How We Paid Off $80k in 1.5 Years

The first time I looked at my monthly student loan payment I cried. Hysterically. For a solid week. I owed roughly $70,000 in undergraduate loans (thanks Grove City) and my monthly minimum payment was around $500 on a fifteen year payoff plan. I hadn't even finished half of my Master's degree or added in my husband's student loan payments yet. (Luckily, his was only $36,000... however we both went to Grove City. Talk about an inconsistent financial aid system). After being blessed to work at a company who paid for half of my graduate school expenses, as well as finding a graduate school that was affordable, I ended up with another $20,000 in graduate school debt giving my husband and I an whooping $126,000 in debt at the ripe age of 22, approximately $1,000 in minimum payments a month.

Yesterday, we hit the $50,000 mark and baring any unforeseen circumstance (of which there always seems to be one) we are on track to completely pay off this balance in nine months or less. That means we'll have paid off all $126,000 of debt in roughly 2.25 years. Cue the choir.

If you're anything like me, you're rolling your eyes thinking "Good for you. Way to make me feel like crap. I couldn't do that even if I wanted to." I hear you. I know where you're coming from and I'm here to tell you it is absolutely possible to pay off your student debt- while still having a life! Over the past two years my husband and I have also been able to buy a house, take three international vacations, buy a car, and live a generally satisfactory lifestyle for two young marrieds. We're also not millionaires, and our parents don't give us money. So how did we do this, and how can you do this too? Read on below.

1) Cut your bills.

We keep our bills low. That is the best way to get a jump start on paying off your loans. Let me give you some practical (and in some cases ridiculous) examples.

• We use Republic Wireless for our phone service. If you haven't heard of them, I highly recommend a Google search. Our current phone plan is $65 a month for two lines as compared to the $140 a month I was quoted for Verizon yesterday (after a corporate discount of course). No, we don't have the coolest new iPhone. Guess what, we don't really need it and instead we pocket the extra money every month.
• We adhere to a strict grocery budget. People really spend a ton of money on groceries, and half the time what we buy goes to waste, so in essence you're throwing out your money. We fell victim to this pattern too. The cure? Meal planning and buying in season. Each week I make a very rough meal list and only buy the food to make the items on that list. I try to stay in season (Strawberries in February? Expensive and probably rotten). It has saved us a TON of money (our grocery bill lowered $100 a month) and we don't waste almost any food. Also, learn to shop at stores like Aldi (it's not gross, they are really up-ing their game and even have organic foods now) and shop around for the best prices. We don't get our meat and produce at the same place each week.
• Heat and air conditioning are a luxury. So are lights. Okay, not really, but most of us do waste a ton of electricity blasting the heat and air conditioning, leaving every light on in the house for weeks. Stop it now. In the winter, keep your heat lower and wear a stinking sweater. You won't die in July if it's 80 degrees in the house- they've been doing it for, I don't know, centuries. Your loan payments will thank you.
• Avoid car payments as much as possible. I'm not sure what it is about 20 something's, but they always seem to go out and buy a fancy expensive car as their first adult purchase (a car that probably costs as much as their student loans). Used cars my friend. A HUGE help to us is not having a car payment. We drove the same cars we had in high school until they died and then we bought used cars in cash as a replacement. I don't have a hot rod. I have a 2009 Ford Focus. It gets me to work just fine and I don't have to spend a few hundred dollars a month in a car payment.

2) Be careful in your housing choices.

This is the second biggest pitfall I see for people my age (under thirties I'm looking at you). A lot of my friends got wrapped up in living in really fancy apartments, right downtown or on the mainline (if you're familiar with Philadelphia- it ain't so cheap). In essence, they were apartment poor, putting huge swaths of cash into their rents every month. Burn that money. That's all you're doing with it anyway.

Instead of doing that, we chose to rent (and then buy) a townhouse in a more rural and more affordable suburb of my office. This came with some real sacrifice, my commute on a good day was around 40 minutes, but let me tell you we were able to really save money AND live in a significantly roomier place. It's all about choices.

3) Stop wasting money on stupid stuff.

I encourage all of you to track what you spend for an entire month. I mean every single nickle and dime. Every latte, Wegman's salad, and tip left at happy hour. Then at the end of the month look where your money went. I guarantee you'll feel like an idiot- I did. We tend to spend a lot of money on little things that seem insignificant. Small indulgences if you will. But do the math:

One Grande Starbucks Skinny Vanilla Latte (because let's be real no one gets a tall) in Pennsylvania costs on average $4.65. If you go three times a week you've spent $13.95. That's $62 a month, or $753 a year. You could go on a four day mini vacation for that. Drink your coffee at home.

Now let's do the math on eating out for lunch. The typical lunch in a work cafeteria costs around $6.00. If you buy every day that's $30 a week, $135 a month, and $1,620 a year. That is almost eight months worth of groceries. Pack your lunch.

Believe me when I say the small things add up. Cut them out and you'll be amazed at what you can save.

4) We got better jobs.

Now hear me out on this one. Don't roll your eyes and check out thinking "well lucky you." Luck had nothing to do with it. I didn't say we were given better jobs, we earned them. I knew in order to pay off our loans and live the life we wanted, we had to make more money. So I went to graduate school. I worked long hours. I showed up on time and gave my best to every job I had. And you know what? It worked. I got great raises and always hit my bonus. I got promoted and when I had to leave my company to relocate my hard work was recognized by my resume and I found an excellent job in New York.

My husband did the same as well. He started out his adult career working as a plant manager at a concrete factory. It was the most awful job you can think of, he worked 60 or 70 hour a week, often times leaving at 2 in the morning and not returning until well after dinner. And he made like $4.00 (slight exaggeration... slight). So he pounded the pavement interviewing until he found something better. Once he got his new job he showed up with enthusiasm, studied hard, and learned quickly. He worked on getting industry designations and he volunteered for opportunities. He didn't complain and was flexible when reorganization was necessary. And you know what? It worked. He was offered an unbelievable opportunity in New York that came with a better salary and cost of living.

It's also worth noting that I have worked two jobs to help pay for extra things like Christmas or vacations. I'm still prone to the occasional side gig for some extra cash.

In conclusion.

We had to work our butts off sometimes. We had to make sacrifices (like moving away from our friends and family to pursue opportunities in New York). And no, it wasn't always fun.

But the thing is, life isn't always fun, or at least not at first. Sometimes you have to think big picture and put off the satisfaction you want today for the bigger satisfaction in the future. But you get out of life what you put into it. Don't get discouraged, small changes can have big impacts. I was in your shoes, rolling my eyes, thinking I'd die and my gravestone would say "Still Owe's Uncle Sam" but you control your own financial security and you can work your way towards financial freedom.

I look forward to this time next year when I can relish in a zero loan balance. I don't think it's an unreasonable goal any longer, and you shouldn't either.