I’ve already shared my financial story about how I eradicated my credit card debt and developed some positive financial habits. Now it’s time for the next chapter: student loans. Recently, I realized that when many people say they have zero consumer debt, all too often they leave out student loans and mortgages. I’m tired of being one of those people. Debt is debt and student loans are just as imprisoning as credit cards. I want total freedom.

Conventional wisdom says I should take the full term to pay off my student loans because it’s low interest debt. I say that’s ridiculous. If you calculate the amount of interest you pay when you choose to take 20 years to pay off student loan debt, you’ll quickly realize that it’s in their interest, not yours. But what if you could pay it off in one year? That’s exactly what I plan to do.

Now that I don’t have to think about credit card debt, I’m going to focus all of my efforts towards paying off all 45K of my student loan debt in one year. Even though the real work won’t begin until late November, starting next week, I’ll chronicle my progress–from the pre-work to the finale. Every other Friday, I’ll share updates and reflections on my progress towards living a completely debt free life. My strategy? While I will apply obvious strategies, like reducing my living expenses and increasing my income, I plan to explore unconventional methods of doing these things. And you get to benefit from my triumphs and stupidities, um, I mean mistakes.

The Reason Why

Before I get into the work I have to do, I want to explain the reason why I’m doing this. Beyond my desire to be completely debt-free is a stronger urge to help others avoid getting into the same situation. It dawned on me this week, as I read about upcoming changes to student loan terms, that everything the government is proposing is just a band-aid. The best solution is to change the broken model of borrowing money to pay for education.

So, I’m doing this to educate myself so that I can then educate others, specifically students. I want to help students avoid having thousands of dollars of debt in the first place. For those who already have student loan debt, I want to help them become debt-free sooner than later. For the record, let me clearly state that I believe in repaying one’s debts. Sorry students of OWS, if you borrowed money, pay it back. Over the next 12 months, I hope to give you some great ideas on how to do exactly that.

Pre-work to Do

Before I get started, I have some pre-work to do to prepare for the lifestyle changes that this adventure will entail.

• Downsize housing costs - My biggest expense is rent. My goal is to reduce this by $200. But my super-secret real goal is to live rent-free. You can read about ideas for rent-free living here. We are in the midst of exploring at least one of them. I’ll report back soon!

• Automate expenses - I’ve already automated most of my expenses so that they come directly out of my checking account, but over the next week I’ll review everything once more to see if there’s anything that I’ve missed. By doing this, I’ll know that everything is getting paid on time and within budget. That way, I can focus on putting extra money towards the student loan.

•  Sell anything I don’t need - This has been an expensive year: I replaced two laptops (one for me and one for my partner), spent more money than I wanted to in St. Thomas for a close friend’s wedding, and saved the last few thousand for my emergency fund. All of these were necessary expenses, but now it’s time to sell anything laying around the house and put that money towards debt payments.

Challenges Along the Way

• Living a systematic existence – There’s a distinct difference between a simple lifestyle and a systematic one. Systematic means accounting for everything and focusing on needs, not wants. I’ve done this twice before, but it’s always a shock when I have to do it again.

• Writing full-time vs. part-time – I currently work full-time and write part-time. I’d like to make the switch to writing full-time, but I need to make sure that I still have a steady income. Paying off debt while switching careers is a big risk.

• Handling unexpected expenses – Murphy’s Law, right? There’s always something that comes up. I’ll figure out how to handle any unexpected expenses along the way.

• Paying for school out of pocket – My partner is currently going back to college and we’re paying for the tuition out of pocket. This presents an added challenge, so we’ll have to figure out creative ways to generate enough income to cover school without sacrificing debt repayments.

Ideas for Generating Income

Here are a few ideas I have for generating income along the way:

• Freelance writing
• Teach on-ground classes
• Launch other online income streams
• Teach online classes and workshops
• Accept donations
• Public speaking
• Enter paying writing contests
• Accept contract work
• Minor investing

I hope you’ll join me in this journey! Again, every other Friday I’ll post an update. The first few updates will focus on the pre-work I have to do to prepare for this adventure. Once that’s done, you’ll get to read the juicy stuff!

Photo credit: upsuportsmouth

debt, paying off student loans, student loans