The unexpected upside of student loan debt
NEW YORK — I’ve never been more excited about my student loan debt.
Five years after graduating, I have roughly $13,000 and 31 months to go until I’m no longer paying for my journalism degree, and I am pumped. This is, understandably, not a normal emotional response to thousands of dollars of debt, so let me explain.
I recently — as in Sunday night around 7:50 p.m. — paid the remaining $1,117 on one of my six student loans using part of my tax refund. I felt elated. I wanted to scream, in a “Hey, look what I did,” way, not an, “I’m dying a slow death by Navient,” way.
One down, five to go. “Boom,” I thought, “I’ve got this.” The end is in sight. All because of tax season and obsessive financial planning.
The unexpected upside of graduating with $25,000 in student loan debt is the financial responsibility it forces on your life. I have to take control of every dollar I spend and know exactly where it’s going. I have to say no to dinners out with friends, Friday night drinks and other general fun a lot more often than I can say yes. I stare perplexed at the photos from exotic vacations and Euro trips so many of my Facebook friends seem to take every year — or as is so much more common once you pass age 25, the flood of shiny, diamond-clad fingers waving through my newsfeed — wondering how exactly these people have that kind of extra cash (or maybe it’s their parents who do).
To be fair, I graduated with what is generally considered a manageable amount of student loan debt. It hasn’t hindered my day-to-day life or relegated me to living off of Annie’s Mac and Cheese.
Still, month by month, as I’ve worked to pay off my four years of college, I’ve learned to set specific goals and felt the thrill of achieving them (I paid another loan off with my tax refund in 2014). I’ve learned to track my budget with the same commitment and fervor required of purchasing Adele concert tickets or standing in line for a cronut. And I admit, I actually enjoy it. Having control of your money, even when you have negative net worth, is oddly freeing.
Yes, my student loans have held me back — from saving, investing and having the freedom not to worry about overdrawing my checking account. But I’ve also gained an awareness of my financial life that will stick with me long after my loans are done dragging me down, an appreciation of the power of liquidity and credit scores and emergency savings that will come in handy when I have far bigger goals in my sights than being able to go to the movies and splurge on fake-buttered, overpriced popcorn. (Seriously, when did popcorn start costing $1 a kernel?)
This hyper-awareness of money has already bled into other aspects of my life. When the lease was up on my car earlier this year and I turned it back into the dealership — a decision I’d agonized over for days, part of me not wanting to give up the convenience of having my own wheels, and the other part thinking I was ridiculous for paying hundreds of dollars a month on something I used once a week to buy groceries — I couldn’t wait to reallocate all the money I had been paying toward the car. I would double down on my student loan payments, increase my monthly savings auto debit and let myself boost my restaurant budget.
These are the little wins I look forward to. They are small changes, and slow to come, but each one brings me closer to living debt-free.
So I’m still trudging along, day by day, neurotically checking my LearnVest account and weighing whether to go out for coffee this weekend. I know my diligence is worth it — as of today, my spreadsheet tells me I have six months to go until my next loan is paid off.
How to successfully be in debt:
• Don’t just set goals, visualize them. Thinking about wanting to do something is a lot different than seeing it happen. Use a budgeting app that lets you set specific financial goals or customize an Excel spreadsheet in order to see exactly how long it will take you to reach your savings target or pay off a loan or credit card. It makes the goal much more tangible and gives you something to check in on every month as you make progress.
• Set up an automatic savings deduction. Even if it’s only $10 a month, make it automatic and then you never have to think about it. Emergencies will happen — I’ve had two that cost thousands of dollars each in the past five years. Don’t add insult to injury by maxing out a credit card, on top of student loans, when they do.
• Don’t be afraid to say no. I have no qualms about telling my friends I can’t afford to do something, and doing so sets clear expectations about your priorities. Nearly seven in 10 students graduate with debt, and we shouldn’t be ashamed of talking about it or learning from each other on how to handle it.