of living meant I was able to pay more towards my loans each month despite a lower salary. I also found a roommate to lower costs for a few months until I got married.

My wife’s story has been far less fortunate than mine, which means I am now paying back a total of $50,000 in loans while she still looks for work. This brings our minimum payments to $350 a month. We’re currently paying at least $350 extra each month whenever possible.

My attention to numbers has allowed us to work side jobs to gain extra income and cut our grocery bill down through challenges like trying to buy groceries that average out to $1-per-pound each month. We should probably try for $2 a pound, since we always go over, but it’s a fun un-achievable goal that helps us stay frugal.

Side jobs, graduation gifts, wedding gifts, and frugality have helped us pay down $17,000 in a year, and build up an emergency fund. Assuming my wife doesn’t get another job and we don’t have a major emergency, we should pay off our loans in four years. The most important things that have contributed to managing our loans successfully so far have been:

• Establishing an emergency fund for things like vehicle breakdowns and medical expenses.
• Putting our loans on auto-pay so that we don’t get charged fees.
• Making a budget and counting each and every dollar we spend and earn with help from Mint.com.
• Saving whatever we didn’t spend in our budget so that sudden increases to our budget don’t require us to cut back on loan payments.
• Eating out as little as possible.
• Finding fun things to do that cost little to nothing.
• Sharing a car that is decently reliable, cost $2,000 (which we paid for in cash) and maintaining it properly (by sharing we pay less in insurance and gas).
• Cutting our food and energy bill by watching what we eat, cooking food ourselves, and replacing light bulbs with LED light bulbs (which will pay for themselves after a year. I did the numbers!)
• Throwing as much extra cash at our loans as possible.
• Living in a cheap apartment.
• Not subscribing to cable TV.
• Skipping out the majority of social events with friends that cost money.
• Rarely drinking alcohol at bars or restaurants.
• Reading the blog at Get Rich Slowly and learning things like “It’s easier to spend less than it is to try to earn more.”
• Using spreadsheets like Google Spreadsheets to write down numbers (such as grocery prices between stores), comparing things and tracking those numbers from month to month.
• Getting a job in an area of the country that’s not over-saturated with job applicants in my field.

Photo Credit: Asia Eidson, Photo By Joy