How I Paid off $46,500 of Student Loans in 2 years

It has been close to 10 years, and today is the day I declare to the world that I paid off every single penny of my student loans.

Paying off your loans in 10 years doesn’t sound that impressive, but paying off $46,500 (the national average salary) in 2 years and 3 months might change your mind.

Some of the success stories that we read in the big publications start out with a kid graduating college and paying off debt immediately, but my story is different. And chances are, my story is just like yours:

  • You have struggled to pay off your student loans
  • You don’t pay them off right away because they are too big
  • You don’t make enough money
  • Your budget, and for that matter, your life, are not in order

I’m here to tell you all of that happened to me, but my life and my mindset changed. Here are the 5 tips and things I did to pay off my student loans – all on an average salary:

#1. Face The Facts

One of the reasons I did not pay off my student loans sooner was because I was ashamed. A guilty feeling ran through my entire body anytime I received a notice in the mail or received an email from the lender. I barely even peeked at those early statements – I just set them on auto-pay for the minimum payment and looked away in shame.

I remember shortly after started, I put all of my accounts into my profile except for my student loans. I can still remember that sickening feeling I got knowing that I had somewhere around $60,000 in debt when I graduated. I know what it feels like owing someone thousands of dollars that will never go away unless you die or pay off every single penny. It’s tough on the psyche and you feel ashamed!

The moment I faced the facts was when I called my student loan provider and asked to change my payments to something smaller. They were increasing the following month, and my money was so tight that I didn’t think I could fit the change into my budget – at least not willingly. It hit me like a freight train. I needed to face the debt head on, and my budget and money needed to change as well, otherwise the loans would be with me forever. Those bastards still raised my monthly payment, but at least it made me face the facts.

#2. Set a Goal and GO BIG

Setting a goal for paying off my student loans was one of the biggest steps for me in paying off my debt. It meant I was finally serious.

When you set your goal, set a goal that you WANT, not a goal that you think you can do – Go Big. Making $200 payments each month might be what you think you afford, but it is not setting you up to Go Big. Saying I want to pay off my student loans in 12 months – over $2,000/mo! – is Going Big.

Setting a goal tells you where you are today, and where you plan to go tomorrow. Without one, you are wandering the road of life with a backpack full of debt, and each step gets heavier and heavier with no end in sight.


#3. Plan and Budget(s are Sexy)

So you have this big mountain sized goal, but you need to look at your budget and make those numbers work. I had $25,866.26 left in July 2014, I made a goal to pay off this amount in 10 months. If you are looking at the numbers that’s shut-the-front-door crazy @ $2,586 a month. And that doesn’t even calculate interest, so it was more like $2,600/mo.

That sounds impossible, but that’s what I wanted to do – defeat the impossible. I knew I had to make the numbers work, so I kept it simple and made a spreadsheet.

While we want to set a Go Big type goal, we also have to make sure that the plan matches our goal. I knew that each month I could save $1,100 to be used towards my student loan debt each month, but it didn’t happen over night.

Over the last few years I have:

  • Sold my car
  • Paid off my credit cards
  • Switched to a smarter and more affordable cell phone service
  • Cut cable
  • Cancelled gym membership
  • And established a Rock Bottom Budget™ which already included my monthly payment of $199.85. (How do you like that name for a budget?)

This only added up to an additional $1,300 though, and not $2,600. So I had to do more.

#4. Increase Your Income and Side Hustles

When I carved out the $1,100 each month for savings, some of this was from establishing the Rock Bottom Budget™, but another part was increasing my income at work. I became good at my job, showed up on time, worked extra when needed, and even volunteered for extra assignments. In a short period of time I got a raise (I work in corporate America so think pennies, not dollars), and then quickly after promoted. I became a go-to person so much so that they created a new position just for me. I didn’t even apply. Raises got bigger over time, salary and bonuses increased, and all because I tried really hard at work.

Another factor I included in my plan were items that I considered a lump-sum amount such as a bonus, working overtime (for me this only happens 4 times during the year), money I had in the stock market, some of which was my emergency fund and some of which was my attempt at being a genius, and lastly my tax return from Uncle Sam.

I took each one and applied 100% of them towards my debt.

This was one of the more difficult parts to paying off my loans rather than buying something for myself or going out golfing with friends. I had to make a decision and decide what was more important: Paying off my student loans or golfing 18 holes?

When you ask yourself questions like these, the answers become easy. I was taking every last source of income and throwing it directly at my loans to kill them off faster. You should consider it too.

When I’m not at the 9-5 or writing for $0 on my blog, I practice the fine art known as the side hustle. I mainly do clothing arbitrage where I buy gently used and new clothes at thrift stores, and then resell them for a profit on Ebay. I’m pretty good at it too. And knew that if I wanted to kill the debts quicker, I’d have to step up my game and reach for $600-$1,000/mo in profit instead of just $100.

#5. You Have to Stay Motivated

One of the most difficult things about paying off debt is staying motivated. It’s much easier to make the decision to spend more on vacation or go out to eat a few times a month, and then find your extra payment no longer there and “missing.”

To stay motivated I kept it old school, and I kept it new school. I decided to make the old school thermometer graphs on paper and color it along the way. I didn’t put it on our fridge like your children’s finger paintings, but I did put it on our bedroom door where I saw it every day.

It was pretty fun. Every time I would make a big payment, I would grab my green marker and color on up the thermometer. Coloring never felt so good!

I then kept it new school by blogging about my progress and sharing my repayment plan with everyone. The personal finance community was amazing. I heard words of encouragement and motivation the entire way. They don’t see you as making mistakes – they see someone pushing towards a goal just like them and couldn’t be more excited for you.

Old school or new school, I was motivated to pay off my debt. Every morning on my train ride to work, Dave Ramsey told me to pay off my student loans, and every day the thousands of bloggers reminded me that financial freedom needs to be part of my life. Of which debt does not belong.

Personal finance books also helped me fill in the gaps, along with those on travel that will make you not want to have a payment in the world. All of this motivated me in one way or another and kept me focused on reaching my goal.

In Summary…

The official day I paid off the last of my student loans was June 11th, 2015. I didn’t make the 10 monthGo Big goal I set forth to complete, but it didn’t matter in the end. For a little over 2 years I kicked a$$ and made paying off my student loans the focus in my financial life. When I made that last payment I could not feel happier.

In celebration, I went out for some sushi with Mrs. Even Steven (the most supportive wife on the planet) and did the Moonwalk the entire way home. Or at least that’s what it felt like. I walked with a smile the entire way back knowing I had defeated my student loan debt forever. If you see me dancing the streets of Chicago, or smiling while staring off at the skyscrapers, I probably just remembered I don’t have any more debt!

Thanks for letting me share my story. I hope you will join me in paying off your debts someday soon too.

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