Paying Off My Student Loans

Feeling overwhelmed by the prospect of paying off your student loans? You're not alone. But fear not - there are options available to help make the process more manageable.

It’s crazy to think that 6 years ago, my biggest problem was trying to figure out how to pay off my student loans so I could be free… and not only have I paid them off, but I also quit my job and have a whole damn business now.

Honestly, I wasn’t paying off my loans so I could quit my job or start a business.

…But once that ‘challenge’ had been won, I looked for the next one, and entrepreneurship happened to be it.

The total amount of debt I had in Q1 2018 was $40k. 

By October 2019, I had $0 debt and $10k in cash savings (reminder: a lot can change in a few years).

I’m not blind to the fact that the economic landscape has changed since 2018/2019 when I did this, but these are all possible and the system I used to do it can be done.

SO HOW’D I DO A 180º?

💜 In Q1 2018, I spent 3 months conducting a spending audit.

I tracked every damn thing I spent so I could get familiar with my habits and where sneaky spending was coming into play (snag my spending tracker for free).

💜 By Q2 2018, I got a new job with a $12k boost in salary ($60k → $72k).

I knew that job hopping would be the best way to increase my salary, and I was on the fast track to pay off my debt, so I left my job after 11 months.

💜 In Q3 2018 I moved into a cheaper place.

My biggest expense was housing, so I went from living alone to having 2 roommates to keep expenses low. It wasn’t ideal, but I was willing to coexist with others for a few years if it meant I could pay off my debt.

💜 By Q4 2018 I started building my automated budget.

Now that I knew my spending habits, increased my monthly income, and decreased my bills, I knew I had to be smarter with my budget because tracking alone wasn’t working (snag my automated budget guide).

💜 By the end of Q1 2019 my automated system was fully up and running.

The beginning SUCKED as I was waiting for all my systems and accounts to beefin’ up, but eventually, my budget and bill payment systems were working for me in my sleep.

💜 By Q3 2019, I had paid off all debt - WEEEEE!

In October 2019, I made my last and final student loan payment and my credit cards were at $0 (my highest was $14k at one point). I had $10k cash savings by December and by March was able to move into my dream Brownstone apartment in the Upper West Side that had been on my vision board for 4 years.

The above is just an overview, but I outline some of these so you can do it yourself later in the newsletter (and have in the guides mentioned above) ⏬

Want personalized advice? Book a quick 30-minute 1:1 call with me 📱

Double Your Salary

When it comes to loan repayment, the most obvious first solution is to make more money.

Money doesn’t solve all your problems, but it certainly fucking helps, especially when you’re racing against the clock with interest rates.

I know the job market is whack right now and we’re totally being gaslit by those who claim there are “a lot of jobs” and “the economy is great” BUT I’m a big believer that if shit ain’t workin’, you gotta be innovative and pivot…

Which is how I ended up in Tech and on Wall Street even though my degree is in teaching.

So how do you double your salary AND switch careers?

I highlight the full details in this blog post on how to take your existing degree, experience, and knowledge and spin it, but here’s an overview:

1️⃣ TRANSFERABLE SKILLS

Identify and highlight skills from teaching that are applicable in corporate roles.

2️⃣ NETWORKING

Utilize and expand your network to uncover opportunities and gain industry insights.

3️⃣ GAINING EXPERIENCE

Take on side gigs and roles to build relevant experience.

4️⃣ POSITIONING

Tailor your resume and online profiles to fit the desired corporate role.

5️⃣ CONTINUOUS LEARNING

Stay proactive in learning new skills and seeking growth opportunities.

If you do NOT want to job hop and play that game but would rather start building out your side hustle (which could also help you pay off your loans), check out my blog post on 12 Simple Ways To Make Your First $100 Online.

Student Loan Strategies

The next solution for debt repayment is to take advantage of programs, resources, and tools to maximize the payments you DO make.

REPAYMENT PLANS

One popular approach is utilizing Income-Driven Repayment Plans, which set your monthly payment at an amount that is intended to be affordable based on your income and family size.

