My completely unsexy debt payoff story

YOU GUYS. I DID IT.

After my May spending report, that “student loans” line item is going to disappear and I’m incredibly, incredibly happy about that.

I did it and that’s fucking awesome.

But my first and primary instinct after saying that is to immediately downplay the significance of that accomplishment. Because I didn’t pay off $50,000 or $30,000 or even $15,000 worth of student loan debt four years after graduation. In fact, I had less than five figures of student loan debt—my total loan amount came to about $7,000.

What I paid in total over the last six years (the second column is amount of my payments that went to my principal and the third is how much I paid in interest)

Thankfully not a huge burden for me

I had lots of help paying for my useless liberal arts degree. My school offered me a massive merit scholarship that covered the bulk of my tuition and was the only reason I could even think about going to a private university in DC. I had a few other small scholarships, including a Girl Scout one for one of my semesters abroad.

Because my mom’s been with her employer so long, she was grandfathered in for a generous tuition benefit that we used for some of my later semesters, especially when I was no longer their only kid in college. One of my grandparents chipped in to help cover my room and board since unfortunately scholarships are often only for tuition. My parents paid for the rest.

My dad lost his job halfway through my freshman year and it took over two years for him to find another one (age discrimination is so real, y’all. He couldn’t even get temporary manual labor jobs because who wants to hire a guy that’s nearing 50? 🙃).

Talk about financial anxiety. I cannot describe the amount of guilt I felt going back to school after winter break (this happened right at the beginning of January. Happy new year!) for costing my parents so much money, even though they said not to worry about it. That horrible, horrible feeling I felt in the pit of my stomach for the entire next semester and beyond was a huge contributing factor to why I still feel so much money anxiety to this day, even though I’ve been working on getting my financial shit together for more than a year and I’m doing well.

My FAFSA was already in for sophomore year and the financial aid office declined to adjust my financial aid package retroactively even after appealing it (thanks, you jerks!),[*] which added guilt on top of guilt that I couldn’t even get my sophomore year to cost less. After that the numbers finally reflected our financial situation, so I had both a Pell grant and work-study my junior and senior years.

So I graduated with “only” about $7,000 in loans. Compared to people’s stories about paying down $10,000-$20,000 of debt a year, taking multiple years to pay mine off seems laughably insignificant. And I got a massive $1,500 gift a few months after graduation. So really it was more like $5,500, which makes my pace even more embarrassingly glacial.

I did it wrong

Y’all have seen my spending reports. I don’t exactly have a spare $10,000 (or rather $7,000) laying around to just throw at my debt; I never have. That’s no excuse for not having hustled to bring in an extra few thousand dollars so I could pay it off years ago, but it wasn’t enough of an emergency to feel like I needed to bring in an extra few thousand dollars. Because let’s be real, my excuse is that I’m exhausted enough as it is working one (and now two) jobs. And since I’m in the fortunate position of making more than enough to cover the basics, I believe life is for occasionally living, not for constantly thinking and stressing about and working to bring in more money.

Plus, let’s not forget, I was completely clueless about anything to do with personal finance until a year and a half ago. When I graduated, I was under the impression that even if it took me the full eight or ten years to pay off my loans (I’ve honestly forgotten my repayment terms by this point especially since I was always on track to pay them off early), that was fine. After all, everyone has student loans and it takes them years to get rid of them. It’s just normal. I could afford my monthly payments and was paying extra every month, so ostensibly nothing was wrong with that situation. 🤷‍♀️

And yes, my highest interest rate was 4.25%, which means paying down my debt on an accelerated pace was suboptimal when I could’ve invested that money instead and enjoyed a way higher rate of return in the market the past few years. Hindsight is always 20/20. What’s not suboptimal is the fact that that debt is gone and from here on out that’s $110+ that’s now mine every month.

However you look at this, according to someone else I did this wrong.

Good thing personal finance is personal and how I paid off my own loans was my choice!

