How to Pay Off Your Student Loans in 2 Years without Selling Drugs

I grew up in a relatively happy home. I was the oldest of 5 children and so I ruled the world. I had a captive audience at all times. I enjoyed my power.

Quite understandably, when it came for me to attend college my parents did not have the money to pay my way (if you believe in that kind of thing). So I was then responsible for selecting and paying for my college education. Three and a half years later, when I graduated college I had about $25k in student loans. I will be the first to admit this isn’t really that bad, but that is also part of how I paid them off in 2 years.

Despite the availability of education in the 21st Century, the infamous “student loan” plagues students across the globe (probably). Millennials are shooting their own lives in the foot, as they attempt to begin their careers entrenched in copious amounts of debt. The imagery is vivid.

We talk about being Eco-friendly and how climate change is going to ruin the world, yet are we living lives that are conducive to making the world cleaner, fresher and colder? People seem to much rather live lives of materialism, debt, and general self-centeredness.

(Bear with me, I’ll get the paying off part in a moment.)

What if we started to live with an attitude of humility and frugality? What if we focused on spending time with others rather than what we can get for ourselves?

If everyone lived with this mentality, the world would be a far better place.

Without getting into the depths of philosophy of life, here are some practical examples of how you can start saving money and start paying off your debt. The reason I bring up all this other stuff is because I now believe it’s more than just carrying out actions or “tricks” to reach debt-free living. It’s an entire mindset shift.

This mindset requires you to be a problem solver. You have to get creative. It’s an art. A game that most people refuse to play. People would rather solve a problem by throwing money at it. Rather than think and figure it out for themselves, they pay someone else to solve the problem for them. Sometimes this may be worth it, but for most of us we can’t afford that type of lifestyle.

Part of getting this to work requires you to think. Want a gym membership? Try working out in your living room, push-ups are free. Running around your apartment complex’s lake is free. Running away from cops is also free. Think outside the box. Be resourceful.

(I do not condone running away from the cops.)

Well, now to the meat and potatoes. Think of the following as a 4 year program that is part of college education. For those of you who are graduated, it’s a 2 year program.

I hate loans more than anything else in the world.

Just a little background, I hate owing people money. I like paying for things myself. I don’t like losing money to interest. It’s another reason I hate renting, but that’s a different story for a different time. I decided when I was young to put together a plan to pay off my student loans. It wasn’t so much as a plan as it was a lifestyle I decided to live.

There are three stages to how I saved enough and made enough to pay off my loans. If one doesn’t seem to be relevant, please feel free to skip it.

Before College

Don’t worry about having to make tons of money, just focus on saving money and learning to start working hard.

1. Save money

It’s the little ways of saving money, lay off the Gatorade, the candy, going to movies. All things in moderation. Have a good time, enjoy what’s left of your childhood, but you can start saving while young. The key concept here is to learn self-control and don’t waste.

2. Work summer jobs.

I was working from the day of my 14th birthday. It was not fun counting tiny bolts in an industrial battery warehouse, but I did enjoy learning to work and it made me realize if I didn’t work hard I could end up counting bolts my whole life. I didn’t want to do that.

Find a job, any job. Mowing lawns, watching your 3-year-old cousin, painting the garage, doing Billy’s math homework for $5. There is a world of opportunity out there and it starts when you decide to seize the day.

3. Apply to scholarships.

This was an area in which I really fell short. I could have saved a ton of money if I had taken advantage of it. I would encourage you to look into major-specific scholarships offered by your school, those tend to be forgotten. There are millions of dollars out there, free for the taking.

4. Do well in school.

When it comes academic scholarships, depending on the school, SAT and ACT scores can have a HUGE impact on the money you can receive. I was lucky to get some pretty great scholarships. I am not that smart, but I took the SAT a second time because I knew I could get my score up and I did. 100 additional points. This bumped me into the next scholarship bracket.

