When I walked across the stage with my bachelor’s degree in tow and my master’s degree fresh in my hands, I walked away with so much more: $96,000 in debt to be exact. By my approximation, I’d be in debt forever.
After college, I spent the first few years living paycheck-to-paycheck. I was fortunate that my first job provided me with the opportunity to move across the country and make a home. However, this life-altering decision also led to a realization: Life doesn’t get put on pause while you’re paying off debt. I kept thinking that once I did X, Y, or Z, I would have more money to pay off my loans. But the truth was, life was happening all around me and my debt was along for the ride. It made me get serious about paying it off, but more importantly, about finding a balance between prioritizing money and living my life.
Over the years, I hit milestones in my personal life. I switched careers and found a job I love. I bought a house with my then-boyfriend, now-husband. We started a family with two adorable pups, and now we have a baby on the way. In five years, I went from debt-ridden and confused over my career to confidently living life on my terms and seeing the light at the end of the tunnel. Yes, my debt was suffocating at times, but while it had its not-so-subtle ways of reminding me it was still there (hello, $1,000 minimum payments), I eventually took control: I went from $96K in debt to $29K in those six and a half years.
I haven’t reached the end of the road just yet, but I’m 70% of the way there. And I haven’t had to completely put my life on the backburner for the sake of paying off my student loans. I’m not an expert, but I’ve learned to find a healthy balance between enjoying life in the present while taking care of my future self, so I thought I’d share my advice. And it starts with a budget.
Make a goal-based budget.
Get clear on your priorities. Are you saving for a down payment on a house or a wedding? Are you trying to get out of debt as quickly as possible? If you can create a budget that’s based on your savings goals, you’ll be more likely to stick to it. Keep in mind, these goals will change based on the stage of life you’re in. You may be hyper-focused on saving for a wedding this month, but after you walk down the aisle, what’s next on your priority list?
Also, it’s okay to have more than one priority. For example, I was determined to find a career that I loved, which was a five-year process. Along the way, I got married, aggressively paid off debt, and got pregnant. There is no right or wrong when it comes to your priorities, just make sure you know what they are.
You know what you want, now how are you going to get it? If you’re actively working to pay off the debt, how much can you pay? (Here’s a debt payoff calculator and here’s a simple savings calculator) If you’re saving, what do you need to save each month to reach your goal? Crunch the numbers, figure out how you can balance both, and adjust as you see fit. Setting savings goals — big and small — around your priorities will be huge to your success. It gives you something to look forward to while you’re paying off debt.
You will have to make compromises, so prioritize what matters most.
While it sounds simple in theory, you can quickly feel like your debt is suffocating you. It’s an overwhelming load to bear, especially when it’s with you for years. On my six and half year debt journey, I’ve had to learn the give and take that is living your life while working toward the goal of being debt-free.
When my husband proposed in 2016, I had been paying off my loans for less than two and a half years. I was buried in debt, so the thought of saving for and planning a wedding seemed impossible. We were okay having a frugal budget, but we also knew we wanted a celebration that included our family and friends. Eloping wasn’t an option, and we already cut our guest list down to around 110. So after many discussions, my fiance and I decided to have a longer engagement. A year and a half would allow us enough time to plan and save to avoid going even further into debt.
At first, it felt like I was putting my progress on pause, but then I realized that getting married was my top priority. After seven years together, my future husband and I wanted a party to remember. Getting our priorities straight helped me not feel suffocated by my mounds of debt. I was still making my minimum payments, which meant my total balance was still decreasing. Life wasn’t being put on pause; it was being prioritized.
Set realistic goals.
In recent years, I’ve also prioritized travel. Taking dedicated time off work to travel somewhere new with my husband has been important to me. But how was I supposed to save for vacations while also getting out of debt as quickly as possible?
The first thing I learned was that travel is travel, and it doesn’t need to be extravagant, at least for the time being. Right-sizing my expectations from international travel to domestic trips helped us save on the overall cost.
Most importantly, instead of feeling like I needed to save large amounts toward a trip, I saved months in advance to cut down the monthly commitment. If I knew the trip would cost $1,000, I would start saving months ahead of time instead of booking a trip for the next month. While I did have to postpone my travel a bit, lowering my monthly savings made my goal seem more realistic. This made me more likely to stick with the goal and allowed me to pay more than the minimum on my loans. Plus, it gave me more time to look forward to my trip!
The key to not feeling suffocated by debt is realizing that you are in control of how your debt makes you feel. Once I came to terms with the fact that I can choose not to let my debt define who I am and how I live my life, I felt free to live my life on my terms. Having debt did not make me less of an employee or a friend or a partner; it made me a real person—someone who incurred debt to better themselves and gain an education. Instead of succumbing to the overwhelm that debt can bring, I accepted it, embraced it, and made my debt work for me.
Other tips that worked for me
In the grand scheme of things, these steps have helped me to stay on track and reduce my debt while still enjoying my life.
But if you’re looking for more concrete examples, here are few other things that have worked for me:
- I started a side hustle. It began as a fun hobby, and then I found a way to monetize it.
- I withdrew money from my IRA. This is one of the more extreme things I’ve done. I gave this a lot of consideration and consulted with a financial advisor before making the decision. It made sense for my growing family and me — and you can withdraw contributions to a Roth IRA without paying a penalty— but withdrawing retirement money shouldn’t be taken lightly. This is definitely something you should talk about with a professional.
- I treated extra money like I never got it. Any extra money I received from bonuses, gifts, pay raises, etc., I threw right on my loans.
- I used cash. Paying cash helped me avoid credit card debt and stick to my budget.
- I utilized balance transfer offers. Since I was simultaneously paying off credit card debt, transferring balances that allowed for zero to no interest helped me contribute more money to paying off debt. Again, this isn’t a move to make lightly, so do your research thoroughly if a balance transfer is something you’re considering.
- I cut cable. Who needs cable TV when you can watch Netflix and YouTube TV?
- I worked out at home. I took advantage of online workouts and running outside.
- I debt snowballed. This method worked for me because I like the gratification of paying smaller debt off in full.
- I refinanced my private student loans. While it increased my monthly payment, I significantly reduced my interest rate.
- I paid more than the minimum. More debt payments equal getting out of debt sooner.
Everyone’s debt journey looks different. The important thing is to do what works for you! And remember, what works for you will look different through the years, so be kind to yourself. Paying off debt is paying off debt, no matter how you get there or how long it takes.
Danielle Doolen is a freelance writer and a communications professional at a Fortune 500 automotive retailer. Her writing has been published in Career Contessa, PopSugar, Elite Daily, Work For Your Beer, Elana Lyn, Charlotte Agenda, and more. Learn more about her at www.danielledoolen.com and follow her on Instagram and Twitter at @danielledoolen.
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