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How do I pay off my debt quickly?

| November 21, 2017
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I love when my clients ask me this question because it tells me that they’re taking more control of their finances! There are no real shortcuts to debt payoff, but you can definitely take an approach that will help you expedite the process. The day I paid off my student debt will forever be a life milestone for me. Although we all have our own reasons, there comes a point for many of us when we’re just ready. My reasons were primarily driven by my goals -- I wanted to be able to spend my money on the things I value such as travel, my next vehicle, and maybe an “early” retirement. The other reason is because debt is so much more expensive! In fact, minimum payments typically cover only the interest payment on your outstanding balance for that month.

After I graduated from Harvard, I had a total of about $100,000 worth of debt to my name. Today, that is all paid off.

As many of you know, I had the honor to attend the University of Notre Dame for undergrad and earned my Master’s from Harvard. Although I qualified for substantial financial aid as an undergraduate, I was still required to take on loans. Between college and graduate school, I incurred about $80,000 in student debt. And that doesn’t include what I owed on the car I purchased my junior year in college. A common recommendation for college students is to not take on more debt than what your first job out of college will pay -- something I learned as an adult. Many recent college graduates have an inflated idea of what they’ll earn in their first job! Well, when I first moved to Houston and began teaching, my salary was $43,260.
How did I pay off my debt in 7 years?
Below are some thoughts on what helped me get there more quickly over the years. That said, remember, these are your goals -- be patient and realistic as you develop your approach.
  • Look into student loan forgiveness. I did qualify for the Teacher Loan Forgiveness program, however, only a small portion of my overall debt was forgiven over the course of 4 years that I qualified for the benefit. There are other loan forgiveness program out there -- take a look to see what you qualify for. Public Service Loan Forgiveness could be an option if your federal loans total more than your salary.
  • Set a goal. No secret here, especially for you educators who work with students year in and year out on setting goals. You and I both know that we are more likely to achieve our goals if they are SMART, if we share that goal with someone else and if we stick with it! I would highlight the importance of challenging yourself while being realistic. No goal is too small -- we all need to start somewhere. As you can imagine, my goals have shifted over time but my very first was to shift my mindset on savings. Pay yourself first: this principle transformed my savings and set me up for success month after month!
  • Build an Emergency Fund.Early on, I learned that I needed to build an emergency fund in order to insulate myself from any unpredictable expenses. Experts recommend 3-6 months of living expenses in this account. This prevents us from taking on more debt, like a credit card, when an emergency presents itself. Turns out, “emergencies” are more common than we think. Once you meet this goal, you are free to redirect that money to your next financial goal. For example, if my goal for my emergency account was $3,000 and I was saving $250/month -- I would have reached that goal after a year. Starting in that 13th month, I now had an extra $250. You have a choice with what to do with that newfound extra money!
  • Be intentional.When I first started paying on my debt (it wasn’t just student loans, I also had a car payment), I paid exactly what was required of me -- on my student loans, I believe I was on the standard repayment plan. However, starting in month 13, I selected a loan that I was going to attack! I chose the loan with the highest interest as that is where I am losing the most money. Another approach is to pay off the smallest debt first which helps you start knocking them down more quickly, therefore building your confidence. Either way, I had $250 extra to apply. As you can imagine, if you are paying $250 extra to any loan, the balance starts to drop much more quickly had you not.
Let your friends pass you up.
  • Let your friends pass you up. It is easy, especially in your 20s, to spend every dollar you make and maybe even more. More importantly, social media gives “keeping up with the Joneses” a whole new meaning. We tend to compare ourselves to those around us and our voices in our head start saying -- “I need a new car!” “ I need to buy a house today.” We need to have kids!!” “I need to travel to Europe!!!” I agree, you deserve all of that and more should you want it. My belief is that you can have anything you want in this world -- you just cannot have it all at the same time AND you need a plan on how to get there. Your friends who are posting all that on Facebook and Insta likely are not also squashing their financial goals. Let them pass you up.
  • Track your spending.This takes self-control and discipline. Lifestyle creep is where we automatically adjust our lifestyle to fit our increased salary -- as a result, we do not save any more and we often do not feel as though we have more money. It is often a hard truth to face to see in black and white how much we spend on certain things each month -- eating out is a common culprit.
  • Be extreme.How important are your financial goals to you? What are you willing to sacrifice right now in order to meet your goals? I, for example, pay $35/month for my cell phone bill -- unlimited talk and text and 5 GB of data. My goals are that important to me -- and honestly, I do not think my quality of life is any less without unlimited data -- there is wifi everywhere! Read my post: Your cell phone bill is standing between you and your goals.
How do you eat an elephant? One bite at a time.
Debt can be overwhelming and even paralyzing but inaction is not the solution. Taking the first step is often the most difficult. Schedule a meeting and we can begin the conversation.


Jesse is a graduate of the University of Notre Dame and earned his Master’s in Education from Harvard. In his education career, he served as a teacher, counselor and Director of Alumni for YES Prep Public Schools. He is a member of the Teacher Retirement System of Texas (TRS) and takes pride in helping fellow educators better understand their pension and plan for their future.
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