My fancy, embossed college diploma sits on my office desk. It’s pretty — it ought to be. It was certainly expensive. Like so many of my millennial compadres, I fell victim to the idea that an expensive secondary education was vital to my overall success in life.
Prior to my leaving the nest, my dad laid out the terms of his contribution to my college education. Graciously, he would allocate $10,000 per year toward academic costs. I could go wherever I wanted, but if I chose an option where all costs were covered, he would buy me a car as a graduation gift. In hindsight, I realize how generous his support was. I understand the value of money better, now that I live the life of a corporate worker bee.
Nevertheless, in my ambitious naiveté, I chose the most expensive school that accepted me, sunk daddy’s investment, and signed the digital dotted line for a $30,000 loan. (I still drive the same car from high school.)
It’s good debt. I’ll make great money once I graduate. It’s not that much in the scheme of life.
While my musings were true to an extent, I graduated Rollins College in Florida in May 2013, and hit the job market with an overwhelming feeling that I had made a poor investment. I spent $70,000 on a private, undergraduate business degree that I can’t read because it’s printed in Latin. My senior year, I imagined I’d work for a top consulting firm, analyze numbers, make important recommendations to clients, take home a fat salary and live my idea of a glamorous lifestyle. To my dismay, in my final semester, I discovered spreadsheets make me cry, and my interview skills were subpar. Needless to say, my dream job never came to fruition.
“I spent $70,000 on a private, undergraduate business degree that I can't read because it’s printed in Latin.”
Three years post-graduation, I found myself working as a recruiter for a small, national firm. I spent my days aggressively cold-calling potential candidates and pitching job opportunities. I was paying my $301 minimum monthly payment and was discouraged when I realized I was barely making a dent in the overall balance due to high interest rates. The balance made me sick. I hated my job. I felt chained to my desk — decaying under fluorescent lights.
I had a pipe dream of quitting and traveling the world for a year. I wanted to start a podcast and record the stories of people I met anonymously. Unfortunately, I had minimal savings and an educational debt shackle keeping me at my recruiting desk. Around this time, I received news that I was not selected for a job opportunity that would allow me to travel while working remotely. I thought the job was the answer to my prayers, so the rejection was heartbreaking.
I was miserable for months. I was insufferable at home, which consequently led to a temporary split from my long-term boyfriend. After several months of wallowing in my perceived misfortune, I decided I had to make a change. I was disgusted by my own behavior. Who likes a mopey whiner? I felt financially trapped. I had borrowed to get to this place, and it appeared I had made a mistake. I obsessed. I worried. Then, I took action. I devised a financial plan to eliminate my college loan and save enough cash to allow me to quit my job and travel for an extended period.
My recruiting job paid me a $40,000 salary and commission based on performance and sales. The base was enough to get by, but the variable income portion was the attractive aspect of the compensation plan. I figured if I could seriously cut my expenses, make a killing in commission, and supplement my income with side jobs, I could potentially eliminate the loan balance and alleviate the financial stress.
“I felt financially trapped. I had borrowed to get to this place, and it appeared I had made a mistake.”
November 2016, I started by making a $500 payment. My bank account felt it. The majority of my after-tax income was allocated to living expenses. Still, there was a sense of satisfaction associated with paying more than the minimum. It was a small step, but it was what I needed. I started reading financial blogs and books, and began discussing my plan with a few close friends. I set a goal to pay off my $22,000 loan balance in six months, beginning in January 2017. Lofty? Yes. I’m not the most disciplined when it comes to managing money. I’m your typical millennial consumer. Dining out, manicures, and long weekends away ate up the majority of my disposable income. Nevertheless, I had to change my situation, so I had to change my habits.
The terrifying aspect of my plan revolved around the fact that only $40,000 of my compensation plan was guaranteed. I needed to perform like a rockstar professionally to ensure I stayed on track. I estimated I needed to gross approximately $100,000 in 2017 to pay off the loan, save a hefty security fund and account for taxes.
One of my mentors regularly acknowledged the power of writing down goals and the benefit of positive affirmation. I figured this was the perfect time to test her theory. I started a journal, penned my six-month goal and gave myself specific dates to accomplish financial payoffs.
