I hate to admit it, but I’m no expert on student loans. With the help of scholarships, and living at home, I graduated debt free from college. But, the average student loan debt for an American is $37,500 so I wanted to bring in an expert to share her experience with student loans.
Taylor of ImperfectFinance graduated college in 2015 and paid off $60,000 of student loan in less than five years!
In this interview you’ll learn:
- The side hustles Taylor had
- The resource that helped her the most
- Taylor’s biggest regret on her student loan journey
- Her thoughts on refinancing student loans
It is incredible that you managed to pay off $60,000 in student loans in less than five years! Can you share your story?
Hello! My name is Taylor and I live in Raleigh, North Carolina. I graduated college in 2015 with $60,000 of student loan debt. For the first few years out of college, I really didn’t take my student loan payments too seriously – I was just focused on paying the minimum payment each month. Thankfully, one day a few years later, everything changed and I became laser focused on becoming debt free. I paid off my debt in about 4.5 years.
What made you decide to pay off your student loans so quickly? Was there a defining moment that you remember making this a goal?
After about two years of paying the minimum payments, I was doing my taxes for 2016 when I realized that I had paid $5,000 in interest that year. That meant that none of that money went toward actually paying down my debt/principal amount!
Immediately, I became fired up and I vowed to start taking on my debt head on for once and for all. I began diving into personal finance blogs, books and podcasts and truly became obsessed with regaining control of my financial situation.
Related: What To Do With Your Next Paycheck
What was the number 1 thing you wish you knew when you started your debt payoff journey?
When I graduated college, I had a grace period for about 6 months before my student loan payments started kicking in. I spent that time enjoying my first few paychecks. Instead, I wish I had saved up money so that when the payments finally began 6 months later, I would’ve been able to put a lump sum payment toward my balance. That would’ve given me a great head start! You live and learn!
If you have a grace period, I would definitely recommend taking advantage of not having student loan payments and saving up money during that time, instead of spending all of your money like I did 🙂
What propelled your debt-payoff journey?
There were a few things that propelled my debt free journey. The first was that I got a roommate. When I graduated college, I swore I would never have a roommate again, but when I started getting really serious about paying off my debt and did the math to realize how much money a roommate would save me, I made the sacrifice to get a roommate and ended up saving about $600 a month.
The second major thing I did to pay off my student loans more quickly was to get a part-time job at an ice cream shop. I made about $9 an hour plus tips and worked after my 9 to 5 and on the weekends to make extra money, and every penny I made went straight toward my student loans.
The third major thing I did was do a “no spend” year. I didn’t buy any clothing or shoes for a year in order to save money, which really helped me put more money toward my debt.
Read: How To Stop Online Shopping
Why did you choose the particular side hustles you did?
I really tried to leverage my skill sets for my side hustles. Extra work on top of your regular gig (e.g. my 9 to 5) can be tough, so I knew I wanted to do things that I would actually enjoy. So, I did things like using cash back apps (affiliate link) which are pretty simple, as well as freelance work – I wrote blog posts for a small recruiting company and did admin work for another small marketing company.
I chose to work at the ice cream shop because I could work by myself (which I really loved) and I liked that it was family-owned and had a pretty laid back atmosphere that wouldn’t cause me too much extra stress.
Read: 47 Side Hustles That Can Earn You An Extra $1,000 This Month
What was your most helpful resource when paying off your debt?
My most helpful resource when paying off my debt was a spreadsheet that I had made that calculated my payments and my interest. I designed it so that I could predict when I would be debt free. Having a “debt free date” or a date that I hoped to be debt free in the future really helped me stay hopeful and motivated.
Do you recommend refinancing your student loans?
I refinanced one of my student loans in order to lower my monthly payment, interest rate and to alleviate my parents from being a cosigner on my loan. This worked out really well for me, but I would advise people to really think long and hard before they refinance, especially if they are looking to refinance a federal loan. The reason being is, once you refinance a federal loan to a private loan, you lose any governmental protections. For example, during Covid-19, student loan payments were paused for anyone with a federal loan, but that was not the case for people with private loans.
Did your friends and family support you in your debt-payoff journey?
My friends and family were very supportive, but meeting and talking to people in the debt free community on Instagram was truly a game changer. I felt so much less alone, and learned so much from people who were paying off their debt just like me. Without the debt free community and my community on Instagram, I don’t think I would’ve paid off my debt nearly as fast. All of the people I’ve met and talked to on Instagram have truly been so supportive and inspiring – it means the world!
What is your next financial goal?
My next goal is to reach a net worth of $100,000 in 2021. They say that saving your first $100k is the hardest, but I’m excited to invest as much as I can and hopefully hit this milestone one day soon!
Read: How I Saved $100k At 26 Years Old
Where can my readers follow you?
You can find me at @ImperfectFinance on Instagram or on my blog. Feel free to also check out my Student Loan Guide on Etsy!
Related Content: