How I Plan to Pay off My Student Loans by the End of 2020
Some professionals argue that you shouldn’t rush to pay off student loans, Kelvin thinks differently
I never envisioned the year 2020 beginning like this, but I knew this year was going to be hard. So far we’ve witnessed the untimely passing of Kobe, Gianna and the seven beautiful souls lost on that helicopter ride the morning of January 26th in California. The Coronavirus pandemic has swept trough the globe, and our world is at a standstill. This is culminating to the point where at the tail end of my 120hr pay period working as a receptionist at the clinic, I learned that my hours were being cut.
It’s a scary time to be alive, and enough has happened that some are considering this year a complete failure (and its only March). Nonetheless, I am no stranger to adversity and a far greater victory lies ahead for me. Despite my income being inconsistent, and so many things being uncertain at this time, I can confidently tell you that by the end of 2020, I will be out of student loan debt.
Being a first-generation college graduate was the first step in building upon the legacy my parents began. Now my focus is on financial fitness. My father worked at a car wash, and my mother works as a caregiver, so, I am no stranger to residual affects of debt. Coming from a family that depends on each paycheck to get by, I’ve grown up watching my parents battle with being stressed, overworked, and exhausted. This step towards financial independence is what will allow me to transcend my upbringing and societal expectations.
Budgeting Breakdown
Graduating in June of 2019, I left college with $26,000 of debt. With my jobs as a receptionist, and a leader at Young Life, I have a monthly income of about $3500. To get out of debt I have been using the debt avalanche approach, and have been paying around $2200 monthly which is roughly 63% of my paycheck. Additionally, I have the following mandatory monthly expenses:
Light Bill: $125
Rent: $100
Car Insurance: $100
Phone Bill: $60
Water Bill: $55
Gym membership: $58
Gas: $200
Groceries: $180
Apple music: $5.51
“The debt avalanche, also known as debt stacking, is when you pay off your debts in order from the higher interest rate to the lowest regardless of balance.”
This totals up to $3,083.51 in total monthly expenses. I have a surplus of at least $416.49 each month that I spend on haircuts, car washes, clothes, etc. I also do my best to be charitable. Most of this surplus (also known as discretionary income), will go into other savings accounts and if I work overtime like I usually do, I throw that money at my debt. I also use the Acorns app to round my change to the nearest dollar and put into an investment portfolio. As you may have noticed, I do have some great advantages too. My rent is only $100 as I’m still living with my mom, and the bills are being split between my sister and me. I have no car payments because I was given my father’s old car which helps lower my monthly expenses as well.
Thinking Long-Term
Overall, the way I am going to accomplish my goal of eliminating my debt is by thinking with the end in mind. My life right now isn’t sexy or even attractive, but I’m used to it. In college, I worked roughly 30 hours a week while being a full-time commuting student. As a 22-year-old that still lives with his mom, working an average of over 50 hours a week, I don’t have any big vacations planned for the summer, and I hardly go out on the weekends. Regardless of how boring life may appear right now, I am content with knowing that I’m doing the proper things to expedite the process of getting out of debt.
As for how I will fare due to my hours being cut; I’ve joined our company’s labor pool which means I have signed up to do extraneous tasks at our four main clinic locations. My days may consist of scrubbing toilets, stocking shelves, and screening people at the door instead of doing my usual receptionist work. What will get me off track from my goal is occupying my brain with the fear of missing out in life, or buying things to impress people I don’t care to impress. Growth and comfort are not complements of each other and that’s okay. So yes, 2020 is going to be a hard year but with $15,871.29 left on my student debt, I’m ahead of schedule and I will keep moving forward.