June 30 was highlighted on my calendar as D-Day (Debtless Day)! I read my goals daily, and I focused on the small accomplishments. Essentially, I gave myself a consistent reminder that the insurmountable is comprised of bite-sized victories! (i.e. NO, I do not need that Starbucks latte!)
At the onset of my six-month endeavor, I still owed approximately $22,000, which meant I needed to contribute $3,666 or more each month to my debt. (It was actually more than that, as I did not account for interest). After taxes, that was more than my base income, and of course, I still had bills to pay. Out of either sheer luck, skill or power of will, I began to see significant success at work. I was closing deals regularly, and my paychecks began to reflect the effort. Still, I needed more to meet my living expenses and self-imposed, monthly debt payment.
I picked up several side hustles to pad my pay. I spent 50 hours each week recruiting by day, and moonlighted as a liquor promoter by night. I was exhausted, caffeinated, and determined. I went on a strict budget, lived with multiple roommates to mitigate my rent expense, and lowered my 401k contribution from 12 percent to 1 percent. I vowed: No binging! No superfluous buying! Err, mostly (again with the lattes. OK, and maybe manicures). I may have slipped here and there, but for the most part, I stayed the course: $3,666 each month.
“I’m your typical millennial consumer. Dining out, manicures and long weekends away ate up the majority of my disposable income. Nevertheless, I had to change my situation, so I had to change my habits.”
Like John Lennon, I got by with a little help from my friends ― specifically, my parents. I needed an accountability partner (or two) to keep me honest and focused. They were my cheerleaders, and encouraged me to stay the course. Many of my friends and colleagues were deferring their loans. They did not buy into my debtless delirium. But mom and pop were always there to offer praise and wisdom. But that was all they offered. My dad was adamant that he had contributed his fair financial share to my education, and the debt responsibility was mine and mine alone.
Entering the fourth month of my debt demolition, my balance was a proud $11,600. Progress was delicious! Still, that was only half of my goal. With two months left on my (self-imposed) payoff timeline, I had to kick things into high gear.
Initially, I didn’t realize I could choose which loan balances to pay. I just submitted the $301 monthly payment to the balance and called it a day. I finally realized I had eight mini-loans ― all with different interest rates ranging from 3.4 percent to 6.5 percent. Logically, I should’ve been paying off the highest interest rates first. Eek ― rookie mistake! I also started making weekly, sometimes biweekly, payments. If I had an extra $5 in my budget, I literally made a $5 payment. It kept me honest, and mathematically it reduced the interest, which accrued daily. Toward the end of my debt payoff timeline, I had several small loans, all at 3.4 percent, so I paid the smallest balance first. Knocking off one mini-balance at a time was quite satisfying!
June came, and I continued to sink every extra dollar into my debt. I depleted my savings to an uncomfortably low balance. BUT. I. DID. IT! I made the last payment on June 26, 2017: four years, one month after graduation; and six months after I aggressively decided to commit to debt payoff.
“In an era where 'treat yo'self' is a cultural norm, I think a little self deprivation does the soul good.”
So how did it feel? Honestly, a bit anticlimactic. Crowds cheer, family sends greeting cards, and there are parties to celebrate when you graduate. Debt payoff is an achievement celebrated in solitude. Yet, the sense of personal pride was much greater paying off my student loan than actually earning my diploma.
I often reflect on my why. Why did I feel the need to adhere to such extreme measures? It certainly wasn’t fun. On the contrary, at times it was miserable. But in an era, where treat yo’self is a cultural norm, I think a little self-deprivation does the soul good. I live in a world where I’m always teetering toward indulgence, and my all-or-nothing personality needs to be yanked back in the other direction from time to time.
To date, this is my proudest accomplishment. I taught myself a valuable lesson. Discipline is much more valuable than motivation. I was motivated to pay off my debt, but disciplined behavior was the driver that enabled me to do so in a six-month period. Today, I do not feel shackled by the constraints of a student loan. I used a methodology that can be applied to many life accomplishments: set a goal, create a plan, execute. I’m not special, but I do have an extra $301 each month to spend as recklessly as I want.
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