I just paid off the last of my student loan debt and my ebullience knows no bounds. Part of me is concerned that there’s another forgotten loan out there, lurking in the dark, but after so long, I’m sure the lender would have tracked me down by now.
I graduated from the University of Maryland in May of 2011 with a BA in Criminology and Criminal Justice. The parchment, which is still rolled-up in the cardboard mailing tube buried in the basement somewhere, cost me approximately $70,000. I had to take out loans for everything. I also worked while in school, but that money paid for car insurance, fuel, and other living expenses. I kept costs low by not buying textbooks after freshman year.
The plan was to teach English in Guangzhou, China, but that wouldn’t pay enough to cover my debts. So, my first job after school was as an assistant manager at Abercrombie & Fitch. Folding jeans in the mall wasn’t what I had anticipated, but a job is a job. Afterwards, I secured an office position with my current employer, no major complaints thus far; I’m just glad I don’t have to wear skinny jeans and flip flops to work anymore.
The overarching goal was to get out of debt as soon as possible, which necessitated certain sacrifices. I had to move back into my parent’s house to cut down on housing costs. (I pay rent there, don’t worry, it’s not just a handout.) I have never owned a car with fewer than 100,000 miles on it, they have all been rusty too. I have never owned a smart-phone, my basic one costs $20/mo. I have not gone on vacation in six or seven years. I cut my expenses to the marrow, put approximately 60% of my net income against the loan debt, and paid it off within 4.5 years.
But enough about the costs, let’s not forget the benefits. By surviving this gauntlet of compound interest and debtor’s prison, I developed a few relevant life skills. First, I learned to budget my money. I have set budgets before, but none as detailed and crucial as what I live with now. Second, my credit score rose as I paid my debts, it’s around 725 and should be higher, but not bad since I’ve never had a credit card. Third, I learned how to plan well. With no excess funds, all I could do was plan for future events. I made lots of spreadsheets to compare volunteer opportunities, project car builds, and investments. Fourth, with no social life to speak of, I read a lot and took online courses on everything from IT and supply chain management to philanthropic giving and marketing. Finally, I daresay I have a much stronger hold over my personal finances than the average 26 year old.
Now, nothing really changes. The money that was going to the loan payments has been redirected to save for a downpayment on a house. But in another six months, who knows, everything might change.