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5 Steps to pay off your student loans early

5 Steps to pay off your student loans early

May 01, 2022

According to, the average student loan debt per person this year is $31,172. Ouch! That's about what most graduates will make per year when they graduate. While we can cross our fingers that some politician somewhere forgives all these debts, you're more likely to eliminate your debt by taking things into your own hands. Here are 5 simple steps to help pay off your student loans early.

  1. Know your why

This is crucial for any goal you set, particularly goals that require being disciplined. Your why is specific to you- it may be because you want to be able to buy a house or start a family or be able to travel more. It may be simply because you don't want to live in debt. Know your why, write it down, and put it somewhere you can see to remind yourself the reason you're working so hard.

  1. Understand the numbers

If you just go with the default monthly student loan payment option, you might not notice how much you're spending on interest. But check out this example- someone graduating with an average loan amount of $30,000 at 6.5%, taking 20 years to pay it off, will end up paying $23,681 in interest!!! That's 79% of the original amount borrowed! (Pro tip- this is why lenders are so flexible on repayment options; they make more money!) If you know how much the lenders are making on you, it might incentivize you to pay it off early so you can keep more of that cash for yourself.

  1. Reduce your monthly expenses 

When my husband and I set a goal to pay off our loans early, we realized we'd have to seriously trim our monthly expenses to make progress. We chose to live in a 650 square foot apartment to save on rent, share a 1996 Ford Mustang to save on gas and insurance and avoid a car payment, and only ate out once a month. We also kept vacation and gift spending to a minimum, knowing that a vacation that compromised our financial stability wouldn't be the most relaxing, and that we could be more generous when we were debt-free.

  1. Commit most of your "extra" money to go towards your debt

It may sound extreme, but we put leftover wedding gift money (after our honeymoon) toward our student loans, as well as our tax refunds. It would have been easy to justify spending that "extra" money on things like vacations or a nicer rental or some new outfits, but we were committed to our goal, and it paid off.

  1. Celebrate your wins in ways that don't compromise your goal itself

The long haul of paying off student debt lacks the immediate gratification of going on vacation or a spending spree, so find little milestones along the way to celebrate and reward yourself. Just make sure that your rewards don't undermine all the hard work you just did. Pick a reward that's meaningful to you and fits your budget.

I hope these tips help you think of some ways you can get rid of the baggage of debt so you can feel free, and have more funds to save and invest in your future. 

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