Hey $avvy readers! We have a great student loan repayment story to share today from Lauren Hartnett. She is the creator of Common Cents, a financial literacy blog with a common sense approach to money management. Her content covers everything from student loans to credit scores to planning a DIY wedding; she was recently featured on The Budget Savvy Bride and Loan Free Student and is currently employed as a professional Cost Analyst. Lauren works to promote debt freedom, appreciates coffee & crosswords, and would love to discuss finances with you over a cold beer! – Enjoy T$C
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My Student Loan Repayment Story
In 2009 I graduated college with a Bachelor’s degree, high hopes for the future, and over $30,000 in student loan debt.
I’d paid my own way through school, working 3 part-time jobs in between my class schedule to keep up with rent, bills, and groceries; I received about half of my tuition in grants, and to cover the rest I took out federal student loans.
Leading up to the marathon that I was about to embark on to pay them back, I was in rough shape; I had no training to speak of, and no road map for where I was going. What I did have was determination, which was about to be put to the test in the years to come.
The Starting Line
After a short stint in grad school where I deferred my loans for an additional semester, my grace period finally came to an end in November of 2010. I’d taken a long, hard look at my finances and prospects, and decided that I was better off working than digging myself further into debt.
All in all, I had 9 student loans through 2 different services, totaling $30,970.00; at 23 years old, this seemed like an impossible task.
I was new to the job market with little experience to speak of, but I got a full-time job working for a construction firm making $15/hour doing administrative work, and I started tackling those payments one month at a time.
I didn’t know much about my student loans at the time, but I did do some research on payment plans to try to alleviate some of the burdens. I settled on the graduated repayment plan, which started out low and increased every 2 years under the assumption that I would make more money over time.
This simple change helped me immensely; looking back I was barely scraping by, so having those lower payments up front gave me some breathing room to get my feet under me for the long road ahead.
Take away: know how much debt you have and create a plan to pay it off.
Getting Into A Rhythm
By the time my first payment increase rolled around in 2012, I was at least ready for it; the increased payments still hurt, but with a couple of years of job experience I was making a little more money and could afford the change (barely). I was making more money but had also moved and changed jobs, putting a strain on my already tight budget.
By 2014, I had a better paying job again, but once my payments increased it felt like I kept getting pulled back to the same place – living paycheck to paycheck and unable to get ahead.
I was making my payments and tracking my balance, but progress was slow; the interest that had accrued was eating up most of my payments, and every step felt sluggish and slow.
I was careful to keep up with the minimum payments but really couldn’t afford to put anything additional towards my loans – it felt like a long, slow march towards eternity, and I was sick of it. I decided to make a change and started treating my loans less like a marathon and more like a sprint.
Take away: find a system that works best for you and stick to it!
Picking Up Speed
In 2015 I finally decided I’d had enough of the status quo and took an honest look at where my money was going. I decided to cut back on some indulgences, skip a few coffees, and put a meager $50 extra towards my smallest loan.
It hardly made a dent, but there was something so satisfying about seeing that entire $50 come off the principal rather than just going towards interest. I decided right then that I not only wanted to pay these things off, but I wanted to do it fast.
After another job change and a big jump in pay, I decided to put $100 extra each month towards my loans. In August of 2015, I paid off my first loan in full – it was tiny, the beginning principal was only $875, but it was a victory!
Now that I could see actual progress, I started putting anything extra towards my loans; I used my tax refund in 2016 to pay off my next smallest loan of $1,000 and continued making additional payments every month. Now that I could see things moving along faster, it only inspired me more to tackle these student loans with everything I had.
Now that I could see things moving along faster, it only inspired me more to tackle these student loans with everything I had.
Take away: make sacrifices and use the leftover money to make extra student loan payments.
The Halfway Point
At the beginning of 2017 I set a couple of financial goals for myself, the first of which was having my loans halfway paid off by the time I turned 30 in June. It was a realistic goal but only barely; I was going to have to dig deep to make it happen.
In March, I put my entire tax refund towards my loans, and paid off my third one; in May I received my bonus and used it to pay off another. By the time June rolled around, I made an extra payment 2 days before my birthday and hit my goal – I was halfway there!
Reaching this point wasn’t easy, and a lot of sacrifices were made along the way; I can’t say that paying off my student loans has been fun, but it has been rewarding.
Looking back at those first few years when I watched most of my payment go towards interest is painful to think about, but seeing where I am now and how much I’ve learned gives me a second wind.
Tackling the second half of these student loans won’t be easy either, but now that I’ve got some miles under my belt I feel far better prepared for the challenge ahead.
Take away: Stay motivated throughout your journey, you got this!
The Finish Line
While I’ve still got a long way to go before I pay off my student loans in full, celebrating the smaller milestones along the way has kept me on track. I find that with each small victory, I get a new sense of energy and determination to continue forward. Taking the time to appreciate where you’ve been gives meaning to where you’re going.
I know I’m just one of many out there with student loan debt to tackle, but if I can give any advice it’s this: know what you’re up against. Having a game plan is key to tackling any obstacle, and the better prepared you are the more likely you are to come out ahead.
So take a deep breath and get over that hill; the view is great from the other side!
Take away: keep your eye on the prize and celebrate the small wins along the way.
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