The story of how I paid off $60,000 in student loans in two years: Part 1
(Don't necessarily do what I did)
Hello new subscribers. Thanks for joining me.
I said in my introductory post that in this next newsletter I would explain how I paid off $60,000 in student loans in two years. I’ll tell you that story, but I need to preface it with something that’s been emphasized in my AFC study materials:
What I do with money, even as a financial counselor in-training, is not necessarily what you “should” do with money. What people do with money is dictated by their individual circumstances and by their values, both of which can change over time.
So, I’m not telling you this story to say “I did this and you should, too!” because in many ways this path was extreme and all-consuming.
But I will tell you that, as my future self, I am glad my past self did it.
Ok. Here we go.
The Conversation
In 2018, I worked just on the edge of SoHo proper. On lunch breaks I’d love to venture into the neighborhood and walk down Prince Street, all tree-lined and lovely.
And one day in early February, on a red bench, in front of a specialty sandwich shop, I remember one of the last phone conversations I had with my dad.
I was telling him that I had figured out how to rollover my 401k from my previous job into a Vanguard IRA.
My dad was a finance officer for the United Nations for 40 years and, in retirement, worked as a tax preparer for fun. He didn’t dole out a ton of advice about money - or about anything at all, frankly – but when I got my first job out of college he told me that at this job, and every job in the future, aim to contribute 10% of my income toward retirement.
I knew he’d be happy with this life update, and he was.
Until I added, “I do have $60,000 of student loans to pay off, though.”
“Ah,” he said.
That was it. Just an “Ah.”
I told you–he wasn’t one to lecture. But I could hear the disappointment and concern in his voice.
That was one of the last conversations we had before his decline.
My dad and me in 2014, the same year I took on my first round of graduate student loans.
The Conference Room
Grief is a hell of a thing. Not only do you feel like a shell of yourself walking in a bad dream you can’t quite believe is happening, but in this shock, in your fog, there’s business to attend to.
You have to call a litany of institutions to tell them your loved one is dead. In between eruptions of tears you can’t control, there are papers to sign and follow up emails and a big, sad party to arrange.
My parents had already purchased their funeral plots, but there was the matter of paying for the rest – the casket, the service fees, the headstone.
At the funeral home, I sat around a large conference table with two of my siblings. As the director laid out the costs, I broke out my credit card. My brother tried to stop me, but I insisted. I had about $7,000 in my emergency fund and I could help.
(Check out this FTC article about what rights you have as you face an industry that can, though not always, take advantage of people in their most vulnerable moments).
I was out about $4,000 by the time I walked out of the room. And whatever. It was my dad.
But I have the privilege of coming from a large family. A few weeks later, the siblings who weren’t in the room with us paid me back.
Suddenly I found myself with almost all of the money I spent.
What people do with money is dictated by their individual circumstances and by their values, both of which can change over time.
What to do with this money? I could’ve put it back in my emergency fund, but in my grief-addled mind, I had already spent that money. In a weird way, it felt like it didn’t belong to me anymore. It felt like I had already, gladly, given it to him.
I couldn’t talk to my dad anymore, but I knew, without a doubt, that I could do something in this world with it that he’d approve of. So in homage to him, I decided to throw it at my debt. I made around a $5,000 lump sum payment toward my debt.
Money is Emo
Was this the wisest financial decision? No. It wasn’t. It’s a very, very good idea to have a 3-6 month emergency fund. (There are some methods to figure out how much to save in an emergency fund and strategies to get there that I’ll get into in a future post).
It was very obviously an emotional decision.
But what I came to realize, and what I’ll explain in part 2, is how many of our decisions around money are emotional. As I continued on this path, I saw what kind of impact bringing those subconscious feelings to the surface can have.
This debt elimination journey started as an homage, but what kept me in the game was harnessing another feeling to my advantage:
Anger.
(to be continued)
ETC.
In my other newsletter, wilt, I link to audio and video clips that have caught my eye or made me think. In every Deconstructing Money post, I’ll include a wilt-esque section of money-related clips and articles and quotes that have done the same:
“Am I spending for who I am or spending for a person I want to be?” - TFD
Why Arizona Iced Tea owner Domenick “Don” Vultaggio won’t raise the price of a can past a dollar - r/workreform
“Real Estate expert answers housing crisis questions” - Wired
“Fear is a natural reaction to moving closer to the truth.” - Pema Chödrön
I’m truly humbled by the amount of interest and support this project has received. If you think someone would enjoy Deconstructing Money, please share it with them:
Thank you, and take care -
Bethel