By Melanie Lockert, Content Writer at Credit Karma
Two degrees, nine years and over $81,000 later, I did something I had been dreaming about for
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When I graduated with my bachelor’s degree and $23,000 worth of student loan debt, I didn’t think much of it. After all, I had been told that college was worth the cost. I treated my debt like
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It wasn’t until I took on an additional $58,000 in student loans to go to my dream school that I woke up and realized that I didn’t want to be in debt forever.
After obtaining my master’s degree in Performance Studies from New York University, I made a
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Getting out of over $81,000 in student loan debt, not including interest, was one of the hardest
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In order to get out of debt, I employed various strategies to help me reach my goal. Here’s what I did to reach my goal of debt freedom.
1. I employed the debt avalanche method.
There are two common methods people employ to pay off debt: the debt snowball method and the debt avalanche method.
Using the debt snowball method, borrowers pay off accounts with the smallest balances first, while paying the minimum on the rest of their loans. People like this method because it provides the feeling of quick wins and long-lasting motivation to keep paying off more debt.
The debt avalanche method, on the other hand, involves paying off accounts with the highest-interest debts first, while paying the minimum on the rest of their accounts. Borrowers can
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I went with the debt avalanche method ― paying the minimums on my low-balance, low-interest undergraduate loans while aggressively exceeding the minimum payments on my high-balance, high-interest graduate loans ― first paying off the 7.9 percent loans, then the 6.8 percent loans.
2. I calculated my daily interest to stay motivated.
When I graduated with my M.A. in 2011, I still had $68,000 of debt, and a lot of my payments were going to interest. One day, I decided to figure out how much interest I was paying per day.
To calculate my daily interest, I used the following formula:
Interest rate x current principal balance ÷ number of days in the year = daily interest
When I calculated my daily interest, I realized that I was paying roughly $10 per day, or $300 in interest each month.
After feeling discouraged about the state of my debt, I got angry that I was spending so much
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3. I mastered the art of the side hustle.
In my first few years of debt repayment, I cut my budget to the bone and lived on very little. There wasn’t any room to cut back further, and the progress on my debt plateaued. I knew that I had to earn more to really make the progress I wanted to on my debt, so I started side hustling every chance I got, taking gigs on nights, weekends and early mornings.
4. I made multiple payments throughout the month.
One of the best ways I combatted my debt was by making multiple payments throughout the month. Instead of making one monthly payment, I began making biweekly payments. Any time I had cash to spare, I made another payment.
5. I made student loan repayment my number one priority.
For better or worse, I prioritized my student loan payments over everything else. Over the past five years, I’ve focused on paying off my student loans by earning more, streamlining my expenses and increasing my payments.
Going all in helped me reach debt freedom several years earlier than if I had just paid the minimum payments and saved me money on interest payments.