(1) Keep your day job.
We’ve seen lots of folks quitting their day jobs to pursue their passions full time. It seems that a lot of of millennials are looking for ways to beat the 9 – 5. I can DEFINITELY respect and aspire to that journey, but in the mean time, we are keeping the jobs we have gone to school for, for so long. Danny will make a good salary as a dentist. He will be pursuing one thing he loves and helping people. He’ll have great hours. You really can’t beat that. I will continue to be a lawyer. I might not have the great hours Danny will have, but we will be able to chip away at our debt with our dual income.
We need a steady flow of income coming in so we can pay off debt fast. We have business ideas and ventures that will take some time money to pursue. Instead of foregoing our 9-5’s to pursue those ventures, we are pursuing them while keeping our 9-5’s. I know what you are thinking– on every single episode of Shark Tank the investors ask the start up’s if they are working on their product/service full time. If they aren’t, Mark Cuban and his buddies almost never invest with them. But ask yourself this, is Mark Cuban only working on one thing? Absolutely not. And he’s way more filthy rich than the people coming to him asking him for money. So do you want to be like Mark Cuban, or do you want to be like some poor guy coming in asking for money? Cuban. Every time.
So, for now, we are keeping our day jobs. And we are adding more jobs too, which leads us to #2.
(2) Master the art of the side hustle.
If you are going to pay off big debt (for us, well over six figures of debt) you are going to have to increase your income. One way to do so is by mastering the art of the side hustle. In addition to working your day job, you should be doing something else on the side to earn extra cash that can go into your student loans. This can range from starting up some business venture, to doing smaller things, like participating in focus groups.
We do photography on the side. We sell stock photos. We have this blog. We shop sales and use coupons for groceries. We are mystery shoppers. We’ve also been known to mow other people’s yards, paint other peoples houses/businesses, babysit, sell plasma, pick PENNIES up off the ground, do online surveys, the list goes on. We are constantly searching for side hustling opportunities.
(3) Make your student loan payments your top priority.
We pay tithing to our church, put a teeny tiny amount in savings, allocate a small amount to our monthly budget, and dump the REMAINDER in student loans. Student loans are our highest monthly payment, by a long shot. In fact, we pay more to our student loans than the rest of our monthly budget combined. We were pretty unlucky when it comes to interest on our student loans. Many of our loans have between 7% – 8% interest. That adds up fast when you have six figures of debt. It might make sense for other people who have a much lower rate to invest their money otherwise and not be in such a rush to pay them off. For us, everything extra goes to student loans, every time.
When we think “Ohhhh I am craving sushi!” our second thought is “hmmm. $40 of sushi at 8% interest over the next 5-10 years.” All of the sudden, that expensive sushi just got really expensive ($56 over five years, $72 over 10, if you were wondering). That is a surefire way to help yourself stay committed to your student loan repayment.
(4) Live where the cost of living is low.
We are moving to TULSA Oklahoma next month. When people around us find out that is where we are headed, we generally get scrunched up faces and lots of follow up questions. They don’t understand two things that were huge for us that Tulsa has: 1) the nicest people in the U.S. and 2) a crazy cheap cost of living. In fact, AREA VIBES gives it an A+ for cost of living and SPERLING’S BEST PLACES rates Tulsa as one of the best places to live because the cost of living is well below the national average. So, we might die in tornadoes and earth quakes, but we will live cheaply and the people around us will be nice.
So many of us focus on saving money in little ways like eating out less, couponing, or otherwise living frugally. But if you have any control over where you live, you can save THOUSANDS of dollars just by living somewhere cheap. Its an easy way to save BIG.
(5) Drive a used car and take public transit.
I feel like this is one of the easiest ways to save thousands of dollars.
You don’t need a fancy car.
You don’t need a new car.
But, you also don’t have to drive a total clunker, finances permitting. Don’t be afraid to drive a used, modest car. Also, don’t be afraid of public transportation. Ehhh.. Depending on where you live. Some places, I guess you should be afraid. In Tulsa, public transportation is just not well designed and is almost impossible to get everywhere you need to go. We LOVED living in China and taking public transportation everywhere we went. No car maintenance, no paying for gas, no monthly payment. Just shell out a few bucks and get going. Obviously this is not feasible everywhere
After we totaled our car in December, we bought an old 2006 Toyota that cost $5000. It runs great and our payment is about $100 a month. It is actually pretty fun to drive and has a cute little sun roof. We had people ask us what we were going to buy a car from when we started shopping around and we couldn’t believe how many people suggested new cars for us, knowing how much debt we have. Frankly, we don’t have $30-50k just lying around to pay for a new car with– and if we did, it would go straight into student loans. It just has become the norm to buy a new car and it is not necessary. Now, if you can afford a new car, more power to ya. Go for it. We can’t, so we didn’t. And we are perfectly happy with what we have.
(6) Invest in small things that will give you immediate cash flow.
We’ll be posting more about this in the future. We have started investing in rental income properties as a strategy to help pay off our student loans. This is obviously more controversial, but when we have as much debt as we have, we are going to have to be creative to pay it off. I do not recommend this strategy for everyone. For us, it makes sense because where we are moving the cost of rent is high but the cost of a mortgage is cheap. We also qualify for “physicians loans” where we don’t need a big down payment (or actually any down payment at all). We are hoping to pull in a little bit of cash flow to help pay off our debt faster. We are willing to be landlords, but we can definitely appreciate that is not something everyone is willing to or even should do.
What are YOU doing to pay off debt?
And, since its Friday, how about a baby M meme: