Student Loan Update: Down to $8,900

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Tired of her glacial repayment pace, Bridget decided to take matters into her own hands.

Tired of her glacial repayment pace, Bridget decided to take matters into her own hands.

When we last heard from Bridget Casey, her student loan debt stood at $14,500. Here’s how she shed $5,000+ in the 2 months since that update. 

I had a nasty bout of debt fatigue at the end of last month that led me to take drastic measures to reduce my student loans.

Exhausted by my own $1,000/month repayment plan, I decided to cash out a mutual fund to pay off one of my loans a full—5 months ahead of schedule.

***

HOW I SAVED OVER $6,000 IN 4 YEARS

That index mutual fund was one of the first investments I ever made. I began putting money in it right before I began my third year of university, and I regularlycontributed $100 to $200 every month thereafter until a few weeks ago.

These regulardeposits were compounded by the recovery of the stock market over the past few years,and my initial $1,000 investment gradually ballooned to over $6,000.

It’s amazing howmuch I accumulated with essentially painless withdrawals from my checking account. Inever missed the $100 that I put in each month, but I sure was grateful to take out the$6,000 sum at the end.

REAPING THE REWARDS OF DEBT FREEDOM… AT THE MALL

Eliminating my federal student loan balance also eliminated the payments of$900 each month that I had committed toward it. Suddenly I had a huge amount ofdisposable income available.

I won’t lie: The first thing I did was treat myself. Three newsweaters, two extra dinners out, and one iPhone 5 later, I was free of both my debt andthe sense of deprivation it sometimes caused.

However, I knew that continuing on arampant spending spree would just result in more debt later, so I got back on track andmade a plan for what to do next.

WHERE MY MONEY (AND DEBT) IS HEADED NOW

First, I increased my payments to my provincial student loan. I want to be debt free, and to do that I need to shed the $8,900 I still owe for my undergraduate degree.

Second, I started a new travel fund and began putting money away for my next adventure abroad. I know myself well enough to recognize that a vacation at least once per year is essential to my happiness.

Lastly, I doubled my contribution to my brokerage account. If this experience has taught me anything, it’s that money gives you options. If I hadn’t been proactive and begun saving and investing years ago, I’d still be grappling with an extra $5,000 of student debt.

With more than half of my student loans paid off only a year after they entered repayment, I’m looking forward to being debt free way ahead of schedule. Maybe I’ll even get two vacations next year!

Bridget sacrificed future earnings for happiness now. Would you do the same thing? Let us know in the comments.

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  1. Travis January 16, 2013 / 2:55 pm

    I love it!!! Most people don’t recognize the freedom that comes with being debt free. They just see the next sparkling toy in the store window and “how much will my monthly payment be?”

    Congrats on paying your student loans down so quickly!! I have my home mortgage paid down to $63,000 and I have a plan in force to pay it off in the next 4.5 years. I too will be happy to lose the sense of deprivation that my plan is causing but I feel like it’s worth it.

    Travis

    • Ryan Lane January 17, 2013 / 1:48 pm

      That’s awesome, Travis! Thanks for the feedback and for sharing your own story. Definitely keep us posted on your progress. Would love to know how you’re doing and if you run into anything unexpected. Here’s hoping you keep it up!

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