In 2018, journalist Mandy Velez penned a story for us (called “Here’s How I’m Paying Down My 40K Student Loan Debt In 3 Years”) on her strategy to pay off the remainder of her student debt. When she graduated college, she set the goal for herself to pay off all of her debt by the time she was 30. Just a few weeks before her 28th birthday, she paid off a total of $102,000 in debt (including interest). Here, she shares exactly how she achieved her goal of being totally debt-free.
I never imagined that two weeks before my 28th birthday, I’d find myself standing in a cemetery to celebrate. At Trinity Church in NYC, I was dressed in full funeral garb, holding silver balloons that read $102K. Even more unbelievable than the situation, was that the balloons represented the total amount of debt I had paid off—in six years—and that I had done itbefore I turned 30.
Before I tell you how I paid it off, I want to explain how I, a Latina woman working as a journalist in Manhattan, gets into that kind of debt in the first place. Long-story short: I wanted to go to college and didn’t have the money to.
Student loans were never brought up in the college conversation growing up. As part of a working-class Puerto Rican family from Philadelphia, where livingpaycheck-to-paycheckwas the rule not the exception, the goal they set for me was always get a degree, no matter the cost. College was the ticket out, a way to better oneself and attain success at a level that my parents and grandparents never could. So when I proudly graduated from the University of Pittsburgh in the spring of 2013,the $75K loan billshook me. Image a full-blown panic—though I’m guessing if you’re part of the$1.4 trillion debt crisis, you don’t have to.
It was sad to think about. I’ve been pretty decent with money my entire life. I saved my first $500 by the time I was 10 and I have never owed anyone anything, let alone thousands of dollars. To have this huge burden weighing on me after graduation just didn’t feel right.
And that’s where my pay-off journey began.
In the year after graduation, scared at those dreaded payments I would soon face, I did what most millennials find themselves doing when they have a question they don’t know the answer to: I Googled it. I typed in “how to pay off loans fast,” or something to that effect, and found a debt payoff called the Snowball Method accompanied by a payoff spreadsheet someone else made long before I found it. Sweet relief.There was a way out.
For the next six years I paid on average of $1,000 per month toward my total debt payments. Every handwritten budget I made had “loans” at the very top of the list—everything else came second. I lived with an ex-partner who split rent with me, then with other roommates in New York City, and at last with my current partner, in a studio. I’ve lived in the northernmost part of the city, where people would stare in amazement when I told them the cross-streets.Manhattan goes that high up?I’ve also lived in a shoe box in the Bronx and a bug-infested five-floor walkup.
Tax returns were my saving grace, as was the fact that my parents paid for my cell phone bill, giving me the opportunity to live the closest thing to anormal life.Still, the burden remainedand I pushed down the guilt and unease that came with knowing I had over $70k in debt looming.
But this past January, something in me broke. I didn’t want to pay anything more. I wanted to be free of the burden that kept me from living the life I wanted to have: a home, a wedding, the peace of mind that comes from knowing that if I lost my job (again), I would never again sob in the fetal position in bed, wondering how I would pay my rent and keep the interest on my loans from racking up, which ranged from 6 to 12 percent.
Turns out, getting pissed off worked in my favor. In eight months, and with 6K drained from my savings account, I killed the remaining $32K of my student loans for a total payoff of $102K. It wasn’t easy, but here are the ways that I was able to pay off all my debt, plus the $27K in interest that accrued along with it. Here’s what I learned along the way.
I set goals
Like I mentioned above, the first thing I did when I graduated was set a goal: Pay off my loans fast. Albeit it was a little vague, having this mission enabled me to actively include my loan payment in my budget each month and make choices based off of that going forward. I set another goal of paying off the loans entirely by the time I turned 30, which I ended up accomplishing two years early. Even if it’s a small goal, setting it will kickstart momentum.
I paid more than my miminums and used the Snowball Method
The snowball method is one of the two biggest payoff methods out there (the other being the Avalanche Method.) The Snowball method entails listing your debts from smallest to largest and paying everything extra you can to the smallest one, while making just the minimum payments on the others. When that debt is paid off, take the money you were paying toward it and add it to the payment amount you throw at the second smallest debt. This continues until the loans “snowball” and you become debt-free! Using this method helped me to see success as I went through my journey, knocking out each of the five loans I had one-by-one. It creates a faster payoff and saves a ton of money on interest, as the longer you have a loan balance, the more interest can accrue.
I cut my budget and lived below my means
When I decided to get serious in January 2019, I decided to only spend my day job paycheck on the absolute necessities, with a budget of $2,000 per month. First step, I looked at my bank statements and circled things I spent money on that I couldn’t anymore. It was a lot of Ubers, food (work lunches and extra groceries) and impulse purchases—from getting my nails done to buying makeup.
I then listed the essentials I needed in my budget, which mainly consisted of rent, medicine, internet/cable, subway card, random items like toilet paper and then loan payments. In addition to cutting out the extras from my statements prior, I budgeted money to these essentials and only these essentials, with a few dollars for “me.” And I did not stray.
I said no to extra spending: I used every last drop of my makeup and cut out buying most of the “extras” altogether. I didn’t buy tons of new clothes. I didn’t go to brunch or eat out. I didn’t go on weekend trips with my friends. I picked and chose how often I visited my parents in Pennsylvania. I challenged myself to “no spend” weeks and ate a lot of salads and other affordable food. (Thankfully, my work provides breakfast and snack items.)
I picked up a few side hustles
Side hustles played a big role in the amount I could throw at my debt each month. I signed up for dog-walking apps and posted in a neighborhood forum website called NextDoor.com about being available for extra work, from babysitting to long weekend pet-sitting. Sometimes I’d walk dogs up to five times a week, on-of-top of babysitting or cat-sitting.
I worked overnights sometimes as a TV show extra, which could pay anywhere from $100-$200 a shift. I also sold clothes and items I had laying around and consulted for companies in my field, social media.
I asked for and received a raise
I can’t stress enough that I would not have been able to pay-off my debt in the time that I did without the privilege of having a full-time, well-paying job. I never made more than $80K annually during my journey (I started at $40K) and it enabled me to live so below my means and still survive.Because of this, I was able to advocate for my hard work and ask for and receive raises throughout my pay-off journey.
I worked part-time as a freelance writer
Another opportunity I was able to pursue thanks to my experience as a writer was to freelance write. I found a gig that paid around $75 before taxes per article. I wrote about 25 of them a month, which sucked up almost all my free time. There was a point where it put a strain on my relationships and mental health, but I knew it was a short-termpeople who aren’t writers, and if circumstance permits, I’d explore a part-time job that can bring in extra money, in the field or any industry of their choosing.
Surround yourself with supportive people
Last but not least, I know for a fact that having a support system contributed greatly to my large and quick payoff. My parents cheered me on. My friends and partner stayed by my side despite not being able to hang out with them all the time, which encouraged me to continue. I also had support from strangers online, who shared their stories with me and made me feel like I wasn’t battling my debt alone. This isn’t necessary to paying off a large amount of debt, but it sure helps.