Today we have a guest post from a reader named Crystal, who successfully became debt free last year. Enjoy!
In 2007, I went back to school to obtain an M.A. in Education/Curriculum and Instruction with a Specialization in English and Language Arts so I could teach English classes at a community college part-time.
Since I was working full-time, I decided to do an online program. At the time I enrolled, I thought nothing of the true cost of getting my master’s degree since I had never take out any loans to go to school. Over the course of the two year program, I took out a total of $41,000.00 not including interest that accrued while I completed the program. I was lucky that I only took out federal graduate loans but the interest at the time was 6.8%.
I failed to see the reality of the noose I placed around my neck until I completed my degree and had to start paying back the loans plus interest.
Shortly after I finished my degree in 2009, I was laid off from my job. As a result of this, I had no choice but to put my loans in deferment.
After I got a full-time job again, I took my loans out of deferment. My balance had grown to over $45,000.00. In order to lower my monthly payment, I switched to an extended payment plan and continued to pay the minimum monthly payment for over two years with no progress made in paying down my balance.
In December 2013, I was sick of being suffocated by all the debt I had and decided that I would pay off all my loans and become debt free by the end of 2014. I felt that I needed a “quick win” to get things going so I took $23,000.00 from my Roth IRA and paid off the two oldest loans in full and applied the remaining $3,000.00 towards the smallest of the two loans I had left.
Even though I paid off about half of my debt by the end of 2013, I still had $22,000.00 remaining. In order to meet my goal, I ruthlessly cut my expenses. No gym, no Netflix, no vacations, no eating out, etc. I created a strict budget for myself and stuck to it. It sucked most of the time as I had to say no to a lot of things but it was more important to me to become debt free. I put more than half of my paycheck towards my loans every time I got paid.
In March 2014, I paid off the smaller of the two loans I had left. Even though that was a small victory, I knew I had several thousands more dollars to pay. I continued to live “lean” and put more than half of each paycheck towards my loans and watched as my balance rapidly went down.
I made the final payment to Sallie Mae on July 16, 2014. In total, I paid $54,147.69 and $13,147.69 in interest alone. I can’t say enough how elated I was to make that final payment. I never had to pay Sallie Mae again, I was 100% debt free, and I obliterated my goal by over 5 months.
It’s over a year and a half later and I’m still 100% debt free. Having several thousand dollars of debt is soul crushing and I never want to experience that feeling again. I had to make sacrifices to get completely out of debt but it was so worth it.
Crystal is a 30-something single gal living and loving life in coastal Southern California. When not working as a paralegal, Crystal loves reading (especially personal finance blogs), working out, spending time with her boyfriend, and watching way too much TV.