The Challenge: Crushing My Student Loans in Two Years or Less
Here’s how I erased $14,000 without jailing my wanderlust.
Are you one of the millions upon millions with outstanding student loans?
I was.
And do you cringe just thinking about the balance or how to regulate payments?
Because I sure did. Answering these questions myself is what made me stop hesitating over publishing this piece.
Born and raised in Canada, it may have been the maple syrup running through my veins that compelled me to stay in the country for post-secondary. I ate up a four-year university degree, and gained more debt than I knew what to do with. The feeling of success that came with graduation vanished with that first notice about repaying my student loans. Cue the doom, desperation, and questioning of life choices.
Let’s consider some statistics to clarify the general situation of students diving into debt like a golden retriever plummeting into the mountain of leaves you just finished raking. In the United States, 12.3 million student loan borrowers have debt between $10,000 – $25,000 USD ($13,268 – $33,170 CAD; as of 2019). Another 2.5 million students have debt over $100,000 USD ($132,680 CAD). In Canada, average debt following a bachelor’s degree is $28,000 CAD ($21,929 USD). And, like in the states, advancing through medical school or shooting for a PhD compounds this. Note that none of these values even touch interest.
Education should be an opportunity, not an obstacle.
Meanwhile, school is free in countries with advanced social systems and the wisdom that capitalist structures benefit only the few and often lead to ruin. Let’s take Denmark as an example because I have a network there and have discussed these things with many Danes. In addition to tuition summing zero, as soon as you’re 18 you get paid to attend school.
As long as you are enrolled in education, you are eligible for some kind of stipend. This means you can get paid as far back as high school. Students are encouraged to focus on their studies and foster their creativity, which only stimulates society and the economy down the road.
What about graduate school? Those PhD programs that cost $240k in the U.S. are salaried research positions in Denmark. And the pay is reasonable. While it ranges depending on where you study in Denmark, the 2017 average pre-tax monthly salary as a PhD student at Copenhagen University is 32,567 DKK ($6410.83 CAD, or $4932.15 USD; calculations made via average 2017 exchange rate).
With that bit of context out of the way, I’m going to speak to why I’m spending all this time writing this article in the first place. Why I’m going to share a story this personal when I still haven’t shared it with my family or closest friends. Why I think this conversation matters.
Perspective and empathy are important, but don’t let them get derail your efforts of self-preservation.
Despite not being a Dane, I come from a place of privilege. University tuition in Canada is cheaper than in many countries, and I shudder when recalling the debt stories of my American friends. But comparisons are pointless here: the struggle to pay off student loans is real, and can lead to mental health issues such as stress (including physiological manifestations like headaches), depression, and poorer psychological functioning.
When you’re stuck in an ever-expanding hole, don’t compare your hole to those of others and dismiss the validity of your own experience. Perspective and empathy are important, but don’t let them get derail your efforts of self-preservation. Sometimes we need to first help ourselves before we can help others.
A half-assed focus on creating a plan to pull your friend out of $200k in student loans can be more cumbersome than helpful. Once you’re back on ground level, regardless of the differences between Canada and the U.S.’ student loan systems, your specific repayment experiences and methods may inspire others. I’ve been debt-free for years, and finally have the energy to speak about it and reach out. And that’s why I’m writing this.
Education should be an opportunity, not an obstacle.
But in a world where that is not yet the case, I hope my personal journey to wiping away my $14,000 CAD student loans in just two years will be helpful to those who find themselves in a similar situation. The kicker: I accomplished this without stifling my innate wanderlust and long-stewing dream to travel after university. (Note: $14,000 CAD = $13,594 USD, using the average exchange rate from the year I started paying off this loan.)
For clarity, the loans I accumulated are relatively small for a couple of reasons:
- I attended a Canadian university as a Canadian citizen;
- I received scholarships that covered some of my tuition;
- I had some financial support from my parents.
So yes, while $14k was a lot of money for me, it was manageable. If anyone wants to comment with a redundant “oh wow $14k is nothing, I have $78k in loans, stop complaining, Karen,” redirect yourself to another one of my stories instead. This is my story, and I made my privilege clear.
Satisfying My Wanderlust with an Overseas Job
Long story short, for years I had my eyes set on living in Japan for a couple years. I was fascinated by its niche fashions, was an anime and video game geek, and continue to this day to prefer raw fish overcooked. So throughout my university years, I took jobs and volunteer work that would bolster my resume when it came to finally applying to teaching jobs in Japan.
My end goal was to get into the Japan Exchange and Teaching (JET) Programme, but after traveling down to Calgary for the most daunting interview of my life, I was shortlisted. Understanding how damn competitive the programme was (I participated in 2013, so I have no idea how it is today) and with no inkling of what number I was on that shortlist, I wrote JET off and started applying to other English teaching programs and companies throughout Japan. But lo and behold, the same day I completed an interview with another company I got a phone call offering me JET placement in Kobe city!
