How I Paid Off $116k in Student Loans in Less than 4 Years

The statistics are scary. In 2019, almost 45 million Americans are holding $1.5 trillion in student loan debt. As a millennial or Gen Z, someone you know has weight of financial decisions they made fresh out of high school.

I gladly took on tens of thousands of dollars in loans going into college. It was the only way I was going to get myself to my dream college, a fancy private school in southern California. Even though I read every legal document I signed, I had no idea what was waiting for me on the other side of graduation.

To add to my blind ignorance, I decided to get my Master’s degree from, you guessed it, another private school. When it was all said and done I was 6-figures in debt. Deep in the hole as a 20-something girl living her life, too busy to deal with the consequences of my decisions.

At the time, my strategy was to pay the minimums and ignore the balances. I thought I was doing good for myself by paying my bills every month. I thought that to avoid dwelling on the deep hole I sat in was the easiest way to handle it. This game went on for almost 3 years.

One day, I finally got the courage to peek into my accounts. Despite paying my minimums on time like clockwork, my balances actually went UP. It felt like a shot through the heart, my throat sank into the pit of my stomach.

That day was one of the most important pivots of my life. The day I finally decided to take ownership of my finances, and my life. At age 27, I decided that I couldn’t hide from my responsibilities anymore.

At first, I loosely followed the advice of some well-known debt gurus. You know, the get-a-side-hustle-and-start-couponing types. But, their strict rules made me feel like a child on top of being a servant to the loan servicers themselves. I knew I had to find an effective, yet compassionate, system for myself.

I’ve now been debt-free for over two years. My system works. And I’d like nothing more than to use it to help others free themselves from the chains of student loan debt.

Here are the 6 steps I took to pay off 6-figures of student loan debt:

1- Get to Know your Personal Balance Sheet

My system is based on mindset and holistic practices. But when you are talking about debt payoff, you can’t ignore the numbers. Here are the key numbers to calculate once you decide to take ownership of your finances:

• Total monthly income - Is it fixed or variable? If yours is variable your approach is slightly different, but the same system overall.

• Minimum monthly student loan payments - Add up your payments across all loans & providers

• Monthly expenses - Group them into categories such as rent, groceries, utilities, transportation, entertainment, travel, etc.

• “Bare bones” Monthly expenses - If you remove all but the absolute essentials, what's left? Usually includes only rent, utilities, groceries, transportation

Fun fact: When I started, my “bare bones” expenses plus minimum loan payments were MORE than my total income. That meant that every month I was putting myself more and more into debt. (Did I mention that I was really good at ignoring responsibility?) I knew I had to make big changes fast.

I knew I had to start increasing the income side of the equation. I immediately started looking for “side hustles” that fit around my full time job. For me, that was swim coaching because the schedule fit, it paid well, and was fun and low stress for me. Now it was onto the other half of the equation… expenses.

2. Eliminate Anything That Doesn’t Bring You a Hell of a Lot of Joy

I challenge every person reading this to go through their expenses for the past month. Playing off the KonMari tidying method, for each expense ask yourself, "did this bring me joy?" If it didn’t, resolve to save yourself from that money leak going forward.

Another way to think about it is, did your Ego make buy this, or did your Highest Self? I belonged to a trendy gym because it was cool but I rarely used it. I was holding on to that membership purely out of Ego.

Because I was in a pretty bleak circumstance, I cut out everything that wasn’t a “bare bones” expense as fast as I could. No dinners or happy hours, no pilates, no salon appointments. My ego cried for days, weeks, months. But eventually, it was freeing to take ownership of my wallet.

3. Practice Gratitude Daily for Everything That Brings You Joy

Now with only the essentials, give yourself a nice loving hug. You have already come so far. Take a few moments every day to feel how grateful you are for your new and improved self. I recommend starting a daily gratitude journal practice if you haven’t already.

Be grateful for everything you do have, how you are now operating from a place of self-love and self-worth. Appreciate all that you have done for your current and future self.

Now is where the fun comes in. Your income and expenses are in a pretty stable place.

4. Use Perceived Value to Lower Expenses from an Abundant Place

Perceived value is the ratio of joy/luxury you receive from something divided by the actual cost of it. Yes, it is very subjective calculation based on the person spending the money, and that’s ok. That characteristic is downright powerful.

Start by looking at expenses that have already passed the Joy test in Step 2. In the situation of debt pay down, you want to lower current expenses and still feel abundant/luxe. Identify existing expenses to swap that cost less but bring you as much Joy as the original purchase.

A simple example is frozen yogurt. I used to love to go out to frozen yogurt, costing me about $10/week. Now I acknowledge that It was not a huge expense by any means. But I was wandering through Trader Joe’s one day and saw that they had a coconut milk chocolate ice cream. It’s decadent and each bite feels super luxe to me. One pint was less than $4 and would last a week. Swap made. Easy peasy.

Now frozen yogurt doesn’t seem like a lot, but many of these swaps over time do add up. More importantly, your entire perspective shifts when you examine everything by perceived value.

5. Lean Toward Sustainability & Treat Yourself

In the end, it is all about persistence and dedication. The key to finally smashing your 6-figures of debt is for all your changes to be sustainable. Diets consisting of kale and broccoli don't work for long. Same applies to your finances.

The process is all about testing, tweaking, and iteration. When you have a month with a big unexpected expense, don’t beat yourself up. Learn your lessons from the situation and move on, trying to do better next month. My journey was not a linear road and neither will yours be.

The more money each month you put toward your loans, the quicker the balances disappear. Give yourself a reward as you pass certain milestones. I used to treat myself to a date night at my favorite restaurant for every $20k that I paid off. Unapologetic, full high-vibe luxury.

Once you get rolling, your target end date will start to accelerate towards you. When I was in my last $15-20k, large, unexpected sums of money fell into my lap. Manifested gifts from the Universe for my perseverance to self-improvement. When you finally pay everything off, treat yourself to a nice vacation. You’ve earned it!

6. Be Prepared for Your Entire Life to Shift

There is a lot that I expected on my journey - growth, tough decisions, ending in a better place than I started. But there was a lot that came up that I didn’t expect.

Honestly, my entire life, not only my finances, shifted.

To be transparent, I lost a handful of friendships that held together for the wrong reasons. The friends who I’d easily spend $100 at happy hour, bitching about work, dating, life. Once I cut those happy hours out of my life, those friends disappeared too. I chose to miss some weddings and some family events purely to save money. And at first, it all hurt. A lot.

Ultimately I realized that the relationships meant to stay in my life would support me. We opted for wine-in nights and home-cooked meals instead. At some point, I proactively cut those negative cords out of my life anyways, but that’s a different blog post. But suffice to say, and cheesy AF as it is, even though I was living with less my life became more abundant than ever.