These plans, offered by the federal government, include options such as Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Revised Pay As You Earn (REPAYE).

Income-Driven Repayment Plans can provide much-needed relief for borrowers struggling to make ends meet (and yes, that includes you, a new business owner who took a pay cut to build your dream).

By enrolling in one of these plans, you may be able to lower your monthly payments and have a portion of your remaining loan balance forgiven after a certain period of time.

Additionally, consider exploring loan forgiveness and discharge programs, such as Public Service Loan Forgiveness (PSLF) for those working in public service, or the Teacher Loan Forgiveness program for educators.

Lastly, for those seeking to manage multiple federal student loans, consolidation may be a viable option.

Consolidation allows you to combine multiple federal loans into a single loan, potentially simplifying your repayment process and offering the opportunity to qualify for certain loan forgiveness programs.

If you're interested in exploring these options, contact your loan servicer (Nelnet, Sallie Mae, etc) to discuss which plan might be the best fit for your situation.

Also, check out Tara Talks Finance which specifically talks about student loans and gives you real-time updates on policies, new programs, and debt forgiveness options.

0% APR CREDIT CARDS

I got my first credit card when I was 18 and I’ve been milking the system for all I can ever since.

Firstly, don’t be afraid of debt.

Every single thriving corporate business NEEDS debt in order to survive (and is recommended to keep a healthy balance sheet).

A really easy solution is leveraging 0% APR Credit Cards.

Transfer your high-interest student loan balance to a 0% APR credit card (yes, you can do this) and keep making monthly payments without progress.

If you’re really good about keeping on your spending, double down on repaying your loans and put basics like groceries on a 0% APR card to pay in full in the future.

I wouldn’t recommend relying on this if you have a spending problem because you can get yourself in a bind really quickly (been there, done that), but when you’re racing against interest rates and inflation, you have to get creative with it.

Spend Smarter

Another obvious solution for debt repayment is to spend less so you can pay more.

This is my least favorite of all of them, but ultimately the the thing that really moved the needle for me.

Here's the harsh truth: our brains are bad at tracking our finances.

But the good news? We can trick our brains with systems (and leverage AI to do the heavy lifting).

Instead of giving up your little coffee treat, here's the strategy:

1️⃣ SET SPECIFIC GOALS + USE AI

Don't just say "I want to save more money" - Say "I want to save $1000 in 3 months". Then, ask ChatGPT how you can do that by giving it the details of your paycheck, expenses, etc.

2️⃣ TRACK EVERYTHING

Track every dollar you spend with an app like Mint or Personal Capital to find out where the bleeding is coming from.

I liked using my Personal Income & Expense Tracker because it forced me to look at my spending and be more cognizant of what’s working vs not.

Do it for 3 months and then do an audit - “do I really want to be spending $800/mo on food? or would I rather spend $400 and use the other $400 on my loans?”

3️⃣ AUTOMATE THE WHOLE THING

Set up automatic bill payments and savings transfers. Almost every single bank allows for automatic transfers (though they DO limit how many per day).

If you’re unsure how to set up your system, purchase our Baddie on A Budget Guide.

It takes more than just cutting lattes to get ahead. It requires mindset, discipline, and planning.

Show Up or Shut Up

When you decide to do things differently, sometimes those around you don’t always agree or support you, and that can be hard.

This came up when I quit my job obviously, but it also came up when I was getting really serious about my finances in 2018/2019 too.

The ‘friends’ who no longer benefited from my being budget-conscious by saying no $8 lemon drops or lattes, soon faded away.

It made for a really lonely time but I knew it’d be temporary (sometimes being alone and in solitude is required in order to make progress without being distracted).

In this episode of Corporate Quitter, I share a candid look into the challenges of showing up for oneself and others, especially after leaving a corporate job.

Listen in to gain practical tips on setting boundaries, making new friends, maintaining relationships, and handling conflicts.

Ep 155 - Show Up or Shut Up: Find Friends That Show Up For You