Credit where credit’s due

I’ve always been thankful for every penny my parents and grandfather paid for my college education; I knew that having $7k in loans put me in a much better position than the many, many others who graduated with significantly more debt (and why do you think I’ve never seriously considered grad school when I don’t know what degree I’d get, even when my mom was pushing me to go straight into another program after I left undergrad?).

I’ve never made a ton of money. I spent two months unemployed and spending down my savings after I graduated, so when I got my first official job I was essentially starting from zero (and a negative net worth thanks to my loans). That’s not an easy place to start from when you don’t make more than a moderate income.

What that screenshot above helpfully tells me is how much I paid on my loans (plus some of that amount was origination fees, sigh) and how much I ended up paying in interest. Really I paid off $8,000 once you factor in interest.

But what it also shows is that when I could afford to (or remembered to), I was making payments on my loans even before I graduated. With the grace period I didn’t have to start making payments until 2015, but aside from the payment at the top there, which must’ve been my first auto payment, every single other one of those payments happened before then. A few of my loans were unsubsidized and accruing interest while I was still in school, so I was attempting to alleviate that by sending some money over every now and then. I couldn’t pay much and I wasn’t doing it regularly, but at least I was trying.

And I always, always paid more than my minimum payments. I chose $100 at first because it was a nice, round number (which at some point my loan provider decided should be $100 + a random $10.25 each month because why not?!). That wasn’t too much over the minimum when I was first starting out. But it was still some extra, and as I paid off more, that $100 went farther each month.

Debt-free?

I think part of the reason this doesn’t feel as big to me as it should is because at this current moment I don’t have $0 of debt. I didn’t plan well enough to pay off the month’s spending on my credit cards to coincide with my last student loan payment, so I don’t have a neat little picture of my assets/liabilities ratio with no liabilities. Oh well.

Plus I just opened a new card for the points (#babytravelhacker) that also happens to have a 0% interest rate for the first year. So I’ll be floating my car insurance payment and some of the rest of my minimum spend. It won’t be for very long, just a few months, but yes, I’m briefly going back into a bit of debt because floating just a few thousand feels better to me than gutting my emergency fund (and my cash flow isn’t yet where I’d like it to be). Besides, I accidentally paid a few hundred extra on my student loans in April, which I was planning on using for my car insurance instead. I wasn’t actually planning to pay off my loans for another few months so this post is ahead of schedule.

Debt is debt so it’s really not different, but that very deliberate move does feel very different (and a lot better) than the consumer debt that I’d been carrying for the last few years and paid off a few months ago. Plus wanting to finally be debt-free for real is going to be motivation for me to get rid of that float sooner.

It’s not a sexy story, but it’s mine

So no, I don’t have a sexy debt payoff story at all. I didn’t save half of my income right out of college so I could pay off my debt right away. I didn’t pay off truly intimidating and inspiring amounts of debt in a single year.

But my story isn’t anyone else’s story, and I’ve written here multiple times that comparing your journey to someone else’s is counterproductive (especially since we’re all freaks who think saving only 30% of your income means you’re not doing well—OKAY, IT’S ME. I’ve thought that multiple times—when for people outside of the FI community that’s unthinkable). Plus I’m sincerely grateful I’ve never needed to pay off so much debt in a short amount of time; I’d much rather have only paid $8,000 total when all was said and done instead of significantly more. So for once I’m going to take my own advice and quash the knee-jerk reaction to downplay the significance here.

I just paid off my student loans and that’s totally badass.


[*]Actually, that’s not quite true. I think they adjusted it so I was eligible to take out an additional $1,000 in loans. 🤦‍♀️

18 Replies to “My completely unsexy debt payoff story”

  1. No having student loan debt is sexy. Maybe the journey isn’t sexy but the end result is. Congrats on your great accomplishment. I hope to join the ‘no student loans’ club later this year

  2. Congratulations! You should be so proud of your accomplishment! Whether your student loans are a ‘small’ amount or not, you still paid them off and that is freaking awesome. I will have a celebratory cheer (and drink) for you in your honour!! Woop woop!