5. Take college courses.

During highschool, I paid the $300 for college courses that were offered at school. The workload really wasn’t too hard and as a result I was able to graduate a semester early—saving $17k!

During College

For you young kiddos still in college, here are some tips to saving money while still having a good time. There were many times I didn’t do things because it cost money, but there were even more times where I still had an awesome time and found a way to do things that were free.

Keep in mind you probably won’t be able to make a ton of money at this stage, because your main focus should be school.

1. Pay as you go.

Remember, you don’t have to pay college all at once. Part of the reason I only had $25k in loans was because I managed to pay off the rest out of pocket as I went. There were some times I barely scraped by, but my main goal was to avoid getting any additional loans outside of my government loans.

2. Worked various jobs at school, from day one.

I found a job in the school computer lab that would let me work up to 20 hours a week on campus, no commuting necessary. Because campus had a limit on hours you could work a week, I also found a job that was shooting talks on campus, where I was paid per video shoot, so that let me get around the school’s rule that you can’t work over 20 hours.

3. Save money.

This might seem obvious, but it’s still worth saying. Work, birthdays, Christmas, no matter the income source, you can’t view the money as yours. It’s not yours. It belongs to Fannie Mae, Discover or some other institution and they are letting you borrow it—for a fee!

4. Spend time with people, but don’t feel obligated to spend money.

When we’d go out to restaurants on Friday nights, there were many, many times I was the one who ordered a water and ate the free bread. I was saving money to pay for college and if that means being a cheapskate, I don’t mind.

I believe this is where you can save the most. People love eating out and they love dragging people out with them, I’d be happy to spend time with people, but I’m not spending $8 on a sandwich I can make for $2 at home.

5. Reel in the drinking habit.

Drinking is very expensive. It’s really not worth it. From a purely objective point of view it’s a complete luxury. If it’s a necessity to you than your problems may go deeper than student loans…

6. Don’t get a car.

You’ll save more money than you can imagine by not getting a car. I understand for some people this is not an option, but once you get a car there are mechanical issues, routine maintenance, insurance, gas and other things that inevitably show up with car ownership. It’s a pain not having “our own vehicle,” but we are trading convince for money here.

7. Re-apply to scholarships.

Oftentimes you’ll end up with one-time scholarships that are only good for a year. Apply to scholarships every year to make sure you’re not missing out on new opportunities.

8. Negotiate with the admissions office.

If you are really close to being able to paying in full for a semester, you can reason with the admissions office. They often have the inside information on new scholarships, available funds and if they like you they might be able to cut you some slack.

9. Major in something that will actually make you money.

I know we’ve hear it before but a philosophy degree is not going to put food in your mouth or Netflix on the TV. Pick a major that is going to make you happy while getting you a job that justifies the investment of an education.

10. Get that summer job.

Summer jobs are your opportunity to sprint ahead and catch up on some of your missed revenue opportunities during the school year. Personally, I recommend finding a job that is a balance between the most profitable and something that is related to your field, perhaps doing a bit of both if you can!

After Graduation: Make More, Spend Less – A Modern Peasant’s Lifestyle

I recently heard Pete the Planner speak and he talked about the dangers of what he refers to as “Lifestyle Creep.” This is where you start to make more money and slowly scale your lifestyle to match. This is why people never get out of debt. This is why people feel like they are always drowning. To counter this, here’s my approach. Every year the goal should be how to cut costs and how to increase revenue.

1. Get a good job.

This might seem dumb, but it’s often a mistake people make. Jobs can be hard to get, but they don’t have to be. Spend some good time putting together a well-written resume, a cover letter that explains why you want to work at that particular company and really try to find a company where there is room to grow.

It’s amazing to me the number of people who just dump their resume into an Indeed template and shoot it off to everyone in the world, regardless of how qualified they are.

Businesses are dying to find great employees. Be that great employee.

