How I Paid Off My Student Loans [WITHOUT a Full-Time Job]

I was really depressed because of my debt I hadn't been able to find a job

I'd gotten to this really expensive, really fancy school and I felt like a failure I just felt like my debt signified that I was a loser Welcome to the Money Insider series, where we talk of real money, with those who've been through it themselves I'm millennial money expert and author Stefanie O'Connell today we're talking to Kara Perez who paid off $25,302 in student loan debt while never earning more than $32,000 per year working entirely part-time, gig economy jobs I graduated college in 2011 with over $25,000 in student loan debt I couldn't find a full-time job, and that made me really sad

And also really broke So in 2014 I googled 'how to pay off student loans faster' I had $18,000 left in student loans, but also made $18,000 total that year because I was working side jobs Bu t10 months later I had paid off my student loan debt, and had increased my income to $32,000 The first thing I tell everyone to do is to sit down and make a list of your debts

Especially if you have different types of debt Those come with different interest rates, they come with different payment terms, and even the same kind of debt student loan debt for example across lenders can look very different So you just need to understand what you're working with So sit down make a list of all your debts, the interest rates, and the lenders And then from there pick a strategy

I personally used the debt avalanche method, which is paying off the highest interest first That worked really well for me It that might not be the best thing for you But be organized about how you attack the debt Don't just go at it willy-nilly

I think a lot of people feel shame or embarrassment or just pure sadness surrounding debt, and that alone, like financials aside, just gathering the kind of the courage to look at your negative emotions in the face is hard And to say okay I feel bad about this but I'm I'm gonna do something about it is a huge step I try to be really transparent about how my debt made me feel because you're not alone If you're sad about your debt or if you're anxious about your debt lots of people have those feelings It's all about recognizing them acknowledging them, but not letting them control your life

I started talking about my debt with anyone who would listen, it was like, 'I'm really trying to pay off my student loans this year', and sometimes it was in response to 'here's why I can't come to your birthday party,' but sometimes it was just like, 'I read this really amazing article about a couple that paid off a bunch of debt', or 'I just learned this new thing about money and I want to share it with you' Very few people don't have some sort of debt, and so I would say something like, 'oh I'm trying to make an extra big loan payment this month', and people would say 'oh yeah, you know I also have loans, I could probably stand to make an extra payment' or 'I should probably save my money too' No one shamed me, no one was like 'you're an idiot,' everyone thought it was awesome Being the one to say it out loud, just to acknowledge the elephant in the room, I think that was really empowering for a lot of people in my life

In fact, I know it was empowering, because all my friends started calling me, texting me and emailing me like 'hey I have a federal loan, it seems like it's different from this other kind of loan and like, can we talk about this?' or 'hey, what do you use to do your budgeting?' Like people wanted to talk to me about it as much as I wanted to talk about it I've never been more dedicated to anything in my life as I was to becoming debt-free, which was hard, but it also was the most incredible thing I've ever done for myself I felt like Wonder Woman paying off that debt! I remember April 2015, I made a $4,000 loan payment, and I was like I am a money goddess Like a hundred percent! It was so incredible I had gone from a really negative place to being happier literally day by day

I think taking action was the single best thing I ever did because I felt like I was drowning in the negative emotions and the anxiety, and beginning to forge a path, even though it was kind of an overgrown, thorny path – I was like, well, at least I can see what's in front of me At least I know working towards zero feels good and is financially good My life has changed 180 degrees I actually have money now! I've been able to save, I've been able to invest, I've been able to travel So the same year that I have paid off my debt

I paid it off June 2015, so I still had 6 months left in the year, and I immediately switched into investing mode Because you get to zero and that's awesome, but then you're like, 'oh wait, zero is no money' But like, I still don't have any money I don't have any debt, but I don't have any money So just putting money into saving and money into investing has been amazing

My top takeaway from Kara was the importance of the 'why' The idea of keeping the end in mind while working through the day-to-day ups and downs, wins and setbacks, of working towards your financial goals So whatever money milestone it is you're trying to achieve, whether it's becoming debt-free, improving your credit score or saving up for a home Imagine what your life will be like after achieving it Spend some time imagining that moment

How you'll feel and how your life might actually change Will you be able to apply for the mortgage on your dream home? Will you be able to finally take that trip you've been planning? Will you just be able to sleep better at night? When you start to lose focus and purpose while paying down your debt and working toward your financial goals, remember to reconnect with those feelings – your goals and the feeling of achieving them That's all for this episode of the Money Insider series I'm Stefanie O'Connell To find out more about Kara, you can follow her @webravelygo, and remember to subscribe to the channel for more real money talk from money insiders and more!