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- Like many Americans, I graduated college with tens of thousands in student loan debt.
- My monthly $600 payment was drowning me, even when I made spending cuts and got a lower interest rate.
- Moving to Korea to teach English finally made the difference because my cost of living dropped.
When I graduated from a small university in 2009, I was immediately saddled with $60,000 in student loans and working a job that paid me just $25,000 a year.
I was paying three separate loan servicers a combined $600 a month — far more than I was paying for rent and my car combined. I constantly felt like I was drowning financially. I had no real disposable income and hated money because it felt like I never had any.
Eventually, I was putting expenses on my credit cards just to keep up with my loan payments and make ends meet. It seemed like my 20-year payoff date was never going to come.
But by making some drastic changes in how I approached my life and my money, I was able to pay off all my student loans nine years ahead of schedule. Here’s how I did it.
I put my loans on autopilot and lowered my interest rates
After my six-month grace period, all three of my lenders offered a 0.25% break on my interest rates just for setting up automatic draft payments. I was able to work with each company and chose payment dates that worked with my salary direct deposits so I wouldn’t accidentally overdraw my checking account.
This turned out to be a massive boon: Some of my federal loans’ interest rates were only 0.25% while I was paying them. By setting up the auto-debit, getting that 0.25% interest rate discount meant I was paying zero interest on some loans., This allowed me to save a little money in the long run and pay them down faster.
I drastically cut my expenses
When your student loan payments are $600 a month and you’re only making $25,000-30,000 a year, there’s not much left for rent, insurance, and other everyday living expenses.
So, I was frugal. With the exception of one year when I was living in Colorado, I lived with roommates. I cooked meals at home. I took my lunch to work, even when I was doing door-to-door sales for a telecom company and my car was my office.
Moving to Portland, Oregon, in 2011 was the straw that finally broke the camel’s back. Cutting my expenses, living with roommates, and being extra careful of how much gas I was pumping into my car each week wasn’t enough. I could barely afford the basics and had to put some of my loans into forbearance for a year.
To get back on my payment schedule, I made a dramatic life change.
I moved abroad to live more affordably
This was the single most-defining decision that allowed me to pay off my loans nearly a decade ahead of schedule.
In 2013, I moved to South Korea to teach English. After eight years of teaching, I paid off my last loan.
Living in Korea has helped me lower my cost of living exponentially: My Korean employer pays my rent and I can walk to work every day. I take public transportation and as a foreigner in Korea, I benefit from a much lower tax rate than I was paying in the US.
I hustled in my off-hours
To earn more money, I took extra jobs working nights and weekends in retail stores.
When my teaching job needed someone to cover extra classes, I offered to help and pulled in some overtime pay.
In 2015, I took a paid internship with a college acquaintance who was running her own content marketing business. After the internship ended, I stayed on working part-time. When my boss decided to return to the workforce and leave entrepreneurship, I ventured off on my own and now run my own freelance writing business.
I still made a point to enjoy myself
In the early years of my loan repayment plan, I learned to restrict myself a lot. I made mistakes early on and built up a lot of credit card debt, making my situation feel all the more dire. Eventually, I cut back on a lot of “fun” spending. It was depressing and made me feel all the more trapped by my financial circumstances.
But after moving to Korea, I had a little more disposable income and made a point to enjoy life. I was never so restrictive that I didn’t spend time going out with friends for dinner, drinks, or coffee. Moving to Asia has opened up a whole new side of the world, and I’ve traveled extensively.
I learned early on in adulthood that I don’t need a lot to be happy. Those first years after college were rough and I cried a lot of stress-induced tears, but the lessons I learned about managing my finances have been invaluable.
I’m proud and humbled to finally be living debt-free. It’s given me immeasurable peace of mind and the freedom to live comfortably.