My wife and I both went to private colleges for college. Not surprisingly we also graduated with student loan debt.
A lot of student loan debt. Around $100k of student loan debt.
Until I published my book Hustle Away Debt I had not revealed how much debt we had left college with.
$100k may sound like a lot of debt, but unfortunately there is a growing number of millennials who can relate to our story. Outstanding student loan debt is nearing $1.4 trillion and the average class of 2016 graduate had approximately $35k in student loans.
Both on this blog and in Hustle Away Debt my focus is on those who have already incurred student loan debt. After all, the countless articles on “how to graduate college with less debt” are not helpful to those who have already incurred tens of thousands in student loans.
I graduated college in December of 2010, so I’ve been paying off my loans for a while now. Today I want to share what I did about my student loan debt, and what I continue to do today.
The good news for those who have student loan debt is that there is a big opportunity for you to speed up your student loan repayment and/or attack other financial goals while paying down debt. You are not confined to your 9-5 income nor are you doomed to living paycheck-to-paycheck the next decade of your life.
I Got Organized
Similar to many things in life, the more organized you are when it comes to your personal finances, the more likely you will be able to improve your situation.
Here’s some questions you should be able to answer about your finances:
Do you know exactly how much money you make and spend each month?
Do you know how much you spend each month on categories like groceries, restaurants, and clothes?
How much debt are you in? At what interest and payback terms?
The list goes on, but you get my point: you need to understand where you stand financially before you can make an impact on your finances.
For me getting organized meant starting to track our income and expenses each month. I’ve now been doing that for over four years and it’s so nice to have so much data about our income and expenses. I also listed out our student loans in a spreadsheet and included details like amount, interest rate, and company that owns the debt.
These may seem like small steps but they are essential to make changes – and to measure success of those changes. We started couponing years ago and were able to track the amount we saved. We also were able to look into cutting the cost of cable, internet, cell phones, and more. The costs – and savings – become much more real when you are looking at them each month.
In my recent post 40+ Ways to Improve Your Finances This Month I share a whole list of ideas for organizing your finances.
I Pursued Higher-Paying Jobs
Some people have a spending problem, but what I’ve noticed in the years I’ve written about and worked with millennials is that an increase in income can have a much greater impact than a cut in spending, especially for those who are in student loan debt.
Don’t get me wrong, I’m all about being smart with the money you do have. Using coupons, spending less, and using your money strategically are all important and are topics I’ve discussed over the years. But the reality is that cutting spending can only go so far. If my minimum student loan payment is $1,000 a month, that’s a fixed cost that can’t simply be “cut.”
Because of this a great deal of my focus on this blog and really the whole basis of Hustle Away Debt is increasing income. One of the effective ways to increase income is at your 9-5 job.
Some think that the higher you move up the longer the hours. This isn’t entirely true. A Director making 2 to 3 times as much as an entry-level accountant is not working 2 to 3 times as long. In fact when I myself was an entry-level accountant there were many late nights closing the books.
With that in mind it makes sense to increase your income at your 9-5 whenever possible. It can mean the same hours but higher compensation. You will also be able to position yourself for additional promotions and pay increases.
While I also pursued side hustles, which I talk about in the next section of this post, I definitely pursued higher pay at my 9-5. The increased pay has a material impact on my wife and my finances, especially considering our student loan debt.
I would highly recommend you give my post How to Find and Compare Salary Data a read. A family friend of ours recently read this post and used the information provided to negotiate a large increase in pay at her employer. She had no idea these resources were available.
I Started Multiple Side Hustles
At a 9-5 job there is only so much control an employee has over their salary. Even if you get promoted early and often, there is typically 2+ years where you literally could work 40 hours or 100 hours and your compensation and career prospects would be about the same.
For people with student loans they want to pay off and other financial goals, their 9-5 income sometimes won’t cut it. This can be a difficult spot to be in. Even if you are able to land a good job after graduation, you are likely making the least amount of money you will make over the course of your career.
