Imagine graduating from a MBA program and you're now ready to take on the world only to find yourself unemployed.
Sadly, it's not exactly a unique situation. Considering the current work landscape, I like many others found ourselves struggling in our job search efforts after college.
And that's exactly what happened to me, Peter Prokaj, a senior IT business analyst based in Jacksonville, Florida. I studied business at the University of Central Florida in Orlando and got both a Bachelor's and an MBA when I graduated back in 2009. The loans for both my undergraduate and MBA set me back about $30,000.
Of course, this was during the height of the recession, so I couldn't really find any job prospects except for sales positions which wasn't exactly what I was hoping for.
Instead, I decided to spend a month Slovakia where I was born and stayed with family. I eventually made my way back to the U.S. and landed a job in Jacksonville, Florida as a operations analyst at an investment bank.
When I finally started my first job, I didn't really think about the loan. That's because my dad was helping me pay the bare minimum on my student loan payments. I admit that it didn't weigh heavily on my mind initially because someone was helping me out.
I did manage to save some money after my first year of work so that's when I decided to start making minimum payments so my dad didn't have to.
Getting More Serious
I was still making the minimum payments when I met my now wife Ruby. I knew that these student loans were important but it didn't feel as important to me until I mentioned I still had student loan debt (and the needle on the loan hadn't moved that much). I started taking it more seriously when Ruby half-joked that she wouldn't marry me if I still had loans on our wedding day.
With a lot of hard work, I paid his last loan payment on December 21, 2015, which was the best Christmas gift ever. I remember feeling how proud I was that I was able to send the confirmation of the last loan payment to my dad, that I was free and no longer needing to worry about the debt anymore.
How Peter Paid Off His Student Loan Debt (And You Can Too)
I feel really lucky that I had help and support, but it still took work to pay off that large of an amount of debt.
Here's how I did it:
1. Have an Eagle Eye Focus
When I began taking my student loans a lot more seriously was when I began to see a lot more progress. It became my mission to pay down the debt. And to be honest, when you have that much to pay off, debt repayment needs to be a serious focus if you want to make progress.
I figured out how I was going to save a lot more money so that I could make more than just the minimum payments. I decided that this student loan debt was going to be my main focus for the next few years.
As for my why, I credit my wife being the catalyst for all of this. I know that if she wasn't there to motivate and encourage me I wouldn't have been as aggressive in paying it off.
The lesson here is that even when making debt repayment your main focus, you'll need support and guidance along the way. I was lucky my dad and wife helped. Even if you're single, you can always look to friends and family for support. These people can be your sounding board or even help you with solid advice.
2. Frugality FTW
When I decided to save more money, I decided to adopt a frugal lifestyle in order to do so. I didn't have a side hustle to earn more money, so I relied on my current salary in order to tackle the debt.
I took at look at my current financial behaviors and decided to stop eating out. I no longer went out for nice dinners and brunches on Sundays. I also loved going to the movies but stopped that while paying down the debt. Whenever I needed to buy clothes, I made sure to never pay full price.
In general, he committed to a much more frugal lifestyle.
If you have large amounts of debt to pay off, you don't need to become a super frugal person.
If you cut yourself off from all the luxuries you enjoy now, you may rebel and not make any progress at all. Instead, you can start cutting back slowly and see what you can eliminate altogether or just cut back a little.
Yes, I did cut out dining and movies, but I didn't totally deprive himself. I did cut back on clothes shopping but didn't eliminate it altogether. In other words, you can still enjoy your money even though you're paying down debt.
Perhaps the biggest lesson I learned throughout my debt repayment journey is that gratitude is key. I was so grateful for the moral support and that I had a steady paycheck so that I could pay off the debt in the first place. I also didn't attribute it to one main tactic or another for helping me become debt-free. Rather, it was a combination of factors. I feel so lucky that my father helped with some of the payments and Ruby pushed me on.
If you think it about it though, those things were just the catalyst. I never took what I had for granted and worked hard to pay off my debt. I wasnt really a big spender in the first place but my wife helped to shift my mindset on saving more than I ever thought possible, eventually helping me becoming debt-free.
Sounds cheesy, but if you can find ways to be grateful, rally support and be super focused, then you can pay off debt as well. No matter how impossible it may seem.
Resource for Paying Off Student Loans
When it comes to paying down student loans, sometimes it's important to take advantage of the resources around you.
If you have private student loans or aren't considering the Public Service Loan Forgiveness, you may want to refinance your student loans. There's so much competition in that space that you can get paid a few hundred dollars to refinance – on top of lower rates and a simpler debt repaying process.
You should also look to the stories of others to help give you motivation. One of the most popular stories on Wallet Hacks is by Chris Peach of Money Peach. He wrote our epic debt guide by sharing how he paid off $52,055.15 in credit card debt. How incredible is that?