For recent law school graduates, the end of the loan repayment grace period is upon us.
A funny tweet that has been making the rounds summarized how a lot of us are feeling about the future:
I graduated from law school 6 years ago with $250,000 of student loan debt. But after years of hard work and tens of thousands of dollars of payments, I can officially say that I now owe $315,000.
— Optimize Your Life (@MattLaneWrites) September 18, 2018
It doesn’t have to be this way. These are a few ways I’m making my loan repayments palatable:
I figured out the maximum I can afford to pay.
I made a budget that accounted for expenses like rent, food, car payments, gas and a couple hundred dollars for “miscellaneous” things that pop up. All income that isn’t budgeted for a necessity now goes to loan payments—and I mean all. At the end of the month, the “miscellaneous” fund goes to loans as well. Despite having a job, I am still living like a law student. Maybe even cheaper than a law student, because I’m really paying attention to every dollar.
I figured out what I was wasting money on.
There is a feature in most credit card online accounts that lets you “sort” your yearly payments by type —restaurants, groceries, gas, etc. I was able to see I spent an embarrassing amount at fast food restaurants — mostly kid stuff, which I invariably bought because I was too tired to cook dinner. This helped me to strategize about eliminating the cost. I now have stocked my kitchen with “home fast food” for when I’m too tired to make dinner: frozen french fries and chicken tenders.
I figured out when I’ll be done.
This is perhaps the most important step. Paying the maximum you can afford is exhausting; if I didn’t know the end was in sight, this lifestyle would be extremely hard to maintain. I figured out that I’ll be done in exactly 26 months if my income stays the same. (If it increases, I’ll pay this off faster). When you think about the scale of life — paying off enormous debt in just over two years vs. carrying around the debt for a decade or more — this is really not bad.
I’m finding the fun in it.
I actually made a little “thermometer,” like the kinds used in telethons, to color in every time I make a substantial payment. I also occasionally play around with a loan repayment calculator like this one to see how long it’ll take if I fall off the wagon. It’s really satisfying to see how virtuous I am.
Lastly, there are plenty of milestones to celebrate — from the more obvious substantial repayment marks (bake a cake for every $20,000 repaid), but also reduction in interest per month. When I first started repaying, I owed like $550 in interest every month. Now I’m down to $400. I feel like a really skilled ER doctor, stopping the hemorrhaging with finesse.
There are a million sources of inspiration out there as well. I love listening to people on Dave Ramsey’s show recount how they repaid enormous debt while facing tremendous obstacles. If they can do it, I can do it. I also like reading on the Motley Fool about how I can put my payments to good use as soon as my loans are repaid.