If you have never had to deal with 6 figures of student loan debt then I will be honest… I sort of envy you.
I can tell you from marrying someone with student loan debt, that learning how to make sacrifices in order to payoff student loans can be challenging.
No sugar coating, but if your goal is to knock out a small amount or a large amount of student loans, or some other form of debt, you will have to sacrifice something.
And that sacrifice for you- may be different then Lauren and I.
For starters, less then 5% of people with student loan debt have $100,000 or more. So I get it, most likely your situation is not as extreme as ours (I do see that number going up in the near future with the costs of college steadily increasing).
But learning to sacrifice or delay the good is actually something you should do whether you have $1,000 worth of student loan debt or $100,000. Delayed gratification is how you get ahead financially.
Finances are 100% BEHAVIOR
If we never learned to delay our gratification…
I could only imagine how different our life would be three years later had we not learned to start delaying the good for the great. Considering Lauren and I started with over $300,000 in student loan debt and currently our remaining balance is right around $150,000…I think we have done a good job over the last 2.5 years.
However, the one thing we really did to make this happen is we delayed and said no… all the time.
Now it might seem hard to say no to vacations, trips, entertainment, new things, nice cars and you name it. But honestly, if you have a reason that is clear – it really isn’t that bad.
That being said, we often get the question, “How did you do it???” Well here is how we paid off $57,000 in student loans in 2017, over $40,000 already in 2018 and how we continue to pay an average of 4-5K per month towards student loans.
We made sacrifices!
These are just some of the sacrifices we have made.
8 Sacrifices to Payoff Student Loan Debt
In 2015 we went to the Outter Banks with 6 friends and we got engaged. Since that summer we haven’t hit the sand, not even for a honeymoon.
While this might seem crazy not to take the annual one week beach trip, we will ultimately miss out on 4 trips since our goal is to be student loan debt free by the end of 2019.
After that, our new goal is to take 1 4-5 day trip a month for 12 months. So is delaying for 4 years worth taking 12 trips in 2020? You bet!
Consider taking your travel money and investing, saving, paying off consumer debt or something of that nature for 2-4 years. Come up with day trips or cheap over night excursions in the mean time.
If you really need to travel – get really good at travel hacking so you can travel for free.
To get ahead financially the simplest concept is pay yourself first. Take your income, subtract your bills. The left over amount is essentially discretionary income.
Most of the time that discretionary income becomes spending money. Instead, put it towards financial goals FIRST, then pay bills, then spend.
Among millennials, one of the highest spending categories is nights out or entertainment. Uber, dinner, drinks and an event can exceed $100 for a single, $200 for a couple if you are not careful.
Since entertainment budgets are discretionary, have a set amount to spend each month and don’t exceed it!
Ok this is a hot topic for the millennial generation- when to have kids. With more emphasis on education, careers, the fact that most millennials have student loans, more and more people born after 1984 are delaying on kids.
We have delayed on kids too. Conventional wisdom- you can never be ready for kids – is just that, conventional. That is general wisdom.
Paying off $300,000 in student loans in 4-5 year is not conventional. So therefore, in order to accomplish this we have had to do some unconventional things like delaying on kids.
No doubt – this is the hardest to delay for. BUT it also keeps us motivated. You can be in a better financial position when you have kids. It is never perfect, but it can be planned.
4. Weddings & Bachelor/Bachelorette Parties
Another tough one to delay on – weddings and bachelor parties.
The last bachelor party I went costed over $1,000. The flight alone was $300. Throw in entertainment, hotel stays, food and it adds up quickly.
Today.com had a great piece about how bachelor parties are standing in the way of home ownership. Basically, taking 9 bachelor party destination trips puts you in the neighborhood of spending $14,000. AKA a home down payment.
So while they are extremely fun, saying YES to every destination wedding or bachelor/bachelorette is something to reconsider if you have some financial goals.
5. Sporting Events
Admittedly, I am a huge college football fan. I used to hold season tickets right after college for West Virginia football games.
However, 7 home games and about $2500 later in travel, tickets, food, gas, I realized making the every other week trip was costly. So for the last few years we have only gone to one game, if any.
I really enjoy going to MLB games as well, but it also something I have put on hold. If you do plan on going to sporting events, have a planned out strategy.
Go on nights when they have promotions. Or see if you can even get free tickets – just ask around you will be surprised how easy it is to get free tickets to sporting events!
6. Home Upgrades
Be mindful when considering major home upgrades. Furniture, new appliances, remodel’s new fixtures, painting – you name it, can be come very costly. Always have a budget and a plan and see how you can make it work for you.
I can speak on a lot of these sacrifice subjects because early on we didn’t do these things. In fact, we recently made the mistake of not following our own advice when it comes to home upgrades.
Like most men I am a project guy, but sometimes I bite off more then I can chew. Tearing down a non-load bearing wall in our home turned out to be a $1500 expense and a new kitchen.
With intentions of selling in 2021, when our house is paid off, it will be great to market a new kitchen. But because we didn’t budget or really even know how much things would cost, we ended up spending more then we probably should have.
This is a an easy one. Straight up – if you have student loan debt or consumer debt, or if you rent an apartment you should not be driving around in a brand new car or a leased vehicle.
My car philosophy – if you can’t write a check for it then you shouldn’t drive it. In my lifestyle inflation post I wrote about how people will drive cars they can’t afford to impress people they don’t even really like.
Dave Ramsey coined the phrase and talks about car expenses here. Simply put, cars are depreciating liabilities and the sole purpose is to get you from A to B. Don’t spend a fortune in doing so.
When you are 75 you won’t remember half the cars you drove, but you will remember the trips and memories!
Clothes are not that expensive are they?
Considering some estimates say the average 20-30 something year old is spending around $2,000-$2,500 on clothes each year I would say that is pretty expensive.
Line up all the clothes and shoes on the left, set $2,500 on the right. Which one you choosing?
Once again, I am not saying don’t but any clothes, but have a budget and be strategic.
Shop for season ending sales and stay away from big brand department stores.
My take on delaying and making financial sacrifices.
Some bloggers, finance experts, or writes will skirt around what it sometimes really takes to seriously hit financial goals. I recently posted how we have missed financial goals, but who hasn’t?
But truth be told, it is not some special strategy or crazy secret that gets people ahead financially. It is usually a good source of income with disciplined money management skills.
Make the sacrifice now, so you can reap the rewards down the road forever!!! Along the way you will actually have lots of fun too!