I made my final student loan payment today!!! I owed almost $70,000 USD for my undergrad and master’s degrees and today I sent off my last student loan payment. I’m going to share my top five tips so you can pay off your student loan debt too!
I’ve been seriously working toward this goal over the past four and a half years (since I’ve been working in Venezuela). While I worked in Mexico I barely made enough money to live on month to month so I got on the Income Based Repayment plan where I was required to pay $0 per month. When I was working in China I made minimum payments only because I was paid in RMB and it just seemed easier to do. So it wasn’t until I came to Venezuela and had enough disposable income AND a paycheck directly deposited every month that I was able to really get the debt avalanche going.
Many of my international teaching friends are only paying minimum amounts each month on their loans so that they have more disposable income now and plan on just getting the final amount forgiven after 20 years or something. If you plan on only teaching overseas, don’t intend on buying a house or getting a car loan in the US then this is a great plan. For me, my next big goal is to buy investment property in the US and that requires more disposable income and a high credit rating. I needed to pay off my loans ASAP.
It isn’t always easy to live frugally and pay what seems to be an insurmountable debt down every month, but there are things you can do to make it easier.
- Cut down on housing costs: you can move in with your parents, get a roommate (or three), minimize your utilities usage.
- Cut out unnecessary bills: such as Amazon Prime, expensive cell phone plans, Netflix, and cable TV.
- Use second-hand products: get used cars, used clothing, library books, borrow things that you use rarely like camping gear.
- Keep your vacations in check: I try to only visit places where I can sleep for less than $30 a night and probably average closer to $20. Look for developing countries in SE Asia and Latin America.
- Move somewhere with a low cost of living: I know that not everyone is willing to live in Venezuela, but you can move somewhere much cheaper than a big city in the US (even just moving out to the suburbs can save you money). I generally spend a maximum of $300 a month here (and that’s if I travel within the country).
Bonus tip: Track your loan repayment to help motivate yourself. I used this debt reduction calculator to track my payments and see what happens when I make extra payments.