When I graduated Parsons in 2008, I had around $51,000* of student loan debt. $51,000*! I was anxious and I was panicked. With my BFA in Illustration, I planned to stay in the city and move in with my sister. Moving back home was not an option. Asking my parents to help me out was also not an option.
*it was actually around $55-56k when including interest.
So I hustled.
The 9 months after graduation was a mix of ego-crushing retail work, interning, learning some new skills at a secondary school, illustrating at night and THEN (!) I obtained an in-house freelance job. A few months later, I finally landed my first full-time job, which was pretty fantastic since it was 2009. Yes, right during the recession. Anyways, the next three years at my full time job, I was making loan payments. Although diligent, I felt like I was just skimming the metaphorical 'fat' on top of my debt 'fat jar'. I was making progress, but it was baby steps. It wasn't until about 5 years in and a gradual increase in salary, I decided enough was enough. It was time be totally aggressive and strategic. I was sick of having every dime I earned go towards my loans. I decided the sooner my debt was gone, the sooner I could live a life of freedom.
So I made a goal. "Lindsey, you will be debt-free by end of 2014." Done. I made up my mind. This was going to happen. I also was paying for a wedding this year. What was I thinking?! Regardless, every month, I wrote down my payments and tracked the balance. It really helped to write every payment down to feel like I was making progress.
During this full-throttle-debt-free mode, the What's the Cost debt calculator was very helpful. It calculates the time range for repayment. The user enters all their debts, the interest rates, the time span they are working with to eliminate it and which debt you want to pay down first. Those calculations helped me swear off shopping or dinners or simply to think of a more economical option. I also found the Pay off Debt app completely helpful track monthly payments. Towards the end, I was throwing all additional money that I could afford to towards my loans. Come this past October, I was able to pay off my last loan completely. I almost couldn't believe it after I submitted my last payment and hung up the phone!
In an effort to pay it forward and help anyone else paying down debt in 2015, I compiled a list of some ideas that helped me pay down my debt.
Big Things:
1. Write it Down: Write down all your debt and just internalize it. You must see it all on paper. Nothing really lights a fire under your ass like when you see the grand total.
2. Payment Tools: Use the snowball method. Use the What's the Cost debt calculator.
3. Pick up a side job: In addition to my full time job, I illustrate at night. With the income I earn from freelance Illustration, I used the 1/3 rule: 1/3 save for taxes, 1/3 loans, 1/3 treat yourself (or if I felt strict, 2/3 to loans).
4. Extra $: Get a raise? Get a tax refund? Apply it to your loans. The biggest motivation for me was when I applied my last tax return and cut my debt by a few thousand dollars in one payment :)
5. Health Care: Go to the doctor regularly. It beats paying mega bucks for a root canal. Also, I have a cheap gym membership. It pays to go regularly to keep active and strong.
6. Simplify: Sell any of your items you don't need on Ebay. Live a life of simplicity. Hold yourself back. Don't buy the designer purse just yet. Do you really need that item? Is the item of good quality and can you use it for at least another 1-3 seasons?
7. Ask for a Raise: In order to have more money to go to your loans, you need to make more. If you are in a situation where you can ask for more money and you feel you've been a great asset for your team, please ask. Reach out to your manager and ask for a few minutes to discuss how you have increased your contributions that would merit a raise. OR, if you feel you aren't sure, ask your manager what more you can do to validate a higher pay rate. When my husband and I were approaching our wedding, it had been about a year at my position and I asked for a raise in my hourly rate. You know what? I got it :)
Little Things:
1. Banking Points: Look into your banking and see if they have any point system that you can cash in on. I was able to convert my Citibank Thank you points to a $250 loan payment. They made the check out to my student loan provider. Woohoo!
2. Rewards Credit Card: Look into a cash back credit card. Just be sure you pay off your credit card each month. Ask for the accumulated cash rewards in a check. Put that check to your loan payment.
3. Shopping: Try getting your shoes fixed instead of buying new ones. That could give you another 6-12 months wear out of them.
4. Yes, this sucks, but packing a Lunch: Invest in some nice glass tupperware, a lunch bag, and water bottle. Fill up your water bottle at work. Pack your lunch and track the days you didn't eat lunch out. That money can be additional money to your loans. You can save 6-30/week, which is at least something.
5. (goes hand in hand with #4) Groceries: Make sure you hit the grocery store. Pay attention to the grocery circulars. Plan your meals with sale produce and meats. Buy snacks at the store while you're grocery shopping so you can bring to work.
6. Nickle and Dime: All my spare change went to loans. Granted, I feel like a loser depositing $26 in rolled quarters, pennies and dimes, but it's something and it can add up to a lot.
7. Cut your fixed expenses: Call your utilities to see if you could lower your month bill. I called Con Ed when our bill went up to $66 from the normal $61. They lowered it back down to $61. Five dollars is not much, but it's something.
8. Gift Giving: Make or bake Christmas gifts or do a gift exchange. If comfortable, ask to forgo gifts. If people ask what you would like and if you're comfortable asking, suggest cash for your loans.
I hope that helps you, whether or not your are on a debt-free journey. Debt reduction takes focus and time and definitely doesn't go away overnight. If you have any more suggestions to add, I would love to hear! Cheers to financial resolutions in 2015!
