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By the time I finished graduate school, I had a little over $65,000 in student loan debt. Luckily, I had a job upon graduation, but my student loan wasn’t the only bill I had to pay; there was apartment rent, the higher electric bill, and even a car note.
I was venturing out into the world as an adult, and the first adult situation I had to handle was debt. I made my student loan payments on time each and every month for the first three years … and then I wanted to buy a condo. I was able to purchase my condo, but now I had a mortgage and a condominium fee to add into the budget.
What I also started to learn was that my salary was not keeping up with the pace of my acquisitions. I got a new home — same salary. I got a new car — same salary. I realized pretty quickly that I would have to get rid of some of my debt in order to have money to reach my other financial goals.
I zeroed in on my student loan debt. That $650 a month was standing between me and living the life that I went to graduate school to attain. And even with on-time payments, I wasn’t seeing the balance decrease as quickly as I thought it would. So I clenched my teeth, rolled up my sleeves, and got to work.
It took five more years. Every bit of five years. Five years of no credit cards, five years of skipping expensive dinners, and five years of only buying clothes when necessary. But at the end of it, I was student loan-free.
The relief that washed over me as I made that last payment was profound. But it wasn’t just that I had more money in my checking account. Paying off my student loans gave me my life back and set me on the path to financial security. Here is how:
1. I had more money to save
When I paid off my student loans, I increased my 401(K) contribution, and increased the amount I saved in my emergency fund. This immediately impacted my financial stability and made me want to save more money. I opened up an everyday savings account and a travel account. I now had enough money to target my savings and save for specific goals.
2. I explored my credit options
When I was carrying my student loan debt, I also had a car note, so I was determined not to amass anymore debt. I paid cash for everything: groceries, gas, clothes, airline tickets. That meant if I didn’t have it in my checking account, I could not afford it.
Once my student loans were in my rearview, I got a credit card. Now I was able to use credit instead of cash. I could put travel charges or car repairs on my credit card and pay it off over time or earn rewards or points when I used the credit card for everyday purchases. This also improved my credit score.
3. There was an immediate lifestyle lift
I was now able to live my life essentially like I wanted. I could travel or engage in self-care without feeling guilty. Since I was saving more money, I could now enjoy brunch or cocktails with friends and when I found myself in need of a mouthguard from the dentist (I used to grind my teeth in my sleep), I was able to pay the $400 out of pocket with no problem.
And finally, I had financial breathing room. I had more money in the bank, I was able to buy new furniture for my condo, travel, and really take care of my health. In total it took eight years, but I look at my life now and I would do it all over again. It was worth it.