Paying off the last of one’s student loans can be the most liberating experience for anyone who’s been acquainted with their debt for years on end. For recent UCLA alum Taylor Milam, becoming debt free meant much more than that.
Milam, who graduated last year, paid down $14,000 of student loans in just seven months by setting goals, cutting back, and making drastic financial concessions.
Not only is her experience one in how to pay off debt faster than most, but it completely transformed Milam’s entire outlook on money, life, and happiness. Learn how achieving “freedom from money,” as she calls it, has led her to help others accomplish the same.
Avoiding the trap of debt
Before Milam earned her undergrad degree, she knew that staying stuck in a cycle of seemingly never-ending debt was something she didn’t want. Growing up, she’d watched her parents take decades to pay off her father’s law school loans, and saw the financial strain it can cause.
“I always knew that I wanted to pay [my debt] fast,” she says. “I never liked the idea of having debt. It’s always stressed me out and felt like a burden; something that could make you feel trapped.”
This notion wasn’t made any simpler by the fact that while a student at UCLA, Milam was living in one of the most expensive areas on the westside: Westwood. She was compelled to support herself for her junior and senior years without a sturdy financial safety net in place.
“My final years of college can be summarized in one word: fear,” she writes on her blog. “Every dollar I spent was excruciatingly painful because I knew there was a finite amount of money in my account, and although I worked three part-time jobs, everything I earned went towards survival.”
Combine that with the responsibility of attending class and keeping her grades up, and living through fear-based finances wasn’t sustainable for Milam. She decided that some changes needed to be made if she wanted to survive, graduate, and get on track to paying off her loans.
An obsessive groove
Milam started by making a bold move — she sold her car just as she’d relocated to San Diego with a new job opportunity. It was a smart financial decision, though, since the early 2000s Volkswagen had been siphoning nearly $500 a month out of her budget for repairs and maintenance.
To get around San Diego, Milam biked and used rideshare and rental services like Uber, Car2Go, and Lyft. She limited how often she dined out. And she continued the trend of living as a poor college kid, even though she had a full-time income working in media relations at a major university. (All this without refinancing or consolidating her loans.)
According to Milam, it was costing her nearly $6,000 to maintain the car. Now, she bikes, uses public transportation, grabs an Uber, or rents a vehicle when she needs it, saving her an annual amount of roughly $3,000.
She also rented clothing from several online boutiques instead of buying, which saved her nearly $1,100 for the entire year. Previously, she had an annual wardrobe budget of $1,800.
And between a Netflix subscription and frequent trips to the library, renting entertainment options cost her just $108 for the year — nearly one-sixth of what she’d normally spend to buy books, movies, and cable TV subscriptions.
Though she deliberately kept money tight, Milam calls it an “obsessive groove” that began working to her financial advantage. Once she got the frugal ball rolling, she was freeing up $2,000 per month to put towards her student loan repayments.
She didn’t give up on her priorities and non-negotiables, however, and continued to spend on what was important. Though it would have saved her $300 per month, Milam chose not to take on another roommate. She also continued to make regular out-of-state visits to see family and socialize with friends.
“My main goal was to create a sustainable plan that didn’t feel painful or miserable,” she explains, “and I think it helped me to speed things up and remain focused.”
Learning how to pay off debt faster
By April, just over six months from making her first student loan payment, Milam was done, free of $14,000 worth of debt. Comparatively speaking, that’s a blink of an eye for most people, who won’t have even begun to scratch the surface of their debt —much less pay off thousands of dollars — at that point.
Achieving such a major goal might compel some folks to go out on a spending spree or revert to a lush lifestyle. But for Milam, the experience of cutting back, paring down, and tightening her belt led to a new, enlightened attitude about money.
She discovered how to pay off student loans quickly, and learned what’s possible with a creative mind and a disciplined approach. But there’s another important lesson Milam says she learned: Being debt free — and having more money in one’s hands — won’t create (or buy) happiness. She says she owes her student loan experience to dispelling such notions to the contrary.
“It was a really weird experience emotionally to be done,” Milam says. “I think I had placed so much importance on becoming debt free. Your life is still the same, you have the same job, you have the same partner, you have the same friends. It’s not a magic potion that will fix your life. It’s something I’m proud of, but it’s easy to think that once you achieve a certain goal that your life will be so much easier.”
She adds, “I’ve definitely learned that money should never be the goal. It’s a tool.”
It was such a valuable tool that Milam started blogging about the experience on her site, The Freedom from Money, where she shares what she’s learned, and more importantly, how it reshaped her view on money and life.
One point that Milam likes to impart to her readers is to be happy with what they’ve got. Too often, we may desire what other people have, but once that goal is reached, it creates a vicious cycle of never being satisfied.
“One thing I’ve learned is that once you’re done with the goal, there’s something else,” she says. “I think you can get into that mindset, that ‘You can sacrifice today for tomorrow.’”
Her advice to others is to not make that mistake — but don’t stop living your life as you learn how to pay off debt faster.
“Taking care of yourself is important,” Milam explains. “It’s important to not stop living your life, and finding happiness and creating happiness while you’re on your debt journey.”
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