Your student debt might be keeping you up at night, but imagine if you had $191,948.91 in loans? That’s the amount Joshua Holt, 37, borrowed to get his law degree from Boston College. All of that debt became a huge source of stress for the corporate lawyer.
“Who wouldn’t be stressed by a $200,000 anchor hanging around your neck,” he said. “It made me feel completely tied to my high-stress and high-income job. I have plenty of colleagues from law school who did not end up in big law firms and I know how hard it has been for them to pay off their loans.”
It was important to Holt to pay off his student loans quickly in order to give him more freedom.
“I realized early on that if I paid off my student loans I’d open a lot of doors in the future,” he said. “And feel like I had more options.”
Luckily for Holt, who blogs at The Biglaw Investor, he managed to get a good job after graduation in the mergers and acquisitions field. This allowed him to repay all of his debt on Dec. 25, 2016—about seven years after he graduated. Here are some things that helped him along the way.
Automating His Debt
One thing Holt emphasized is that repaying debt can get discouraging and make you want to give up at some point along the journey—especially when you experience big life upheavals or changes.
“When you enter your numbers into a student loan repayment calculator it seems academic. The reality is that a lot of things will happen in those five or 10 years,” he said. “There will be new jobs, moves, breakups, weddings, and more. It’s impossible not to get discouraged at some points along the journey. Paying off debt is a slog.”
Holt ensured nothing would slow down his progress by automating his payments. This meant paying extra toward his debt didn’t become a decision he had to make each month.
“The key is to make it automatic so you can settle into living your life without feeling the pain of choosing to make a payment each month,” he said.
He set up his repayment so that he made excess payments automatically. It took more work to make sure the funds would go to his student loan balance and not just be counted toward future payments, but it was worth the effort and helped him save a lot of money on interest over the life of his loans.
Finding a Way to Stay Motivated
One thing that helped Holt was to create a visual way to track the progress of his debt repayment and stay motivated after his debt dipped below $80,000.
“I created a paper chain and hung it up in my loft apartment,” he said. “Each chain represented $1,000 in student loan debt and every time I paid off $1,000 I tore up one link in the chain. The visual manifestation of the debt really helped, and I paid the remaining $80,000 off that year.”
While you don’t need to create a paper chain to stay motivated, think about visual or other unique ways to motivate yourself to pay off your debt faster.
One thing Holt wishes he had done was refinance his student loans earlier, because he could have decreased the amount he was paying in interest and repaid his loans sooner.
“I wish I could have refinanced sooner,” he said, “but those student loan refinancing companies didn’t exist back when I graduated. Instead, I had to pay interest rates at 7% to 8% for several years. I shudder to think how many tens of thousands of dollars I paid in extra interest on loans.”
There are many student loan refinance companies these days that can offer deals on refinancing your loans and help you repay them faster.
Slow and Steady
Ultimately, one of the biggest frustrations about repaying student loan debt is how long it takes. Holt said he hopes his story will encourage those who feel like they’ll never get out of debt.
“Keep on going,” he said. “You can do it. Slow and steady wins the race.”Now that he’s debt free, he’s able to enjoy his life more fully. “Being debt-free feels amazing,” he said. “Since I live in New York City, I also don’t have a mortgage, so I really have no debt. I don’t owe anyone anything. It’s liberating.”