• Home
  • About
  • Recommended Reading
  • Disclaimer
  • Privacy Policy
  • Advertise / Contact

Invest It Wisely

Maximizing your EV in life

  • Home
  • Growing Your Wealth
  • Small Business Solutions
  • Healthy Living
  • Miscellaneous

How to Get Out of Student Debt

By Guest

The following is a guest post from Marissa at Thirty Six Months where she talks about getting rid of her student debt and becoming financially independent.

English: Student

Image via Wikipedia

It is very unusual to find a graduate student in their 20’s these days without a mountain of debt, regardless of whether they worked through university or not. I am one of those graduate students.

Part of the reason for my debt is over-spending, a lot of over-spending. The other part is being negligent with my finances while I was in school.

I am currently in debt approximately $18,000, all of which are student and personal loans. I graduated with $31,000 of debt. My net worth is a different amount. I am from the school of thought where saving is also a priority along with paying off debt.

Why I was given a student loan when I made as much as I did was beyond me, but I clearly did not have my head on straight when I was younger. The last year and a half has consisted of me attempting to bring that down as much as possible without going to the extreme.

My work involves a lot of travelling, and luckily most of my travel expenses are covered by my employer. This helps a lot because I am attempting to limit my expenses. I do have my vices: watches, shoes, and Starbucks, but I have attempted to modify my mentality towards those as well.

Things that I am doing differently to accelerate my debt repayment:


Creating a budget. I know this is not rocket science but I had never created one. I just spent the money that I had access to.

Cutting on optional expenses. This includes my gym membership – I have a treadmill, and free weights at home and I play soccer twice a week. Optional expenses also means reducing the amount of times I eat. This is harder than it sounds since I commute for work and usually have after work meetings with my clients in a different city.

Shopping around for big expenditures. Things like car insurance, banks, work equipment, vacations. I used to spend $200-$300 on jeans alone without thinking twice about it. Oh how I wish I hadn’t done that.

Take on side projects for extra income. I started doing web-design and I do project consulting work for a few friends which has now snowballed into something bigger and I need to take on additional staff to handle the side work. I find that this is the key. You can only cut down on expenses so much, to accelerate the process you need to bring in extra income. There are a lot of resources out there for finding side income.

Things that I have prioritized along with debt repayment:

Creating an Emergency Fund. I know the goal is to pay off debt as soon as possible, but I like the security that an emergency fund provides. Credit lines don’t come close to this. I have been preaching about emergency funds to everyone. You never where life takes you or when you decide to quit your job and venture on the path of self-employment, or even better – travel for a few months. An emergency fund can cover any unexpected fees outside of what you budgeted for.

[Kevin] In spite of a controversial post where I suggested that using a credit card was better than using an emergency fund (or something along those lines), I pretty much agree with Marissa here. A pot of cash on the side is just another bucket of savings that gives you additional flexibility and freedom.

Stick to my budget. Creating a budget is easy; sticking with it is the hard part. We all think we can cut out shopping and eating out but the reality is that it takes a huge lifestyle shift to do that. I attempted to cut eating out all together, went out a few times, became very disappointed and nearly gave up on my budget. I think it is imperative to modify and adjust your budget to your needs and lifestyle. After all, if paying down debt is your priority then you will do what you have to do. I now include a set savings amount for a car fund, insurance fund as well. This avoids surprises latter.

Continue saving for travel. I love travelling. It is one of my passions. I love being lost in a foreign land and discovering things that tourists will never see. I live for those adventures. So when I started my journey towards financial freedom I had a choice to make: did I want to give up something that has always been a priority to eliminate my debt, or could I simply reduce the number of trips and still use them as a treat? I chose the latter and I am very happy with it. Oddly enough, I have become extremely frugal when travelling these days. I hunt for deals, find trips to off beaten paths and usually involve multiple people so we all share the expenses.

Investing. This is something I should have paid attention to a few years ago, but I am monitoring my investments and retirement portfolio closely now. My employer matches 50% of any investments in the company stock. I would have been stupid not to take advantage of this, they always allow paycheck withdrawals for RRSPs. I partake in both, but I am not actively managing the latter since it contains index funds.

I also opened up an e-Series account and an online brokerage and am slowly becoming actively involved in that as well. I don’t always know what the right call is, I like the idea that with enough research and common sense, you generally can make the right decision. A side note to this – women need to pay more attention to where their money is being invested.

There is no clear path to becoming debt free instantly; it is a mental shift. I am a lot more conscious of my decisions and being aware of my financial situation has allowed me a clarity that I value. If becoming debt free is important to you, then making the right personal and professional choices becomes rather simple.


This was a guest post from Marissa at Thirty Six Months where she talks about getting rid of her student debt and becoming financially independent.

Related Posts Plugin for WordPress, Blogger...

Filed Under: Growing Your Wealth, Investing, Miscellaneous, Paying Down Debt, Philosophy, Saving Your Money, Stories

About Guest

Comments

  1. DebtEye says

    December 23, 2011 at 3:48 pm

    Marissa,

    What about the different repayment options for people struggling with student loan debts, such as income based repayment plans?

  2. World of Finance says

    December 25, 2011 at 8:45 pm

    Having a healthy emergency fund can definitely give you more options in life. Nice article 🙂

  3. DenverEric says

    December 27, 2011 at 12:42 pm

    I can totally relate. I took out $40,000 in student loans during my MBA and have less than $7,000 to go after just under 2 years. I hope to be paid off completely in 2012.

