It’s official. I am debt-free. I was 21 when I embarked on my goal; I wanted to pay off almost $60,000 of undergraduate student loan debt in five years or less. I had good money sense, but limited financial literacy. I didn’t follow all the money rules. For starters, I should have built an emergency fund. Instead, I jumped feet first into the tumultuous waters of debt repayment with unique budgeting tips, and I’m glad I did.
It helps that I never had money to start with. I learned a fair bit as an English major, but realistic salary expectations weren’t covered in any of my classes, or even by career services. I wasn’t versed in what to expect from a salary. At my part-time retail job, I made minimum wage — $8 an hour. I thought $30,000 was a normal post grad salary. I was floored when I was offered $32,000. It seemed incredible and without any fanfare — by which I mean, asking questions or negotiating — I accepted the job offer.
50/20/30 are the generally accepted ratios of conventional budget wisdom, but necessity balanced my books for me. Doubling my monthly student loan payments was the solution to paying off my student loans in half the expected time. I was only supporting myself, and I knew there wouldn’t be a better time to commit to a sparse lifestyle. I also knew I had to make it a habit as soon as possible, so I wouldn’t get used to having money to spend freely. It was non-negotiable. $800 would go to my student loans, and the rest of my budget was built around that. I always did a bi-weekly budget based on payday. Here’s what it looked like while I was still in my first job:
Paycheck 1: $1054
- Rent – $625
- T-pass – $70
- Gas – $15
- Hair – $40
- Groceries – $60
- Pocket money (2 weeks) – $40
- Monthly Dinner Out – $40
- Laundry – $20
- Savings – $100
Paycheck 2: $1054
- Student Loan Payment – $800
- Cable Bill – $29
- Groceries – $35
- Visiting family back home – $35
- Netflix – $8
- Bank Fee – $5
- Oil bill – $87
- Electricity – $22
- Friend’s Birthday gift – $10
A budget is a necessity, but it also has to be incorporated into your mindset. Over time I came up with unique budgeting tips, rules, and philosophies that supported my payoff success.
1. “The Pen is Mightier than the Sword”-Budgeting
There are plenty of budgeting tools out there, but none work better for me than pen and paper. I keep a financial notebook, one equipped with its own mint-green pen, and I do all of my budgeting and forecasting in it. It makes me an active participant in my finances. Pen-and-paper budgeting also helps me internalize the numbers more than a budgeting app does. Once I got over my granny fears of having my money stolen from the internet, I did make a Mint account. It’s great for tracking spending trends and for seeing my budgets in the big picture, not per paycheck as I see them.
2. If I Haven’t Checked My Balances am I Even Awake?
I’m a die-hard morning person. Two things I have to do before I leave the house? Make my bed, and check my balances. There’s nothing worse than a nasty surprise, and checkin is a habit from right after college graduation. The day of graduation, over $1,000 was stolen from my account. I didn’t have the money, and ended up with a dramatic negative balance. I didn’t realize what happened for a few days, but that sinking feeling at the ATM is one I never want to relive. Checking my balances is easy now, as they’re synced with Mint, and it only take a few minutes. Every day is likely overkill, but at least once a week, face your spending.
3. Paper over Plastic: The Care and Keeping of Credit
Credit cards are a valuable tool to have in your financial wheelhouse. One cannot build credit through student loan payments alone. That being said, I refused to get a credit card until I was financially solvent enough to feel confident that I could pay off my bill in full every month. That point didn’t come until two years into my payoff journey. A credit card meant more debt, and another bill to keep track of. I was not financially capable of having a credit card when I started paying off student loans. I don’t regret not using credit cards to supplement the months where it was a stretch to make it.
4. I Have Eyes in My Head and a Calculator on My Phone
Student loans should be checked twice a month. When the bill is received, it’s a good idea to take a look to make sure it’s correct. After your payment, log in, and make sure the payment was applied correctly. Twice a year without fail, I had to call my student loan providers to get a bill or a payment corrected. The party line of my servicers is that the system glitches. Since that’s the state of affairs, the only responsible thing to do is to stay on top of billing and payments.
