As a college graduate walking the stage in 2023, I crossed the invisible threshold into what everyone calls “the real world.”
I said goodbye to the friends I had spent every moment of the last four years with and welcomed my new best friend, student loan debt.
Living in the beautiful coastal town of Newport, Rhode Island, during college was the best experience of my life thus far, yet the worst thing for my bank account. I didn’t bat an eye, dropping $20 every weekend to see a cover band, $15 to Uber downtown, and $16 for a salted caramel espresso martini.
With a one-year grace period after graduating, I thought I had time to build my bank account backup to start paying off the weight of debt on my shoulders. Yet, little did I know that the interest still grew while I was adjusting to adulting.
I knew I had to make drastic decisions — and fast.
Minimum payments didn’t cut it
Fortunately, my parents were willing to let me live at home after graduating to get my feet on the ground. Moving back home under the same roof as my parents after years of freedom was far from my definition of fun, but it was ultimately the right move financially.
For the first few months, I made minimum payments toward my $53,000 loan debt and smiled as the number in my bank account grew with my new full-time post-graduate salary. What I didn’t realize was that, due to the interest rate, my student loan payments were making zero progress on my loans.
One day, I logged into my account and saw that I owed $3,000 more than my original balance. It sent me into a complete spiral. I cried thinking I’d be in debt forever and would never be able to go on vacations or buy a new car.
As an English major, I was unfamiliar with economics and how interest rates worked.
With help from my boyfriend, I realized that minimum payments were not the answer to escaping rising interest rates and quickly becoming debt-free. I decided to devote about 80% of my monthly income, totaling $2,800, toward student loans, sometimes leaving me with only $200 to spend in a week.
Working with little money
With only $200 a week, I had to stop and think about the purchases I was making. Was an $8 grande iced vanilla latte with sweet cream foam from Starbucks really worth it, or could I just make a coffee at home? Was take-out necessary, or will a bowl of cereal suffice for dinner?
Thankfully, living at home, I didn’t have to pay rent or utilities, so I could focus my spending on essential purchases, including gas, while still having enough for the nonessentials like a manicure. Sometimes I thought I’d have plenty of money until my next paycheck, but then a gym membership or Netflix payment would go through.
There were many days when I stressed about whether I could do normal things a postgraduate would, like spending money on takeout or buying a concert ticket. At times, I regretted my decision and wanted to lower my payments, but I never did.
Trusting my gut, I stuck through the payments and carefully considered all my purchases.
Debt-free in September
If my calculations prove to be correct, I will officially be debt-free in September.
There will be no more worrying about spending money on cocktails and coffee. I won’t have to worry about my $1,400 bi-weekly payment clearing my account.
If I had to make this decision again, I wouldn’t change a thing. Despite logging into my loan and bank accounts almost daily for two years, I managed to make it work and always had some money in my account, even if the amount was small.
What I originally thought would take 30 years to pay off is only taking two, which I am extremely proud of. Pushing through the stress and many tears was worth it, as I will now cross the threshold into financial freedom.
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