I belong to the group of millennials that graduated college with student loan debt, about $35K to be exact. I thought well I’ll pick the pay as you earn plan and in 10-15 years it’ll be paid off. But as time kept going and the interest kept creeping in. I got fed up and decided it was time to get serious and pay off the loan. I also realized that it’s stopping me from pursuing my traveling dreams. It’s hard to think about taking off for a long-term trip with that big payment in the background. This is my journey to paying off $30K of debt before 2017 is over. I have already paid $5K over the course of 2 years. The $5K was interest acquired while I was in school.
The plan is as follows : Move back into my parents house ( which they were nice enough to let me) and rent out the three bedrooms in my townhouse to pay for all my expenses. The decision to move back home was not easy, since I was used to living alone (well with roommates) and used to not having to drive as far. My parents live about an hour away from the city so I think this is what made the move harder. But sometimes you have to make sacrifices to get to where you want to go. In this case, paying off my debt so that I can travel long term.
The idea is that the rental income pays for my expenses (mortgage, HOA, house bills, gas, food) and my income would go towards student loan payments. I have a total of 8 different loans ranging from $700- $7K all of which have an interest rate of 6.8%.This is pretty high considering its $30K growing at 6.8%. The goal is to pay off one by one starting with the smallest loan. Once the smallest ones are paid off, then I will start saving up until I have the exact amount of the bigger loans to pay them off. If everything goes as planned I should be student loan debt free by the end of 2017. Now to have a safety net I will keep $3K of emergency funds in my savings account, this just makes me feel better. It scares me when there are no savings, you never know what could happen. With this being said let the journey begin!
