Balancing It All To Become Debt Free: Ginny's Story
This post is part of the series: Socially Conscious Women on FIRE, which aims to connect the dots between sustainable/mindful living and financial independence.
I pretty much expected to be in debt for the rest of my life.
I graduated in 2011 from a private liberal arts college with a degree in Theatre and over $25,000 in debt. In addition to that, jobs were scarce when I graduated and I was unable to secure one directly out of college. I bounced around from job to job, industry to industry, city to city, making just enough to cover my bills and even save a little before settling in Buffalo in the fall of 2013.
When I moved to Buffalo I didn’t have a steady job but I found work through a temp agency. As is the nature with these jobs, I was never sure as to when they would end so I constantly saved any money I could for the next time I would be unemployed. I lived simply, purchased what I needed, set a budget and stuck to it strictly. I also decided to put three student loans into forbearance for a year to help cut costs. I was lucky to have affordable rent, a roommate to split costs with, own a bike, and live in a small city.
Around this time, I also adopted a Zero Waste Lifestyle. I felt passionate about reducing my waste, but I also knew that aspects of the lifestyle would help save me money in the long run. I focused mostly on using reusable materials instead of disposables as well as reducing waste while shopping. For example, instead of purchasing paper towels and napkins, I switched to using cloth napkins and real towels. A large cost saving came from purchasing a menstrual cup to help cut costs on monthly purchases of tampons/pads. Other great switches are bringing a water bottle everywhere and making cleaners from simple ingredients. I switched to shopping in the Bulk section with cloth bags as well. Items without packaging cost less and you can get as much or as little as you need. In addition to these changes, I purchased second hand items as much as possible and biked as much as I could.
Finally, after 2.5 years of temping, I found a job that could pay me a living wage and they hired me as a full-time employee. While the job was not what I majored in, it used many of the skills I acquired in college. Even though I was finally secure, I was still afraid that I would lose my income at any point like I had many times before, so my strict saving and spending plan did not change. In late 2015 I read something that made me shift gears. It was something along the lines of “your loan interest will always be higher than the interest in your savings account so if you aren’t paying down your debt you are losing money”. That was all I needed. I started to excessively research debt repayment strategies and set my goal to be 2 years away -- at the end of 2017.
The first step I took was to figure out how much I could feasibly pay for loans each month on top of my minimum payment while sustaining my lifestyle and continuing to build my emergency savings fund. I made space for the things that bring me joy like travel, seeing live music, and dining out. I wanted to make sure I was still saving for the future and living in the present, not just paying off the past. So, I set a new budget and put it all in a spreadsheet so that it was easy to track. Once I had this new number, I started to tackle loans one at a time. The first loan I went after was small and had a low interest rate so after 4 years of making minimum payments, I had already made a small dent in it. With my newly “found” money I began making slightly larger than minimum payments on the first loan.
When that was finally paid off, I moved on to the others using the debt avalanche method. To do this, I organized my remaining loans in a spreadsheet by interest rate amount, highest to lowest. I took the amount I had been paying monthly on the first loan and re-allocated it to be an extra payment each month on the loan with the highest interest rate. I also maintained the minimum payment on my other loans. This way I was always paying the same amount total each month. Once that second loan was paid off, I took the combined amount I paid monthly on the first and second loans and re-allocated that to be an extra payment each month on the loan with the next highest interest rate. My plan was to continue with this until all six of my loans were paid in full.
I also made room for some “extras” along the way, some of which increased my monthly payment, some that were large one time payments. Each year when I received my annual raise I would calculate the extra amount I was getting each month and added that to my monthly payment. I also worked multiple jobs in theatre (stage management, bartending, helping run auditions, and sending out theatre gift certificates) throughout the years and put that money directly to my loans. I did this with my tax returns each year as well.
Unfortunately, towards the end of 2017, I realized that I still had more payments left and was not going to reach my goal of December 31st. I was close to reaching it but needed a few more months. I recalculated again and set a new goal for March 2018. Now on February 22, 2018. I am happy to say that I am officially free of student loan debt!
I wrote this in the hope it would help people out who feel stuck and buried under debt. I know that every single person’s situation is different, and that I had a lot of factors in my favor. I recognize I could have paid them off a lot faster if I didn’t travel, see any live music, or go out to eat, but I chose not to put my life entirely on hold, I needed balance. Everyone has different goals and dreams for their life, being free of debt was an incredibly important goal of mine so I put a lot of work and time into achieving it. Whatever your goals are, I hope you do not lose sight of them.
Follow Ginny on Instagram: @zerowastebuffalo as she continues to her FI and Zero Waste Journey.