  4. ayurveda says

    December 29, 2011 at 2:53 am

    Best way is to combining multiple student loans to enable only one monthly payment as opposed to two or more. This is a great option that provides help for managing finances.

  5. buckinspire says

    December 31, 2011 at 2:17 am

    Great tips and I like how you manage your passion for traveling! Nice attitude toward investing. I wish I started earlier, but better late than never!

  6. InvestItWisely says

    December 31, 2011 at 1:35 pm

    Thanks for the great guest post, Marissa! 🙂 @thirtysixmonths

  7. Penny Stock Blog says

    January 31, 2012 at 8:01 pm

    I would like to comment about the value of a college degree. Most persons go about this the wrong way instead of going to college and specializing in some kind of tech field or something else and than go out and get a decent job in their field of expertise that pays far more than wallgreens for example you do not have to have a four year degree to get a really good job that is if you go into the right field. Than use the generous benifits package that the company offers and this most likly includes paying for part of your continuing education. Also never count out wallgreens or kmart or really any large company because they may have a job in the field you are in even wallgreens has personal involved in web design or computer science.. Also if you start working in the speciality field before you leave college you will be in the sweet spot compared to your counter parts that are not.

Trackbacks

  1. Weekend Ramblings & PF Blog Love: Twas the Night Before Christmas Edition | youngandthrifty.ca says:
    December 23, 2011 at 11:22 am

    […] it Wisely has a great guest post about getting out of student debt (very relevant for me right now as I’m trying to avoid this at all […]

  2. Link Love Christmas Eve Edition says:
    December 24, 2011 at 5:04 am

    […] How to get out student debt- Invest It Wisely. […]

  3. Operation: Clean the House is Underway says:
    December 24, 2011 at 12:04 pm

    […] How to Get Out of Student Debt via Invest It Wisely […]

  4. Weekly Blog Round: Merry Christmas! « The Passive Income Earner says:
    December 24, 2011 at 4:41 pm

    […] Invest It Wisely with ‘How to Get Out of Student Debt‘ […]

  5. Best Articles this Week from Financial Blogs | Personal Investment Management and Financial Planning says:
    December 29, 2011 at 11:04 pm

    […] presents How to Get Out of Student Loan Debt posted at Invest It Wisely, saying, “There is no clear path to becoming debt free instantly; […]

  6. Canadian Finance Carnival #69 – Canadian Finance Blog says:
    January 2, 2012 at 2:10 am

    […] at Invest It Wisely presents How to Get Out of Student Loan Debt, saying “There is no clear path to becoming debt free instantly; it is a mental shift. I am a […]

  7. Totally Money Carnival; First Foot into 2012 | Help Me To Save says:
    January 2, 2012 at 2:20 am

    […] presents How to Get Out of Student Loan Debt posted at Invest It Wisely. There is no clear path to becoming debt free instantly; it is a mental […]

  8. Link Love: Holiday Edition | World of Finance says:
    January 2, 2012 at 5:39 pm

    […] it was your New Years Resolution to get out of student debt, then you should definitely read How to Get Out of Student Debt at Invest it […]

  9. An Archive of the Lost Comments from Guest Commentators | Invest It Wisely says:
    February 27, 2012 at 2:15 pm

    […] How to Get Out of Student Debt […]

  10. The Carnival of Financial Camaraderie #14 - My University Money says:
    March 26, 2012 at 6:27 pm

    […] […]

  11. The Carnival of Financial Camaraderie #14 - My University Money says:
    May 6, 2012 at 12:32 pm

    […] presents How to Get Out of Student Loan Debt posted at Invest It Wisely, saying, There is no clear path to becoming debt free instantly; it is a […]

  12. Three Qualified Reasons to Delay Paying Student Loans | Invest It Wisely says:
    November 2, 2012 at 10:57 am

    […] You are facing economic hardship. If you are currently paying your student loans but find yourself affected by unemployment or lack of full-time employment, you may qualify for […]

About Invest It Wisely

Invest It Wisely is about evaluating the choices that each of us face everyday. It’s about investing your time, your money, and your energy wisely, in order to achieve your goals. The end goal is maximizing your life expectation, and exploring the ways to get there.

Subscribe!

Subscribe via RSSSubscribe via EmailSubscribe via TwitterSubscribe via Facebook

Most Popular Posts

  • How to Get Fit, Feel Better, and Get Rid of Your Foggy Head: A Few Simple Steps
  • 3 Frugal Ideas for a Romantic Valentine’s Day
  • What Would You Do with a Million Dollars?
  • The Importance of Opportunity Costs, and Why They Should Not Be Ignored
  • What Do You Need to Get out of the Rat Race and Achieve Financial Freedom?

Categories

  • Avoiding Scams
  • Book Reviews
  • Crypto Trading
  • Currency Trading
  • Economics
  • Financial Freedom
  • General Reviews
  • Growing Your Wealth
  • Healthy Living
  • Insurance
  • Interviews
  • Investing
  • Investing
  • Market Analysis
  • Miscellaneous
  • Motivation
  • Opinion
  • Paying Down Debt
  • Philosophy
  • Precious Metals
  • Reader Questions
  • Real Estate
  • Relationships
  • Saving Your Money
  • Small Business Solutions
  • Stories
  • Uncategorized
  • Weekend Reading

Archives

Invest It Wisely Copyright © 2016
Creative Commons License
This work by Invest It Wisely is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License
Permissions beyond the scope of this license may be available at http://www.investitwisely.com/contact