2. Never eat out, never drink out.

This sounds depressing, but it’s true. No matter how you shake it, eating out is a luxury and is one of the biggest ways people waste money. You have to remember: this is a temporary pain that will pass. Once you pay off your loans you can eat, drink and be merry.

Apart from giving yourself a slight “reward allowance” You need to bake it into your head that eating out is ALWAYS a waste of money. It’s never worth it. The only time I let myself eat out is when it’s with a bunch of people. It’s less about eating and more about the time I’m going to spend with them. But even this is rare. It’s okay to go out with friends and just order a water. It might feel dumb at first but you can always say you’re vegan or something like that.

Food and alcohol are expensive and it doesn’t make sense to go out to eat when you own someone $30k. Even with a low interest rate.

3. Work a second job.

From what I hear, a lot of people are doing this, but it’s important to not just get any job. You want to find a job that allows you to get the best return for your time. If I had gotten a different job, I could make way more money, but I decided to start a company with a friend of mine, helping businesses with their websites and their marketing. We brought in about $7k in our first year, it might not seem like much but that was money that I could put towards my loans. I also see this as an investment, to make way more money in the future.

There are tons of part-time opportunities. You can get a remote job working a couple hours a week from you house. You could bar tend down the street. Uber and Lyft are another way to bring in some extra cash. The point is that especially if you are single, you have a bunch of extra time and there is a 95% change that you are not using that time well. You could start your own store on Etsy. You could sell things on eBay. If you have a secret skill or a hobby, try to leverage that to get things done and make money!

4. Sweat the Small Stuff: Walk to work

It’s not about winning the lottery or finding 100 dollar bills on the street, it’s really a constant flow of small sacrifices that result in a big difference over a long period of time. I moved a bit closer to work which allowed me to walk, save on gas and I got a free bike from a friend which made commuting even easier.

5. Cheaper Rent

I found cheaper rent for my second year. It was in a crappier apartment, but it knocked $130 off my bill each month. Not only was it cheaper, but it was closer to work!

6. Get rid of internet

I decided to get rid of internet. Being a designer/web developer this was a major thing. I would often talk about how the internet was my “life blood” and how it was essential to every bit of work I do.

I’ve started to realize the internet is also poison. So I figured it couldn’t hurt to see how long I could go. I made it an entire 14 months without internet at my apartment. If I needed internet I used my phone for the small things, went to Starbucks or Panera or just went to my office and worked there. It really was not that bad. It forced me to focus on what is important and prioritize when I’m working on internet-related projects.

7. Don’t pay into your 401(k)

The goal is to pay off your interest, so if you’re paying 10% interest, your money is worth more paying off the debt rather than making investments this early in your life. I’m not a licensed financial planner so don’t quote me on that.

8. Go with a cheaper phone plan

Chances are you can get away with WiFi only in this wonderful world we live in, or perhaps downgrading to 1GB a month is managable. You can save a lot of money downgrading your plan (and your phone.)

9. Get rid of the excess

This includes Netflix, Hulu, Amazon Prime, Spotify anything extra. Especially those pesky subscriptions. Spend some time going through your credit cards and canceling anything that is not essential to life. You don’t need it and you can always go back.

10. Eat like your life isn’t depending on it

I won’t lie, I ate oatmeal for breakfast for 2 years.

Now there was some variation here and there, I won’t be totally dramatic, but for the most part it was oatmeal. Oatmeal is a very cheap, filling, and healthy breakfast. The only thing it’s missing is taste.

Shopping at Aldi was the other half of the equation. I was able to save so much on groceries, it wasn’t funny, all while eating healthy. I believe eating well is a critical element to this entire lifestyle. Say goodbye to the processed foods and the pre-made goods. I even started making my own bread and biscuits from scratch. They were delicious. And cheap.

I buy a ton of fresh veggies, fruits, eggs and meat. Stick to the basics. I spend on average $35 in groceries, which lasts me about ~9 days or so, but that is pushing it a bit.

