Good budgeting takes practice. Blogger Kate Bowler of Domestikatedlife shows how including her student loan payoff goal in her spending plan helped her put them in the rearview mirror.
I used to shudder when I opened the mailbox each month and saw the name of my student loan company in the stack of mail. My monthly check to pay off student loan debt felt painful to write out before I placed in back in the envelope to mail. A monthly ritual that, for a long time, I assumed would go on forever.
I’m happy to report, about a decade after graduating from Northeastern University, the student loans are now in my rearview mirror. How did I get there? I wish I had a secret formula for you, but the answer is one of chipping away at the bills, focusing on savings, and a few late nights of hard work.
I have to confess upfront that I’ve never been very good at saving money. I love the immediate satisfaction of shopping, enjoy spending money on travel, and grew up with a “you can’t take it with you” mindset. The first time that I was really able to focus on a savings goal was when my then fiancé and I were planning for our wedding. We paid for most of the wedding ourselves, and I had a very clear vision of what I wanted. I knew I had to save a certain amount of money to make the whole thing happen, and my sheer focus and determination working towards that dream wedding had me saving every extra penny to meet that goal with my husband.
Once our wedding was over we realized that we’d gotten into a good rhythm of saving money each month, and could now shift our priorities to a new goal. We both agreed we wanted to save for a house, and at the same time, knock down my student loan debt that was always looming over my head (and in the mailbox!).
Saving for a house and paying off my loans always felt like two goals that existed in conflict of one another. How do I save, save, save, while also paying off big chunks of my college debt? The solution for us was to continue to earmark that savings amount we had started putting away each month for our wedding, and refocus it on the house fund. To start chipping away at the student loan payments, I had to redirect a lot of my “fun money” –as I called it–to the un-fun act of ridding us of that debt.
My fun money came from a few different places. I received a few seasonal bonuses at my day job working in insurance marketing. Those larger sums of income that weren’t part of my monthly paycheck got directed straight to the loans, with a focus on paying off the ones with higher interest rates first. Putting those larger payments towards my debt gave me a feeling of progress and accomplishing something with the money. It would have felt awesome to use that money on a vacation or a shopping spree, but I tried to focus on positive feeling that the progress left instead.
The other way I worked at paying off the loans was by saving every dollar I made from the freelance projects I did as a lifestyle blogger and put those after-hours earnings towards the loan payments. This was where the hard work and late nights come in. I would come home from my day job and work most weeknights, and usually at least one day every weekend, to finish freelance writing and digital content projects. Those little projects over time added up to enough money to pay down my loans to zero! When I had first started doing this freelance work, I used the extra income as my fun money; making the mental shift from “fun” money to “goal” money was key for me. I was working hard to get to that goal, and paying them off alleviated a lot of stress and helped us to get to our bigger goals-like buying a house.
It was hard to make the mental shift away from using extra money I was earning for things like clothes and vacations and dinners out, and it was also hard spending a lot of my free time working after my 9-5 job. I had to be very diligent about time management to make it all work, and really keep those two goals in my line of sight when I started to get frustrated or want to stray. There were definitely times I was tempted to take a paycheck from freelance projects and spend it on a purse or big home décor purchase (and there were times I totally did, I’m not perfect!).
A large part of the process that worked for me was about consistency: I had a reminder in my calendar twice every month to pay bills, put money towards my loans, and file money away into my savings. Making it part of the routine helped us march forward towards paying off the loans while also saving for a house. All in, it took me almost three years to get to the goal of paying off the loans, and around the same exact time for us to find a house we were ready to purchase.
Now that we’ve reached those two big goals, I still use that same mentality for new goals that we’ve decided to focus on. When I found out we were expecting our first child, for example, I doubled down on saving as a buffer for myself when I was unsure how my company would handle maternity leave. It enabled me to have enough of a cushion, after we had our daughter Jane this winter, to be able to leave my day job to pursue blogging full-time (the freelance side-hustle that helped me pay down my loans!).
The whole process took me 10 years, with the last three really focused on getting rid of that college debt. Sticking to our plan, and working extra hard during that time absolutely paid off, and it set me up with better savings habits for the long haul.
While Society of Grownups hopes the information is useful, it’s only intended to provide general education. It’s not legal, tax, or investment advice, and may not apply or be useful to your specific financial situation. If you need recommendations geared to your personal financial situation, schedule time with a financial planner.