5. Was that CVS or a Stick Up?
There’s a CVS on every block in Boston. Most everyone is capable of walking in and getting just the item they need. That statement does not apply to me. I would always end up leaving with multiple things I needed. I don’t know if I spent more than I’d planned because there was always a sale it made sense to take advantage of, or because it was easier to grab all my necessities at once. Either way, I always spent more than I wanted, and finally made the decision to ban myself from CVS. I went cold-turkey for thirty days, and now I can walk in for floss — and walk out with only floss. Your CVS might be Target, it might be Groupon, maybe Amazon, but reassessing seemingly harmless spending relationships can’t hurt.
6. Girl’s (One) Night Out
I didn’t go out as much as other people did in college, but I thought I’d make up for it postgrad. I quickly found that it’s easy to spend more on a night out than you would in a week of not-going-out. If I found nights out satisfying, they would be worth more, but as they stand, once a month is adequate. This rule doesn’t just apply to da club — it also includes plays and the movies. I enjoy them, but if I’m only having one outing, I’m sure to make it count.
7. Two’s Company, Three’s a Crowd
I’ll spend about $40 on dinner out, or $30 on a GrubHub delivery. My food out budget is set for $75 total, so this rule is an easy and convenient gauge. Now that I don’t have to be exact to the dollar with my budget, I have the flexibility to end up at $80 a month, if it comes to it. This rule has been great to helping me attach value to what I’m doing. I don’t want to order a late meal just because it’s easy. If I’m breaking the seal, then I want it to be for something delicious that I can’t replicate at home.
Same goes for concerts. I enjoy getting together with friends and singing at the top of my lungs at a concert of some pop star we all earnestly love, but concerts have peripheral costs that add up fast. I don’t have a fixed annual budget for concerts, but I’ll go to two concerts a year and not worry about the night. It’s also a great excuse to pass on seeing performers you’re lukewarm on.
8. Cash is King… of my Grocery Budget
My grocery budget has matured since the early days of post grad. I used to spend around $20 a week at Trader Joe’s, but once appetizers stopped being the mainstay of my diet, my weekly budget upped to $75. The tricky part is that groceries aren’t a fixed cost, and guesstimating leaves wiggle room for overspending. To combat this issue, I bring $100 cash to the grocery store. This keeps me in a good mentality, so if I don’t go to an ATM or get cash back, I still stay on budget.
9. It’s the Thought that Counts
For a long time, I didn’t budget for gifts. I saw them as one off spends, and they almost always snuck up on me. I’d end up grabbing something quick and my budget would dip into red. I have a weekly pocket money budget of $20. This rule manifested when I had to grab a last-minute gift for one of my siblings, and I had to use the pocket money budget to cover it. Instead of spending the full $20, I got creative and got her a thoughtful gift for $15. I liked how the restriction kept me present. I’ve been practicing the “$15 gift” ever since. I enjoy the challenge, and haven’t received a single complaint yet.
10. Aw, You Shouldn’t Have
I did not spend years not buying myself anything. I always had my goal in sight, but there were so many times I felt discouraged and bitter, and times when I second-guessed if paying down debt so aggressively was worth it. I started an Amazon cart, and throughout the year I’d add items, take items out, and shop around for the best price. Twice a year, I’d treat myself to an Amazon cart clear out. My cart never tipped over $100, and it ended up becoming a fun tradition. You’re living your life every day, and you have to make now worth it, too.
These rules aren’t applicable to everyone or every situation, but they ended up being valuable guideposts for me while I fought towards my goal. Now that I’m debt-free, I’m not going to forget about them. These rules have helped me develop good financial habits, and with them in my pocket, I’ll get started on my next goal: my long overdue emergency fund.
This post was originally published on May 10, 2017, and has since been updated.
Jane St. Page is a New York to Boston transplant. 9 to 5 you can find her defining her place in the corporate world. Jane’s free time is spent writing, working out, and learning about any topics that interest her. She prefers to use a pen name.
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