Are you buried in student loan debt and don’t know how to get out from under the burden?
There are a lot of young folks in the same position these days and it is really hurting the basic lifestyle of a college graduate.
But fortunately, there is a way out! When I graduated from my bachelor’s degree, I owed almost $21,000 in student loans and I was working part-time at Apple Store for $14 an hour.
My debt balance was soul-crushing and I had no idea how I was going to pay it all off. But 22 months later I was completely debt-free, had tens of thousands of dollars saved for retirement and was investing in the stock market.
I want to share with you how I did it so if you’re struggling with tens of thousands or more than $100,000 of debt you can feel inspired and motivated to pay it off in record time.
It is possible to pay off over ten thousand dollars of debt per year, as long as you’re committed and you follow these strategies.
The first might seem a little obvious, but a lot of people don’t do it and that’s maximizing your income. It’s no mystery that the more money you have, the easier it is to pay off your debt.
The first step to take on is to maximize what you’re already earning. This might mean working overtime or taking extra shifts, or it might mean negotiating your salary for higher pay.
The most important thing is just that you increase the amount of money coming in and you put it towards your debt.
The second tip that you should do after increasing your income is to keep living like a student.
After I had graduated from my degree, I didn’t go out and buy a car or buy a house. I really just stayed in the same apartment that I was in and kept the same bills that I had as a student.
By not inflating my lifestyle, my money went a lot further — especially because I didn’t have to pay tuition anymore! When you’re trying to pay off debt, it will require some sacrifices in lifestyle, but remember it’s only for a short period of time and you can for sure do it.
You should be spending at least 15% of your net income on repaying your debt. If you’re not it’s time to increase those payments until you are.
The third tip I suggest is to use cash windfalls towards your debt and what I mean by cash windfalls are unexpected large amounts of cash that can really put a dent in your debt.
Because I paid for my school myself, I had tons of tuition credits at tax time. This meant when I filed my income taxes; I usually got a fairly large return.
Instead of taking it on a trip to New York buying myself some designer clothes or a new computer, I put it all towards my debt. This let me pay off thousands of dollars in one payment.
If you receive any kind unexpected large amounts of cash, whether it be from a tax refund an inheritance or even birthday money, don’t blow it! Use it towards your debt.
Finally, one of the best things you can do is devote a single income stream towards debt repayment.
This goes hand in hand with the earning more income. If you can find a second or part-time job, or a hobby that you can do for money use that just for debt repayment.
A few months after I graduated, I got a really nice cushy job with a good paycheck that meant I didn’t have to work two or three jobs at a time anymore, but I still kept tutoring chemistry at the university I graduated from.
I could charge $25 to $35 an hour and see three or four students a week, which gave me hundreds of dollars more each month to put towards my debt.
Tutoring Chemistry was actually the best way to put my degree to use to pay off the student loans that got me it in the first place.
If you can find a small but consistent income stream, direct that entire income towards paying off your debt and you’ll see the balance go down super fast.
Altogether, these strategies will let you pay off $10,000 or more of debt each year. It might feel like an impossible goal now, but you can pay your debt off and live a more relaxed life if you are determined!