Today is April 13th, 2017 and I just submitted my final student loan payment! I can finally say I am officially Debt Free!
Let me repeat that one more time. I am DEBT FREE!!
It has a nice ring to it. 🙂
I have had the goal of becoming debt free ever since I graduated college. Racking up Student Loan debt wasn’t something I was thinking about while I was in school. I figured it was normal because all my peers were taking out loans and I never had any formal education on the subject. Young and naĂŻve, I racked up over $50,000 in student loan debt over my college years. Most of this debt included tuition, housing for a year, and some extra money each semester for books. While I was still in school, I didn’t want to worry about paying off debt until I needed to. If only I could go back in time and change my college mindset.
Let me review how I climbed out of my $50k financial hole!
My Debt Free Journey
2013
After graduating college in May of 2013, I moved from San Antonio to Austin, TX for a job at an IT Consulting Company. My debt free journey started about six months later in November of 2013Â when my student loans came out of deferment.
In 2013, my older sister and brother-in-law started preaching the Dave Ramsey gospel of being debt free (Can I get a Debt Free Amen!?). Â They got me hooked to pay off my student loan debt as soon as possible using the snowball method. After viewing their success of paying off nearly $100k of debt in 18 months, I was determined to be debt free as soon as possible. My sister helped me organize all my student loan accounts and plan on which loans I would pay off first.
I had 3 Student Loan Accounts to pay off.
Following the Snowball method, I attacked the Nelnet loan first.
The Nelnet loan was originally for $5,500 but had been accruing interest since 2008 (first semester in college) at an interest rate of 6.8% to $7,387. It had accumulated almost $2k in interest before I graduated. I was totally unaware.
It’s important to know if you have an Unsubsidized Student Loan that interest is accruing right after the loan is taken out. Learn from my mistakes and take measures to try to pay off interest before it grows out of control.
When I started making payments in November 2013, my minimum payments were ~$500 per month. After budgeting, I used any excess money I had to make bulk payments towards my Nelnet loan first. Anytime I got a bonus at work, tax return, side income, etc. I would put it all towards my student loans.
Within the first month and a half of payments, I was able to pay over $1500 towards Nelnet while paying the minimum monthly payments towards Navient and Great Lakes.

2014
2014 was my first full year of student loan payments. In January I was promoted at work, February got my tax return refund, and end of March received a 7.5% salary bonus. During this time, I was able to put down over $6k towards my debt which put me on an accelerated path towards being debt free. Most months after, I continued at a pace of about $600/month, also, a few months of $1500+ bulk payments.
At this time I had a one bedroom apartment in Austin and newly leased truck. Both were high monthly payments and weighed me down financially. In Dec 2014, I discovered mint.com and began tracking all of my transactions more closely.
Related Post: Track Your Finances
I paid off the Nelnet loan in July of 2014. Next was the Navient Loan.
My Navient loan had an interest rate of 7.85%. One of my biggest regrets is not refinancing this high-interest loan. To be honest, I wasn’t aware of my refinancing options at the time, and I paid it off the loan before I knew anything about refinancing. If I were able to get a fixed rate of 5% or less I would have been able to save thousands of dollars over the course of my loan.
For anyone with Student Loans with an interest rate over 4%, I would recommend looking to see if there are better rates by refinancing. I recommend using LENDEDU* to compare rates from 12 Student Loan lending companies. It’s fast, free, and no hard pulls on your credit! Check out my recommendations page for more details.
In 2014, I was able to pay off over $12k in student loan debt.

2015
In 2015, I discovered that there was another method to pay off debt and that is called the avalanche method which focuses on the high-interest debt first. After doing some research and using a great debt comparison calculator (screenshot below), the avalanche method was best for me. I wanted to save the maximum amount of money possible which meant that I would now target the Student Loan accounts that had the highest interest rates. For me, the snowball method was a good way to start, but once I had a system and gained momentum, the avalanche method was the way to go. Luckily for me, my Navient loan was my lowest amount and highest interest rate, so I didn’t have to change anything at the time.