My solution to this was side hustles. Side hustles are any way to make extra money outside of your 9-5. They are the basis of my book Hustle Away Debt and have had a huge impact on my life.
In the first chapter of Hustle Away Debt I talk about side hustles I’ve pursued. They include blogging, freelance writing, freelance Excel spreadsheet work, and more.
Side hustles have huge upside because they don’t confine you
One thing people tend to miss when it comes to side hustles is the fact that you can be creative when picking a side hustle or side hustles. They don’t have to fit in a box. For example one thing I do is “travel hack” and get free flights by signing up for credit cards that have bonus offers. Doing this has allowed my wife and I to travel for much less than we otherwise would have had to pay. When your flights are free travel becomes much more affordable!
I know someone who has made thousands of dollars on Swagbucks, which seems unheard of (or impossible) to people who are familiar with the service. But they enjoy it and it’s their side hustle, so they go all out with it.
There are countless side hustles (here’s 50+ that can be done from the comfort of your home) and I love how it gives people control over their income.
Being able to make extra money through side hustles is just one of the upsides of pursuing a side hustle. I go into this in more depth in my book, but side hustles can also help you develop skills that benefit you at your 9-5, they can potentially allow you to quit your job, and they also give you the option of testing out business ideas without sacrificing your stable full-time income.
Obviously I am HUGE on side hustles, but for good reason. For over three years now they have completely offset our $1,000/month student loan payment, and then some. It’s allowed us to pursue goals like building an emergency fund, investing, and more that otherwise would not have been possible if we relied solely on our 9-5 income.
I Sacrificed
If you really want to confront your student loan debt and make progress towards your financial goals and, in turn, your dreams for your life, you need to be willing to sacrifice. The past few years my wife and I have sacrificed greatly to improve our financial situation and it hasn’t always been easy.
The time I’ve sacrificed to side hustles the past 5+ years hasn’t been immaterial by any means. Time that I was side hustling could have been spent with friends, family, or just relaxing around the house.
To get in a better spot financially you don’t have to work 30 hours a week on a side hustle, though. You may not need a side hustle at all. Perhaps you
For me, though, side hustles were the answer. My goals are bigger than a nice job title working a 9-5. I want to start businesses and have control over my schedule. I want to create jobs for others. I want to be in a place financially to be able to take those risks. And that will take sacrifice. A lot of it.
Regardless of what your goals are or what your motivation is for attacking your student loans, remember to take action. Doing something today will benefit you greatly a year, five years, and even decades down the road.
Start a blog. Pick one of the 50+ online side hustles I recently wrote about. Track your spending. Update your resume. Compare salary data. Pick one of these and get started today on your journey to having a better handle on your debt – and paying it off faster!
If you have student loan debt have you taken action to get in a better place financially? If you don’t have student loans, what are you doing to get in a better place financially?
Check out some of our favorite personal finance resources:
Are you getting the best credit card rewards? Check out the top cash back credit card offers (updated daily)
Make extra money: 15 ways to make money from your computer
Get the First Chapter Free!
Join our online community and get the first chapter of the book Student Loan Solution absolutely FREE!
I had my first budget in 2012 and I was in a little debt but having lost jobs I’ve started to find several side hustle income and I’ve kept dog sitting and work in the cafe from September till June to save more, now that I’m debt free I’m really focused on savings….
That’s great that you are debt free! Congratulations! I’ve read some of your posts about side hustles. It’s inspiring to read what you’ve been doing to make extra money.
Awesome David! I had a looming student loan debt bill a few years ago – def not as big as yours. I picked up a second job working retail. I started aggressively paying off the debt but working 20-30 hours a week on the second job in addition to my 40 hour work week career. I was able to pay off the debt in about 2 years and kept the second job for a little longer but cut the hours to make sure my emergency fund was fully funded.
I agree these are sacrifices, but it felt so good to get that debt off my shoulders. It was worth it and I made life long friends at the second job so it ended up being a win win.
