Seven months ago, I had $14,000 in debt. Today, the number is zero. When I graduated from college one year ago, I knew that I wanted my debt gone as soon as possible. I never wanted to feel trapped in a particular job, location or relationship. Instead, I wanted complete freedom and I knew that loan repayment was the first step.
So I set a goal: pay off $14,000 of student loans in one year. (I ended up doing it in 7 months!)
Even though $14,000 is smaller than the national average of $35,000, it felt big, especially with my entry-level salary. In order to find the money in my budget, make monthly payments of $2,000 and still pay rent, I had to get creative. Here’s a breakdown of how I saved $5,500 (the yearly Roth IRA maximum contribution) of my $14,000 total.
1. I Sold My Car
When I got serious about paying off my debt, I knew I needed to get serious about my transportation costs. My 2000 VW Cabrio was a junker that barely functioned, but it still got me to work each day. But I knew that I wanted debt freedom more than convenience, so I sold it for $700 to a junkyard (Yep, that’s how bad of shape it was in…) and entered a new reality: car-free existence.
Instead of driving to work, I started Ubering, catching the bus and even biking the eight miles to my office. Some days I arrived covered in sweat from my bike ride or late because of a slow bus driver, but other days I arrived feeling strong, capable and self-sufficient.
I learned to bike massive San Diego hills, coast next to cars and navigate the trolley system like a pro. But more importantly, I learned that when I was pushed to my limits (and beyond), I actually survived. While I tested my physical and mental limits, I also watched my transportation costs drop from nearly $500 per month (the average of car repairs, insurance, gas and parking) to $70.
Savings Over 7 Months: $3,010
2. I Got a Roommate
When I was in college at UCLA, I lived in a one-bedroom apartment with two other girls. On any given week there were dirty dishes, disgusting toilets, passed out strangers and absolutely no personal space. When I moved to San Diego, California for my first full-time job after graduation, I wasn’t eager to repeat that situation (at all…). However, rent prices in Southern California are notoriously expensive and I knew that I needed to save money. My partner stayed in Los Angeles to finish school, so I knew that I needed to find someone to live with. Instead of living with strangers, I opted to move in with my sister. She’s my one of my favorite people in the world; she’s clean, awesome and not at all deranged. (All of which were massive improvements from my last roommates.)
We moved into an adorable two-bedroom two-bathroom apartment in one of the safest neighborhoods in the city and it’s been great. My rent is high, but still affordable at $900 per month. If I had opted for my own one-bedroom apartment, I would have been paying upwards of $1,200. But even better than saving the money, I love living with my sis. It’s the ultimate win-win.
Savings Over 7 Months: $2,100
3. I Stopped Buying Lunches (For Real)
I’ve always prided myself on my frugality and depending on whom you ask, I may even be considered “extreme” about it. But there was one area that snuck up on me: lunches out.
Most days I would pack my lunch, but during college, I would often have 12-13 hours day. The day would begin with a few hours at my magazine internship. After that, I would head to one or two classes and then end the day with a six-hour shift at my part-time campus job. It was a bit brutal and there were days that I ended up STARVING. With no access to microwaves or refrigerators throughout the day, my lunch options felt limited, so I would often accidentally pack less than I needed. But even worse than that, I would sometimes forget my reusable water bottle and end up buying bottled water as well.
Although the expense wasn’t huge, it still set me back at least $15 a week. Once I graduated and started working 8 hours instead of 12, I got serious about my food preparation, bought a reusable water bottle to keep at the office and stopped buying food during the day.
Savings Over 7 Months: $420
Total Savings Over 7 Months: $5,530
All in all, I was able to save a little over a year’s worth of Roth IRA contributions (and nearly 40% of my overall debt!).
As the 7 months came to a close and I made my final payment, I felt a wave of relief. But more importantly, I felt free.