  3. Hey congrats on paying those students loans off! That’s an awesome feat regardless of how much you had or how long it took. Getting rid of student loans is no small task and you should be proud!

    I’m sure that extra money you don’t have to pay toward the loans each month is going to be a great feeling!

  4. You’re killing it and you should be proud of what you’ve done. I also struggle with comparing myself with other stories on the internet, but i think we’re our own biggest critics. Balancing a life you enjoy while also making steps toward to win with money is about the best anyone can do. Keep it up!

  5. Wow congratulations! Definitely don’t minimize your accomplishment. This is huge!

    Now it’s time to start stacking those Benjamins, it should be smooth sailing from here on out.

    Cheers!

  6. Congrats!! It doesn’t matter how you paid it off, just that you did it. Regardless of how debt is paid, I guarantee that someone can always pick what could have been done better, so it’s better to just not worry about it at all 😀
    Have you thought about how you’re allocating that monthly payment now? The first thing I did when I finished paying off my debt last year was to start funding a personal investment account. Like you, I also agree that it’s important to live while you save, so it’s not like I reallllly needed to add to my already high discretionary spending, heh.
    I hope you’re taking the time to celebrate being free of student loans!

  7. Yay, Erin! What’s going to happen to the extra $100 or so now that the debt is gone?

    I can definitely relate to downplaying your story. I had $17k to pay back myself, and I honestly saw it as just another bill to pay for seven years. No sacrificing my lifestyle or anything, because I hadn’t calculated how much interest I was paying. Past, silly Luxe!

    Also, side note: in your spending reports, have you ever thought about also including how much you are saving monthly (401k, and post tax)? Thought that might be helpful for other folks with similar incomes.

  8. Totally awesome Erin, huge congrats! So what if it’s not sexy and if it wasn’t 20 bajillion dollars of loans, the bottom line is you have that magical 0$ balance to look at. From here on out it’s onward and upward in positive territory – great job!

  9. Yay!!!! Might be a smaller, less intense story than some, but it’s still a really really big deal, considering 99% of the population doesn’t do it.

    As far as calculating how much I actually paid on my $24k of loans at 8.5% interest… well, I think I might be happier not knowing.

  10. Congrats Erin! Really enjoyed this read! I think this is very sexy 🙂

    My college roommate’s dad also lost his job (during the recession) and it happened after financial aid so on paper it seemed like they had more money than in reality so my mate was stuck with a hefty price tag. That was my first adult lesson in how unfair life could be. This is a great win story for all the ones out there who have struggled.

  11. Woop woop! Hooray for no more student loans!

    I especially liked your comment that even when you pay only a little over minimum, it still adds up to make the payment go further every month – which is exactly what I’m seeing as well. It’s so encouraging to watch the monthly interest go ever down!

    Way to go!

  12. Congratulations! That is such a big deal, and I’m so happy for you.

    Also, can’t wait to hear more about your adventures in travel hacking. I haven’t taken the leap yet but… I’m intrigued!

  13. Getting out of a debt after more than 4 years I think it’s a really great success and besides the financials, it gives you the confidence that you can do it!

    Congratulations, I’m sure this wasn’t easy even if it wasn’t a big burden, it’s something to stress you every month!

  14. Congrats on paying off the debt! No matter what amount you started with it always feel good to be done with the. One less thing to worry about!

    I think you made an important point talking about how you may have been better off investing your money rather than putting extra money towards your student loans. I am in a similar situation now where my student loans have an interest rate around 4% but the stock market on average returns around 7% a year. So really i would be losing out on 3% if i put more money towards my student loans instead of investing it. On the other hand, being debt free can give you piece of mind and help out your ability to get other credit (such as a mortgage for a home). Ultimately i think it all comes down to the individual to decide what is most important to them.
    Great article!!

  15. I’m so excited for you! My and I are on our debt repayment journey right now. His family invested in Amazon when it was a fledgling company, so he was able to graduate debt free, but I have 30k in student loans eating a hole in your stomach. It’s so impressive what you’ve done!

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