How I paid off my student loan within one year of graduation!!!
Why did I have to get a Student Loan?
In 2019 I decided I wanted to go to Ivey Business School in Canada for my master’s program or nothing else, even with persuasion from my dad to take another competing offer in the US. I said nope, this is what I want! And my dad said, create a plan and show me how you plan to afford this.
So I created a plan on how we (me + my parents) were going to afford Ivey, which was way out of my parent’s budget. The school fees then was about $65k and I had $10k in scholarship, so I needed to come up with $55k. Unfortunately, this plan involved getting a student loan! Also, remember from my about me post, I do not like any form of debt!!!
Ps: I planned on getting a $25k student loan and I ended up getting a $16k loan because my parents were able to pay more than they planned. Also, I worked while in school so I paid for some of it!
Let's get to the deets on how I actually paid it off…
Have a Plan to Pay Back Your Student Loan on Time!
Once I realized I was going to have to get a student loan, I planned to pay it back as soon as possible. I hated debt for one and I didn't want to have anything holding me back from achieving my financial goals. As a result, I created the initial payment plan before my loan was ever approved.
Exhibit 1: My initial payment plan
Stick to It (Even if it means adjusting it so you can stick to it)!
You can see my initial plan above, but I had to adjust it based on my actual income post-graduation and my cost of living at that time (I’m a full supporter of living below your means). However, I stuck to my plan! Just because I was earning money now and doing adult things (which is the ghetto) I didn't forget that I wanted to pay this ASAP. Life and its issues may get in the way sometimes, which is why you should be ready to adjust, but do not forget your why. Discipline and dedication are key here, otherwise, it's easier to pay the minimum balance, which leads me to the next point…
Saving and Budgeting
Discipline and dedication also come in here STRONGLY!
I started paying back my principal before the 6 months grace period after graduation was over. I saved and still save more than 50% of my income on average so I was paying back huge amounts every month. What helped me save this much was my budget! My budget is so extensive! I want to see all the details of what I'm spending on, sometimes I get caught up, but hey it works for me! Find what works for you!
Have a Good Support System
I appreciate my Dad for constantly checking up on my student loan progress, he usually chipped it in our conversations. He was going to keep me accountable even if I didn't want to focus on it or when i got overwhelmed. Sometimes we do not realize how important these support systems are. Whenever I told my parents how much I had paid back, their encouragement always motivated me to remain consistent. Towards the end I also joined Reni’s accountability group, which was also a great motivator to pay it off!!!