  • Use the “price per ounce/lb” to gauge what product is most worth your money
  • Don’t buy packaged goods, buy it fresh
  • Cut back on meat (it’s expensive)
  • Skip things that aren’t on sale (this means eating based on availability)
  • Keep laying off the alcohol (it’s not worth it)
  • Get a bread machine, it takes about 10 minutes of prep to make a loaf of fresh bread.

11. Let people know you’re trying to save up

It’s easy to become ashamed of being cheap or trying to live a life of frugality, but I say to just hold your head high. People will definitely look down on you and give you a hard time, but the fact is that they will also give you their old furniture when they redecorate their house, food when they are going out of town, and they will understand your behavior better when you don’t want to go out to eat.

Really what you are doing is preventing waste and being about as eco-friendly as possible.

12. Get a cheap car

This is definitely a tricky one, but the fact is that you can get a car that works great for $2k-$3k on Craigslist. It can be a little stressful, but I honestly believe you are just as well off getting a Craigslist car as you are getting one from the dealer. Dealers are just as likely to screw you as someone from Craigslist.

13. Craigslist free list

I got most of my furniture from the Craigslist free list. It’s amazing the stuff. People give away desks, chairs, shelves, couches—you name it. They usually just want it taken out of their garage. Sure it would be nice to get it nice and new from Ikea, but what about getting something free? That’s less stuff in a landfill.

Bonus: Give 150% and Ask for a Raise

This isn’t always available to everyone, but it is important. Especially if you are a hard worker, chances are you are probably being underpaid.

The only way this works is if you truly make yourself an asset at work that no one can find anywhere else. This means working late, finding ways to save the company money and bringing real value to the table. Exceed expectations in every way. You can’t just ask for a raise because you feel like it—you need to make it obvious you deserve one. I once heard that 1 Million Dollars was left on the table in your lifetime…because you never asked for a raise. That is a lot of money.

Approach your employer with a pitch for why you want a raise and your reasons for your target range. Put together a roadmap to show how you have helped grow the company and save the business money.

Also take some time to research negotiation skills, there’s a book called “Never Split the Difference” that I highly recommend. Too many of us won’t stick up for ourselves and so we spend most of our lives being taken advantage of.

In review: Mindset Shift => I Deserve Nothing

You need to realize that when you are in debt you own nothing. The money you’re making is someone else’s money. Once we learn to think like this it’s much easier to start living the meager lifestyle necessary to pay back loans like this at such a rapid rate.

The prevalent attitude of rewarding ourselves with money that doesn’t belong to us is fundamentally flawed. We keep lying to ourselves. I think this is one of the critical issues in the minds of millennials. We need to grow up and be responsible for our own lives and our own educations.

Focus on People
I think really a lot of this can be fixed by changing how we live our lives and making it less about us. Going out the movies is a lousy way to spend time with someone. Try going for a walk. Go hiking at the state park. Find a free museum.

Don’t Despair! Despite being a generally boring person, I did a lot of fun things during this same period of time! I traveled abroad in Europe for an entire semester, I purchased 3 cars (please note: they were crappy cars and mostly at separate times), I bought my $3k laptop, had great times with friends, moved across the country and wasted PLENTY of money. My point is that you can still enjoy life here and there, while saving money.

We’re trading convenience for money, so life is going to be a bit inconvenient for a bit, but it’s worth it!

Have a Party There is nothing more freeing than paying off your last student loan. It has been almost a lifelong goal of mine. Now I can say that I paid my way through college and I’m debt free at 23.

I encourage you to throw a party when you pay your last loan. Let loose a little, spend some money to enjoy yourself. You deserve it. Me, I bought a handle of bourbon, a flank steak and enjoyed both by a crackling fire…or maybe that was Ron Swanson.

Good luck out there 🙂

How did you go about paying off your student loans? Any tips you want to share?