Creating A Solid Budget
Being on salary meant I could create a monthly budget without having to account for volatile income (like I do now as a freelancer). I lifted a template from a blog and laid out my basics, starting with how much I wanted to put aside each month for paying off my loan. From there I worked through the critical expenses like groceries, utilities, and building an emergency fund.
I left myself with a moderate allowance since I didn’t come to Japan to have a dichotomy of working and staying home. I wanted to explore the country, finally attend a visual kei concert, and embrace my time here.
Going Cash-Only and the Power of Envelopes
Paying by card wasn’t much of an option in Japan. While credit cards are becoming more popular, cash remains emperor, and this forced me to adopt a cash-only approach to my spending.
After payday, I’d hit up my bank and withdraw all of it save for the chunk I’d transfer to my Canadian account for paying off my loan. Then I’d separate the wad of cash into envelopes designated for each part of my budget. I had an “Eating Out” envelope, one for “Groceries,” etc. If an envelope ran out of cash, I had to think hard about shifting some from another envelope.
Since shit happens, I had to move money around many times. While this meant that my budget adopted a degree of flexibility, which is crucial because rigidity makes us primed for failure, I still had to work within the confines of my total monthly budget. Working with cash forced me to pay attention to every yen I spent and be more mindful in my spending. And at that point in my life, I needed that lesson.
International Bank Transfers
As of writing this, there are numerous, pain-free ways to transfer money internationally. I know because I use a lot of them in my own business dealing with clients from around the world. But back in the day this was a different story, made all the more difficult with Japan’s reluctance to embrace technology in daily life.
Luckily, I had researched GoRemit prior to arriving in Japan and got my account set up without too much pain. The fees weren’t outrageous but were significant enough to warrant consideration of how frequently I should transfer money over. Hoarding my money for a few months at a time meant that more of it went to paying off my loans — rather than being collected by GoRemit.
Dear Ol’ Discipline
Despite my semi-flexible budget and my decent salary, I had to say no to a lot to hit my goal of paying off my loans within two years.
“Sorry, maybe next time.”
After a year I even opted out of the monthly money roundup for my school’s three big work parties a year (called enkai (宴会)). These were formal Japanese drinking culture affairs with restaurants booked months in advance, but at 3,000 yen ($37 CAD; $28 USD) a month for average food worth all of 5,000 yen at each party (if I’m being generous), it eventually didn’t feel worth it to me. Over the course of a year I would spend 36,000 yen ($375 CAD; $340 USD) for a couple meals that were nothing special. I don’t regret having attended these a few times for the cultural experience and opportunity to hang out with my coworkers, but the money went further elsewhere.
Hanging out with friends also took a hit of course. If near the end of the month one of my friends wanted to go to an izakaya and my Eating Out envelope was already dry as a desert, I’d only be able to go if I had gone underbudget with my groceries that month. Otherwise, it was a simple, “Sorry, maybe next time.”
Copying YouTubers
Aside from being talented at elevating a bowl of instant noodles, I wasn’t much of a chef when I first moved out of my mom’s house to come to Japan. Learning how to cook was born of necessity, but as a foodie fascinated by Japanese supermarkets and ingredients, I was keen to learn.
I declined the subscription lunch bento boxes at the junior high school I taught at, and decided to make my own lunches. This quest opened my eyes to YouTube cooking channels Cooking With Dog and Ochikeron.
I gained new skills and kept more money tucked away for loan repayment, all while still exploring Japanese cuisine.
Embracing the Available
Even though I dreamed of traveling both far north and to Okinawa, and riding the shinkansen (bullet train) for the second time in my life (my first time was back in my high school days), my budget didn’t allow this. The shinkansen is expensive, and while budget airlines could get me to Okinawa I wanted to spend more than a day there.
I had to find joy in what was close to me, in things that my past self would have overlooked or pegged as boring.
The huge plus with moving to a new country is that everything is novel. There was plenty to explore within Kobe, and, if I chose the right train lines, travel to neighboring prefectures was cheap. I budgeted my trips down to the yennie, and had to save for anything on the horizon that would cost more than my monthly travel budget.
Local festivals kept me sane, and I recorded them in my calendar. Most festivals are as cheap or expensive as you make them, which makes them feasible entertainment. Being between the sea and mountains also helped: I could climb up Mt. Rokko and visit some sheep, or relax in Harborland.
I had to find joy in what was close to me, in things that my past self would have overlooked or pegged as boring. This mindset stuck with me and determines a lot of how I travel now, and even gave me a greater appreciation for my hometown back in Canada.
In The End
The official email confirming that my student loans were paid in full remains starred in my inbox. It filled me with such a sense of accomplishment and relief. The battle was over.
While this story may have some years on it, the techniques I employed can still be applied today. How you approach a problem can deeply impact how that problem affects you. My story is just one example of that. For your story, you may want to get a bit creative, and that’s ok. In fact, I encourage it.
Did you have to take out student loans like me? If you have a story to share, please drop it in the comments.
Seph is a digital nomad, unabashed foodie, and avid gamer. As a language and copy editor of academic manuscripts, she oversees the frontiers of research, and channels this inspiration into her fiction. Read more by Seph here.
