How we think about it and address it is half the battle.
Just last year, I was in a completely different mind state:
My debt was looming over my head like a dark cloud that was meant to torture me for the rest of my life. I really had zero clue as to how I was supposed to make my loan payments, pay all my bills, and live my fabulous life all at the same time. For years, I’ve been saying I want to be debt-free by the time I’m 30, but didn’t have a plan to do it. I started praying, asking God to reveal to me the ways in which I could see my way out of this.
After girding up the confidence to look my loans in the face, I made a plan.
Here are the steps and strategies I’ve used to aggressively pay down my debt. You don’t have to do all of them, but implementing just one of these strategies will save you time, interest, and a lot of stress. Let's get into it:
1. Look for things in your home that you can sell
If you’re wondering about the remaining $1800.00 I’m promised to find, I’ve already started marking up different items for sale and have a jumbo Post-it full of prices. I’ll keep yall updated.
My Advice: You don’t have to have expensive clothes to make a ton of money. If you have gently worn shoes, bags, and clothing, there’s a resale market for you. Remember that these are clothes that you’re no longer wearing, so selling them at a low price is still somewhat of a profit. If you’re about that sample sale life, try and attend a few and get things that you know are in demand, but also something you would truly buy and wear. You want to make sure you’re only buying something you actually want incase it doesn’t sell as fast as you think it should. You should also only buy it if it’s within budget so that if it doesn’t sell, you didn’t overspend in hopes for a come-up. If you do plan on reselling, be sure to only gently use the items so you can still get a good retail value for them. If clothes and shoes is not your thing, take a look at your home and see what household goods & valuables can be sold. No item is too small or big. I’ve sold wine glasses and vases online, and believe me, it adds up.
2. GET A NEW JOB
On a serious note, don’t roll your eyes just yet. This sounds like the obvious solution to your problems but it’s not as easy as you think; There’s a difference between getting a new job and getting a new job that will change your financial circumstances. Making more money has to be strategic, properly timed, and aggressively executed. For example, let’s say you make $50,000 a year. On a 52 week calendar, you’re making $961 dollars a week, or $3,846 dollars a month before taxes. Let’s say you leave your job and take another that pays you $55,000 a year. Though it’s not a lot, you just went from making $961 a week to $1057, which is an extra $96 dollars a week. That extra $384 (well, 270 something after taxes) a month can go directly towards your loan plus whatever you are paying now assuming that you maintain the same lifestyle. You can take years off of your repayment plan with that small adjustment.
My advice: If you’re ready and willing to change jobs, start applying for competitive positions that you qualify for. When using a job search site, set your salary filter to the desired amount. If you were making $40,000 last year, chances are the job that pays $100,000 might be a little over zealous, and require way more experience, but if you have the skills, legit resume, and credibility to reach for that $70,000 job, go for it. Most people don’t go out for half of the jobs they qualify for because they’re afraid to ask for more money and are too comfortable working the same positions.
Here’s an extra tip: Instead of going for a job that only pays you $5,000 more, set the bar for a $7,000-10,000 or more increase to see a real impact in your salary and loan payments. Your taxes may go up depending on your bracket, but that extra money you’re making can make a world of a difference in your repayment plan. The key is to use your additional income to increase your payments, not your lifestyle.
Note: You can also wait/ask for a raise at your current job, if that's an option.
3. If you can’t get a new job, add another one, and then another one
Where there is a skill, there is definitely pay.
My advice: If you are one of those people who thinks they don’t have a unique skill, think of a hobby you would be interested in and start to master it. Once you master it, monetize it. If you know you have a skill, whether it’s a craft, baking, marketing-whatever- and you’ve started to make sales from it on the low, FORMALIZE YOUR BUSINESS AND START WRITING OFF ALL YOUR BUSINESS RELATED EXPENSES WHEN YOU DO YOUR TAXES.
A lot of people think they’re saving money by not paying taxes on their side hustles, but a lot people don’t know the glory or benefits of a tax write-off either.
If you bought a printer to print out your designs, save the receipt and write it off.
If you own an events company and you spent money on anything from pencils to paper and a notebook, write that joint off on your taxes.
If you use your laptop to do work for your business, you can write that off, even if it’s used.
If you work out of your home, you can write that off too.
Did you fly somewhere to meet with a manufacturer, or attend a conference?
This year, I received over $5,000 back because of the amount of money I spent investing in myself and my business. You can guess what that money went towards.
It makes a difference.
4. Take an honest look at your budget and start cutting things you know you don’t need
First things first: Do you have a proper budget?
I’m not talking about “it’s in my head,” or an “I’ll look at my bank account and see what’s there” budget. I mean a legit break-it-down budget.
Don’t think you’re off the hook if you’re using an app :)
(If you have an app and you rely on it to tell you how much you’re spending, but you don’t use it to make tactful adjustments to your spending habits, it’s pretty much useless.)
You need a pen and paper, an excel sheet, and an itemized list of exactly how much money you have coming in with a plan for how you’re going to spend it. If you know you only have enough money coming in to pay your rent and buy gas, you probably should not be going to Coachella (I swear, I’m sorry.)
My advice: Take an honest hardcore look at your budget. Look at the things you know you can live without, and be real about it. Can you swap your cable for just internet and stream your favorite shows? Do you really need to go out to eat at fancy restaurants every month? Do you have to get your nails done? How much money are you paying in rent and can you move to a cheaper spot or get a roommate?(you can always live somewhere cheaper.) Do you have to shop at Whole Foods or can you take your fancy pants to Trader Joes and Farm Fresh?
Challenge: Try and see if you can cut back $100-$200 dollars from your budget and reapply that money to your loans. If you can do that, that’s an extra $1,200-$2,400 more you’re making towards your payment a year, and every little bit counts. If you’re making a healthy salary, I’d even go as far as cutting at least $500-$1,000 of your budget, but I understand if that’s not doable.
Changing your lifestyle is difficult and it takes a lot of practice. Believe it or not, I have done all of the things listed above with the hardest being budget slashing. With these minor changes, I’ve paid off 30% of my biggest loan and plan to pay the remaining balance this year. All of the sacrifices are worth it when you know you're that much closer to your goal.
There are so many things that I want to buy and do, but I know they're not a priority; I’m driving a 2004 Prius that I bought at an auction because I knew a car note didn’t fit in my budget, and neither did premium gas. I want a new car, but not getting one saved me over $8,000 dollars.
I spend around the same amount every week at the grocery store because I know that by not winging It, I stay within budget.
I learned how to do my own hair and only go to the salon when I have a special event or need a trim because I know those 2 week visits add up quick.
These are a fraction of the sacrifices I’ve made, so that by the time I’m 30 (2 years time), I will have zero student loan debt and I can buy whatever I want, freely, forever.
I know that what works for me won’t work for everyone else- we all have different responsibilities, struggles, and circumstances- but when it comes to saving and personal growth, we can always do more, even if it’s a little bit.
The longer you wait to pay off your loans, the more money you will owe, so the best thing to do is make an unfortunate situation work in your favor, plus learn how to be disciplined in the process.
If you’re trying to figure out where to start and need a little extra help, you can enter your email below to receive a free budget calculator that is super easy to use and will automatically update with real numbers to give you an idea of where you are and where you want to be. I use this every month to put my finances and goals into perspective so that I can continue to make boss moves as I pay down my debt. If you found these tips to be helpful or have any comments, please leave them below! Feel free to also email me here .