If you told me two years ago that I'd be able to afford to leave my student affairs job, I would have never believed you. And if you told me that I would leave without another job lined up, I probably would have laughed in your face. But a shift in money mindset made the impossible, possible for me.
Six short months after completing my masters program, I set a goal to pay off my $20K in student loan debt in one year. Instead, I crushed my goal in 10 months and it changed my life forever. While it wasn't easy, it put me in the position to boss up in more ways than one, including leaving my 9 to 5 sooner than expected.
1 | I Learned How Much Money I Actually Need To Survive
Prior to tackling my debt, I spent my money frivolously. I treated myself to anything that my heart desired because I felt like I deserved it (to be fair, I did). But when I committed to paying off my loans, I knew I would have to make some changes. As a Resident Director, I took advantage of my free-housing and started making smarter decisions with my money.
After crunching the numbers, I realized I needed to pay a whopping $1.7K per month to pay off $20K in 12 months. That’s a whole mortgage (and some)! I made about $2.5K a month. That’s nearly 70% of my monthly income. Whew!
I put myself on a strict (but realistic) budget that included my bills and limited funds for a few of my favorite small luxuries to maintain my sanity (e.g. mani/pedi, lunch dates with colleagues, and occasional happy hours). I needed a total of $800 a month to survive.
2 | Having Multiple Streams of Income is KEY
It didn’t take long to start thinking of ways to reach my goal sooner (I can be an over-achiever). I refused to work a second job with a bachelors and masters degree (your girl had too much pride). So, I started my own resume writing business in June 2018.
In the first quarter I averaged $400 of revenue each month. I transferred every penny to my savings account to put towards my loans. That’s how I cut my timeline down by 2 months. Amen? Amen!
3 | Money Mindset Is a Major Game Changer
At first I had severe FOMO (fear of missing out). I turned down invitations to any outings that weren’t included of my budget. I got laser-focused. I cut things out that didn’t align with my goals. I stuck to my plan and I was consistent. Eventually, I grew to appreciate my low-budget lifestyle.
Once I saw those digits dropping from my debt, I stopped perceiving my loan payments as a compromise and sacrifice. I realized that I wasn’t missing out on anything. I was simply prioritizing my need and desire for financial freedom.
That year, I gave myself the best birthday present when I made my final student loan payment - leaving my debt total at ZERO!
4 | Financial Discipline Gives You Freedom To Move On Your Own Terms
It’s been 18 months since I paid off my student loans. After hitting that milestone, I knew I could do anything. So, when I realized I wanted to leave Student Affairs in August, my first instinct was to start saving to support myself through my transition. If I could pay off $20K in 10 months, I could save enough to leave my 9 to 5 without feeling the need to jump into any job just to make ends meet and survive.
I started off by saving 20% of each paycheck. Then I calculated my annual leave pay out ($$$) for projected savings. When I filed my taxes, I saved my refund. When the pandemic hit and stay-at home orders went into effect, I tripled my savings. When I received my stimulus check, I saved that too. And as controversial as it is, I’m cashing out on my retirement savings when I leave in May.
5 | Budgeting + Saving Provides Safety and Security
As crazy as it sounds, I’m not experiencing anxiety around my future despite all the uncertainty in the world. I’m leaving my student affairs job in less than a month and I cannot wait to take the leap. I saved enough to cover my life expenses for 9 months and I have no doubts that I’m only going up from here.
Trust me, managing your money can take you places you never imagined.
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