In September of 2015, I traded in my truck and bought a used car. Buying a used car helped me save about $400 a month on my car payments and gas. I also discovered the world of travel hacking in mid-2015. By using travel hacks, I was able to travel more and still prioritize paying off my student loans.
In 2015, I was able to pay off over $16k in student loan debt.


2016
In 2015, my primary focus was paying off my Navient Loan. I ended up paying this loan off in early 2016. After I had paid off Navient, I was able to focus all my money towards paying off my Great Lakes loan.
I realized that my Great Lakes student loan had multiple loans with different interest rates all mixed into one payment. I called up Great Lakes and asked them to help group and separate my loans by interest rates (had to get a manager to help). Now instead of having one big balance, I had five sub-accounts that were now grouped by interest rates.
Having sub-accounts helped with clarity and motivation as I knew how much I needed to pay to pay off my loans by (X) date (using the Debt Reduction Calculator). I was also able to target the higher interest rates first per the Avalanche method.
My interest rates for Great Lakes were from 3.15% to 5.25%. I paid off the higher interest rates within a few months and only had the 3.15% interest rates left by mid-2016.
In 2016, I was starting to learn more and more about personal finance. I was reading books, blog posts, checking my Mint account multiple times a week, and finding ways to optimize my situation.
I was able to save a lot of money by looking at my biggest expenses. In previous years I lived by myself and paid around $1k a month for an apartment. In mid-2016, I moved in with my GF. Moving in with my GF saved over $300 a month. I also cut my $86 a month gym membership and cut the cable as well.
Related Post: Four Areas I Saved $ and Doubled my Student Loan Payments
I was able to pay off over $18.5k in student loan payments while making less income than I did in 2015.


2017
I could finally see the light at the end of the tunnel. 2017 was all about finishing strong. I had a bonus from work delayed a month and a half which delayed my debt payoff projections. Other than that I am very pleased with my progress this year.
I was able to pay off $6k in 3.5 months.

Final Numbers
- After a little over three years (November 2013 to April 2017), I paid off  $55,270 in Student Loan debt
- I paid $5,146 in interest alone (9% of total payment)
- I paid over $50,124 in principal payments (91% of total payment)
- Net Income Ranged between $40k – $44k annually 2014-2016


