No more student loans

November 2018 will always be remembered as the first month of my freedom from student loans. I am very grateful to no longer have student loans. Back in September, I shared some exciting news on Twitter. At the beginning of the month, I requested the payoff letter to make my final student loan payment. You can see the tweet here:

Just requested a payoff letter for my student loans.

Final payment in October. Took 5 years but there is a light at the end of the tunnel.

Can’t wait to cut that final check. #studentloans

— GuyonFIRE (@Guyon_FIRE) September 3, 2018

Later in September, I shared a screenshot of my final payment scheduled for October 1st. Submitting the final payment provided a euphoric high that I can’t quite describe. It almost felt like being a kid again on Christmas morning or that post-game high after winning the big game.

The best $491.26 I’ve ever spent. Just submitted the last payment on my student loans.

Took 5 years to pay them off. Paying a bill has never felt so good. pic.twitter.com/JheP2rJu1x

— GuyonFIRE (@Guyon_FIRE) September 24, 2018

Now, I am finally free from the financial burden of student loans. It feels great to no longer have my student loans hanging over my head. I have one less check I have to write every month. I have one less bill that I am required to pay every month.

This debt took more than five years to knock out; I’m thrilled it’s gone. I have no plans to accumulate more student debt in the future. Paying off my student loans was once is enough; I don’t want to go through the pain again.

On the bright side, I now have a few hundred extra dollars a month in free cash flow. This will be very helpful moving forward. In general, this lowers my expenses by $300-600/month. I can use the extra cash flow to pay down my car loan, have a bit more fun, or save and invest more.

Things I did to pay off my student loans faster

There were some things I did that allowed me to repay my student loans helped early. I always made more than the minimum payment. Early on, when I was only a few months into my career, I could only spare an extra $10, $20, or $50.

Over time, I increased the amount I paid every month. This was after my emergency fund was fully funded, my income was higher, and I was pulling in income from my side hustles. I began paying an extra $100 a month. Eventually, I started making double payments. This really sped things up.

Why I didn’t pay my student loans off earlier

I will be the first to acknowledge that I am very fortunate and blessed. I have a moderate to high income depending on who you ask. I have also built a rental property portfolio that provides great income most months. Many would argue that I could’ve paid my loans off a few years ago. They are probably right.

However, I decided to take my time with repaying my loans. First, I wanted to focus on building my real estate business and investing in rental properties. Paying down my student loans more aggressively would have meant less cash to buy real estate.

Second, my student loans had a low and fixed interest rate of 4.0%. I wanted to offensively build wealth and knew I could compound (grow) my money faster than my student loans. 4.0% is a low-interest rate. The stock market averages an 8.0% return every year. The math suggests I should focus on investing.

Third, I was comfortable with my pace. I didn’t lose sleep thinking about my student loans. Sure, my student loans sucked to look at, but I wasn’t stressing over them. I knew they would be gone eventually. I did not want to live a life of deprivation just to pay my loans off a few months earlier. I wanted the flexibility to enjoy my latte or avocado toast.

Student loan repayment stories

I had below average student loans (total $20k) with an above average income (relative to the national average and median; average and below average income for DC for most of my journey). You may not be able to relate to my personal student loan story. And that’s ok. Below you will find a list of stories from individuals with various backgrounds. Some with tons of debt. Others with lower income.

Please message me if you’d like your story added to the list.

All She Saves – is on a mission to pay off over $50k in student loans while traveling one country at a time.

Apathy Ends – paid off over $85k in student loans. He did not earn a six-figure salary but was able to crush his debt in 7 years

Diana on a Dime – paid off $105,405 of her student loans in three years AND she did this on a teachers salary. She has about another $100k to go. Check out how a teacher is able to crush her student loans

Erin from Reaching for FI – crushed her student loans earlier this year. Erin lives in an expensive city (DC) and works for a non-profit (lower income job). This did not stop her from kicking her student loans to the curb.

Even Steven – paid off $46,500 in 2 years and 3 months. He provides some great tips for tackling student loan debt.

Frugal Millennial – Jen and her husband have a combined $117k in student loans. They’re aggressively tackling their student loans and are close to the finish line.

J from Millennial Boss & the Fire Drill Podcast – paid off $89,000 in 18 months. She graduated with a liberal arts degree and three non-profit internship experiences. Safe to say she was not poised to be a high-income earner.

Money Saved is Money Earned – had below average debt ($13.5k) and a below average income. This debt disappeared in 2.5 years AND she went on to pay for grad school without taking on more debt. Anything is possible.

Stephanie from Six-Figures Under – shares a great story about how their family paid off $144k of law school debt in about three years. This was while raising a family of five and earning $39k/year.