For the average student loan borrower, it can take several years – if not decades – of patiently making monthly payments to get that balance owed to zero. That’s assuming, of course, a good salary and no major money trouble.
But take the statement “Debt Free after Three” and it perfectly summarizes what Zina Kumok was able to do that most other grads can’t: she paid off $28,000 in federal student loans in just three short years.
“Sometimes,” Kumok recalled, “I look back and I think, ‘How did I do that?’” Though it seemed like some insurmountable financial feat, Kumok relied on simple discipline and proactive ways to decrease her expenses, increase her income, and combine both to completely pay down her debt.
So how did she do it? Keep reading to learn the steps Kumok took to quickly become debt free, and how she’s used the experience to inspire others to do the same.
Year 1: New degree, new job, $350 in monthly payments
Kumok graduated in 2011 with an undergraduate degree in journalism, but no immediate employment opportunities – not very encouraging with nearly $30,000 in student loans to pay off.
”Honestly, the first year was really tough, because that was the least amount I made, and I had no savings,” she said.
Luckily, within six months of graduation, Kumok landed a staff writing gig at a newspaper, but the salary wasn’t much more than her total debt load. According to Kumok, the $350 monthly loan payment equated to 20 percent of her take-home pay. While she was able to live within her means and cover her other expenses, this wasn’t an acceptable option for her.
“I knew I wanted to pay off my loans, but I couldn’t do that on a salary,” she said. “I stuck to a budget and was very deliberate in what I was spending.”
Year 2: Better paying job, expenses cut, $750 in monthly payments
By year two, Kumok was able to more than double her monthly loan payment, both with a new job with a better salary, and several frugal lifestyle changes.
To start, her new writing job afforded her more pay, which meant more money towards reducing her debt. By this point in 2012, Kumok had relocated to the same city as her then-boyfriend/current husband, which helped her save at least $200 in gas money from the long distance driving she’d been doing every weekend.
By 2013, her debt balance was whittling down more quickly than she’d expected. At the end of year two, nearly half of her debt was behind her.
Year 3: Roommates, $950 in monthly payments, no more debt
By the third and final year it took Kumok to completely pay off her loans, she was able to increase her monthly payments to about $950, aided in no small part by finding roommates who could help reduce her rent. Instead of spending the remainder, Kumok applied it towards her monthly loan repayment.
In November 2014, three years and six months after graduating college, Kumok was debt-free – a remarkable accomplishment considering the alternative. Kumok had nearly resigned herself in 2011 that she’d be paying her student loans off for a least a decade. That means today, in 2016, she’d still have five years left to go.
Regrets and lessons learned
If three years to pay off $28,000 seems like lightspeed, consider she may have eliminated her debt even faster, in retrospect. According to Kumok, one regret was how much money she’d spent in college rather than saving.
“I had money for going out and had plenty of money in college,” she said. But, “I spent money like an idiot. I could have saved more if I had a savings account. I just spent so much of it and thought, ‘No problem, I’ll pay off those loans when I get a job.’ But i didn’t know how much it’d pay when i got a salary.”
During undergrad, Kumok’s parents had covered her living expenses, gas, groceries, and utilities, freeing up plenty of cash that could have gone towards monthly loan payments.
Though she wasn’t in debt at the time, she “didn’t have the mindset,” Kumok said.
Kumok ultimately credits her parents’ candor about their own financial missteps in life as a critical influence for her own financial awareness.
“My parents always talked about their personal finances as they related to their own lives,” she said. “It just interested me that they were always open about their mistakes. I was able to see how being in debt affects you firsthand and affects the ability to have the life you want.”
Helping others avoid student loan debt
The experience of aggressively paying down her student loan debt was so profound that Kumok has since become a crusader to help others do the same. Now a full-time freelance writer, her blog, DebtFreeAfterThree.com features articles and tips on how to maximize one’s finances, save money, and escape from debt.
“For everyone, there are really two strategies to pay debt: usually spend less or make more,” said Kumok. “I would really encourage people to make more money, whether it’s negotiating a better salary, getting a bonus, finding a way to make money on the side.”
That may include anything, she says, from saving $100 by eating out only once a month, or getting a part-time job at the mall. For the recent college grad, it may not seem like much. But over time, when your momentum builds, you’ll see the impact it can make in paying down your debt.
“It’s like dieting,” she said. “We all know you should exercise and eat less and burn more calories than you eat. Yet this country is obese. It’s the same with money; you just spend less than you make, yet the whole country’s in debt. It’s simple, yet requires a lot of hard work and discipline.”
Don’t beat yourself up for taking a bit longer to pay down your student loans. Everyone’s balance, interest rates, income, and financial situation are different, so work at your own pace. What’s important, according to Kumok, is not the speed in which you eliminate your debt, but having a realistic goal in mind to attain.
“I would say definitely having a goal in mind is good,” she says. “It’s really easier to say, ‘I’ll pay them off sometime.’ For me, I knew when I sacrificed something, I knew what it was going towards. If you don’t know where it’s going, you don’t have the motivation.
“I think we all need to see there’s going to be a light at the end of the tunnel.”
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