What I Learned
As you can tell from above, I didn’t have everything figured out at the beginning. I made some costly mistakes early on that costs me thousands of dollars. Not knowing interest was accruing and not refinancing my high-interest loan when I had the chance immediately come to mind.
Although I made some mistakes early on, I learned and improved more and more each year. Below are some key things I learned in the process of paying off my student loans.
Start tracking everything
When I started tracking all my spending on mint.com, I realized how much I was spending on housing, transportation, food, etc. Once I was able to lower my big expenses, it became much easier to make larger payments toward my loans.
Create a Plan to Payoff Debt
If you create a plan, you are more likely to stick to it. Organize your debt and use the data from tracking your spending and plan out your monthly payments. Are you going to pay off the lowest balance first (snowball method) or highest interest (avalanche method)? Use The Debt Reduction Calculator to help plan.
Refinance high-interest debt
If you have high-interest debt and can meet the minimum balances consider refinancing. Federal student loans offer programs like income-based repayment and deferment if you lose your job. However, if you’re planning to pay off your loans ASAP, federal protections are overrated. Do the research and find the best rate possible.
 Play offense and defense
Meaning, don’t only focus on being frugal and saving to pay off debt. You also need to be thinking about increasing your income. There are a ton of ways to make extra money in today’s “sharing economy.” Try starting a side hustle to earn more money to attack debt
Once you have a plan, AUTOMATE!
Automating your payments allows you to “pay yourself first.” You don’t need to worry about finding the money to pay off your debt. It will already be taken care of first.
Don’t forget about investing
In 2013 when I got my first job out of college I didn’t invest into my 401k. I missed out on a year of “free money” because my company offered a 6% match on my 401k. While I recommend to pay off your debt ASAP, you should still be investing. The amount you should invest depends on the total amount of debt owed and the interest rates. See related post – Best Ways to Payoff Your Student Loan
Stay Positive
Talk about your debt free goal with your friends and family. Talking with family and friends will help you stay motivated and accountable. Also, create small goals and celebrate your ‘wins” with your supporters when you reach them. Lastly, don’t compare yourself to your peers. You will see everyone buy new cars, houses, take trips around the world, etc. (i.e., “Keeping up with the Jones’). Let them pass you up. Worry about reaching your goals and ignore the rest.
I can’t believe I am finally Debt Free! It has been a major goal of mine in the last 3+ years. Thank you to the personal finance blogs, friends, and family for all the support!
Question for you:
What are your $ goals this year and what’s your plan to accomplish them?
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Dude! Awesome job man! That’s amazing and really impressive with that type of salary. You’re gonna have so much money now, it’ll be crazy.
Financial Panther recently posted…March 2017 Side Hustle Report – $1,251.91
Thanks, FP! I’m excited to use the same % I was using towards debt to save and invest!
so awesometo hear!! So pumped for your future and the worth you will bring to others!! Heck of a job!!
Thanks so much for your support!
Congrats Gary!!!
You did a phenomenal
job!!! “Live like no one else, so one day you can live like no one else.” -Dave Ramsey
You made sacrifice, worked hard and followed thru with your plans, not everyone can do that. You’re setting a great example and I hope more people follow your lead 🙂
Thank you, Patrice! Looking forward to the Dave Ramsey conference next Saturday!
Congrats on reaching this goal! Very inspiring!! Since college one of our Duke’s has been working to do the same as you. It’s encouraging to see others sacrificing and making it happen!
We put maxing out our retirement accounts before low interest debt, what are your thoughts?
What’s next for you now that you finished the go? A vacation? Haha
If your interest rate on your debt is small (Under 4%), I think it’s fine. The last student loan I had was 3.15% but I wanted to pay it off ASAP bc being debt free was a major goal of mine. I’m sure I could beat that % in the market, but I valued debt freedom and the extra cash flow.
I am headed to Europe (Italy and France) for ten days in May for a vacation. I have my travel fund (in my capital one 360 savings account) that I put money away every two weeks throughout the year, so hopefully ill stay within budget and won’t have to take any $ out of my cashflow.
Financial wise I’m now focused on building my Emergency Fund. I hope to have it filled in the next two months or so, and then I’ll concentrate on maxing out my pre-tax buckets like 401k, HSA, etc.
Thanks for commenting!
Congrats on finishing the student loans off! Have fun on that European vacation. Sounds like you’ve earned it.
Thanks a lot, Kimberly!
That is a ton of debt to eliminate in a short period of time. Congratulations!!
Thanks, Michael! I’m am proud of paying off the debt, but I wish I played “offensive” earlier (make extra money with side hustles, etc.). I could have paid off sooner.
Overall I’m happy with my progress and the good $$ habits I developed.
Thank you for this! It inspired me so much. I am often looking for people who share similar amount of debt and income. Sometimes, I find it hard to relate to people when they make so much more than me and how they paid off their debt much quicker.
Thanks, Khadija! I agree – I find it more relatable to find someone close to my personal situation. Glad you enjoyed the post!
Based on your experience, how to cope with money worries?
Reread my post – It includes a “What I Learned” section. Take action to eliminate debt and you won’t have to “Cope with money worries”.
Hey, thanks for raising this up! What is the best way to finally start saving?
Appreciate you man and Congrats on reaching this goal! By the way, I have pleased to read it. You will get a lot of money from now. Please keep posting more and this is so inspirational.