Wow what an incredible testimony! I may have to interview you for a future post. I think there’s way too many people out there who absolutely NO WAY would consider working a retail job on top of their 9-5. In reality it can be the key to getting yourself out of debt (and quick).
Great point about increasing your 9-5 income, too. I see so many recent graduates who don’t push themselves enough in that area and stay at their entry-level jobs for years without ever asking or trying for a raise or promotion. As you have shown, if there isn’t opportunity to earn more in front of you, you can create it!
Definitely! And I’m not trying to make it sound like moving up at a 9-5 is easy, and I know firsthand that raises can be difficult to come by. But I think people should at least consider looking into increasing their 9-5 income. Some people will be much happier pursuing this than side hustles. And even if people like pursuing side hustle income (like me) it doesn’t hurt to ALSO make more at your 9-5!
One thing with a side hustle is that you have to have a passion for it, you have to love it or else it will be very easy to stray from it and give up.
That’s a really good point. And even if you do love it there’s a risk of giving up. Side hustles aren’t easy! Giving up free time to pursue work is a tough pill to follow. But if you are motivated enough it can have huge upside.
Awesome post David. I graduated with over 100K in debt all by myself as did many of my colleagues. It’s definitely a battle but awareness is the key. I talk to people who complain about their student debt load but routinely lease the latest luxury cars. Something doesn’t add up there.
You really have to go all in as far as saving money on your expenses and making more money via side businesses and your regular job.
There’s certainly people with spending problems, but I do think that a majority of people in debt have an income problem. If you can be strategic about your finances and pursue opportunities for more income, you are bound to get in a better place financially.
I’ve done a few things on this list. A lot of people don’t realize that the sacrifice doesn’t have to be forever. It’s just temporary. I will start looking for a higher paying job in the next couple of months because that will speed the debt repayment process up.
You’re right about the temporary status. For some people it’s more about starting a business that they WOULD like to go on indefinitely, but it doesn’t mean you have to sacrifice your free time forever if you don’t want to. Side hustles are what you make of them and I always encourage people to think about how they can integrate them into their lifestyle appropriately.
As someone from the UK I don’t think I’ll ever understand the American style student loan but all I know is $100k is huge, and to think some may have more. Really admire you discipline and perseverance in paying them down and I think for anyone with any kind of debt, student or not, this is a great post. Whether it be a pay rise, side hustle or better budgeting everyone can give themselves the chance of getting rid of debt quicker!
It’s definitely a “different world” over here and I’ve noticed that others from outside the US have trouble understanding how normal student loan debt is over here. It really has reached epidemic proportions and there’s no end in site. Thankfully there is also huge opportunity for those who are willing to be disciplined and sacrifice.
I’m glad you’re sharing your story since a lot of people can learn from you. I agree wholeheartedly with what you said about sacrificing. It’s one of the hardest things to do but it’s crucial in terms of being successful with your finances.
Definitely! I also think those in their 20s and 30s are in a unique situation where they can sacrifice more so than those in their 40s and beyond. Beyond that I also think being driven and clued in on business/tech trends make it an ideal time to sacrifice some of your free time to potentially set yourself up through the future through eliminating debt, getting in a better spot financially, and maybe even launching a business!
I finished grad school with over $90k in student loan debt. I’m still paying it off, but we made a lot of sacrifices to pay off a large portion of it. Generally, any extra income I earn (side hustle, bonus) goes straight to my student loan debt.
That’s a great use of side income! Debt isn’t fun, but it is pretty cool how it can motivate you to work harder and make sacrifices that you otherwise wouldn’t make.
I can’t imagine graduating with that much debt, but I did in a less expensive time; twice. The cost of education has rocketed unequally compared to other expenses and income. The old saying, “Education Pays,” seems to mean more for those making money off of education than those paying for it.
You’ve got great info for those in student debt, and for those with plain old debt. It’s a matter of deciding to do something, then doing it. Debt does not have to be forever.
Keep up the great work! Looking forward to hearing more about your current Side Hustle!