Graduating from college with $87,000 in student loans might not seem so bad when you’ve got a law degree and a promising six-figure starting salary right within your reach.
So when attorney Kevin, aka the Financial Panther, landed his first job at $110,000, tackling his student loan debt wasn’t so much a matter of affording the payments, but resisting the urge to let the money go to his head.
“When I started working, I was fortunate enough to get a good job, but I didn’t want to fall into this trap of buying all this stuff and living like a bigshot lawyer, living a lifestyle like many of my classmates and colleagues did,” Kevin explains.
“Everyone falls into that trap. The first thing they do is go and get themselves a fancy apartment in a cool part of town. They’ve got this nice car and their money is going to everything except student loans.”
So what did he do? Kevin didn’t pressure himself to present an outwardly lavish image. He buckled down, doubled up his loan repayments, and even took on some creative side hustles, parting ways with his debt after only two years.
It’s hard to manage the immediate transition to a well-paying career after years as a starving student. Imagine the stuff you could buy and the status you could outwardly present — all before turning 30.
When Kevin earned his degree in 2013 at age 26, he was tempted to make his student loans a lower priority simply because his new, lucrative job as a corporate litigator could easily buy all the trappings of success.
“I think it’s true for all high-earning professions,” he says, “that you’ve been deprived for so long, living like a student, and then all of a sudden, you’ve got that paycheck.”
But Kevin immediately observed what that type of foolish spending did to some of the veteran attorneys in his circle. They’d disposed of most of their income and were stuck paying down their student loans for years on end, in jobs they were no longer passionate about.
“These were people who were still paying their student loans off,” Kevin says. “They don’t like the job, but they have to stick it out because of the paycheck.”
According to Kevin, his monthly payments weren’t even that high — roughly $1,000 a month, about 11 percent of his attorney take-home pay. Though comfortably manageable, that wasn’t enough for Kevin.
“I didn’t want to be the normal young lawyer and take 10 years to pay back my student loans,” he writes on his blog.
“There was an opportunity to do something great with this newfound income … A time will probably come when your job is the worst thing in the world, and I didn’t want to be forced to have to stay in a job I hated because I needed the paycheck to keep up my lifestyle.”
The plan: Treat salary as windfall
Kevin looked at his long-term goals. He wasn’t happy at his then-current job and had his eye on a more fulfilling, albeit lower paying, opportunity.
For the time being, he fully intended to treat his high income as a windfall — a temporary boost of revenue that wouldn’t be around forever, so he needed to make it count.
His first step relied on this mantra: “Even though you can afford it, you shouldn’t buy it.”
Not wanting to squander his income, he dialed back his spending to only the necessities. With his fiance, they split the rent on their modest Minneapolis apartment. Kevin also began using budgeting apps like Mint to balance his finances, manage his expenses, and stay on top of his loan repayments.
By mid-2015, Kevin also refinanced and consolidated all eight of his federal loans through SoFi, cutting down his original interest rate of 7.9% down to 4.3%.
Swinging those side hustles
To further accelerate his debt payoff, Kevin took on several side hustles. He started earning extra cash by dogsitting through sites like Rover. Already a dog owner, caring for one or two additional dogs wasn’t too much of a burden.
Kevin also began making food deliveries on his bike and renting out a spare guest room via Airbnb. Selling trash finds also netted him a good amount of extra money to put towards his loans.
Living in a college town, Kevin searched for discarded items in between semesters, when students would throw away items of value that could be resold. In his first year alone, Kevin earned more than $1,000 just from selling found items on Craigslist or OfferUp.
Through dialing back his spending, refinancing his loans, and mustering side-gig money, Kevin was able to double his payments, and in the final stretch, triple them. This summer, just over two years after graduating, he was done with his entire $87,000 debt load.
On an episode of The Simpsons, Marge suggests to Homer that they consult a financial planner, but Homer mishears it as financial panther, picturing a large black cat mauling a banker.
For Kevin, the cartoon resonated and Financial Panther, his blog, was born. The effort: Teach people how to aggressively maul their debt, save money, and come out financially solvent.
His first piece of advice to anyone facing student loan debt is to start planning early, and expect to make concessions if paying off your loans is something you want to do quickly. Don’t wait, he says — start in your 20s and make 30 your goal to be debt-free, if possible.
“If you’re young, most people aren’t living super baller,” he says. “It’s a good time to really get rid of your debt.” But he notes, ”You’ve got to really plan it out. You’re not going to accidentally get out of debt. That’s not going to happen.”
Kevin encourages his readers to start educating themselves on ways to build wealth in the long term. Investigate the best tax-advantaged investments, like a Roth IRA or 401(k), he says, and get to know your loans: what types they may be and the terms, interest rates, and payment options.
But most of all, he advocates for a frugal lifestyle, regardless of your income. The proceeds from the sacrifice can be used to pay down debt now, freeing up your future income to save and spend debt-free.
Even the most upwardly mobile professionals may encounter fluctuating income or extenuating circumstances over the years. Facing them without the responsibility of student loan debt can better prepare you for whatever life may bring.
For Kevin, this reduction in income was deliberate. Once he paid off his debt, he took on another job as a government attorney where he earns $50,000 less than he did previously. But that was the point: A higher salary doesn’t always equal a better job.
By taking advantage of a well-paying job and scaling back, he was able to pay down his debt, giving him the freedom to pursue whatever opportunities he wanted without being chained down by his student loans for years on end. Now, although he earns less, he has zero debt and a challenging career opportunity.
Kevin advises readers to ask themselves what they really care about.
“The more stuff you get [and] the more things you buy, the more you’re forcing yourself to make a certain amount to cover the things you’re buying,” he says. “Once you’re used to living on less, it’s a good idea to do that forever. You never know what the future will hold.”
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