• After a job loss and financial hardship, Ashley Patrick was determined to get out of debt.
  • She still had $ 25,000 in student loans to pay, so she and her husband were aggressive.
  • They paused their 401 (k) savings, reduced their expenses, and carefully tracked their payouts.
  • Read more stories on Personal Finance Insider.

For many of us, student loan debt can feel like a ball and chain that we drag around for years.

This is how Ashley Patrick thought about her $ 25,000 student loan. When her husband lost his job and the couple were unable to quickly repay a loan they borrowed against their 401 (k) to remodel their home, they owed thousands to the IRS – and they never wanted in again be this position.

"The fear of losing another job and the desire never to fill that position again was our motivator," says Patrick, 36, who lives in Charlotte, North Carolina and is the founder of Budgets Made Easy. "The student loans were our last loan and the largest amount."

To get the debt off quickly, Patrick and her husband made four changes to their budget – and they worked: they canceled the debt in 10 months.

1. They pause their pension contributions

At the time, Patrick and her husband contributed 11% to their 401 (k) retirement plans – Patrick put away 5% of their income and her husband contributed 6% of his salary.

In order to pay off their student debts as quickly as possible, both of them have temporarily suspended their 401 (k) contributions.

2. You sold unwanted property online

To raise extra money for debt, Patrick and her husband sold everything they didn't need, including some of their children's items, their wall decorations, lamps, and a few larger pieces of furniture. They also gave up a trailer and four-wheeler to pay off their debts more quickly.

While they were selling the large items to extended family members, they were selling smaller items that were lying around their house on Craigslist. In total, they made about $ 300 to $ 500 from online sales.

3. You reduce extras

While Patrick and her husband made $ 125,000 a year together, they kept their cost of living as low as possible to spend extra money on student debt.

To save on the monthly cost of living, the couple didn't buy anything they didn't need right away, including branded products. "When we've had the last two months, my husband said, 'If we're debt free, can we go back to shaving cream?' That's how intense we were, "said Patrick.

The couple also restricted travel and did not travel to Kansas to see the family, which saved them at least $ 1,000. The Patricks planned meals and rarely ate out, which helped them cut their food budget in half and only spend $ 600 from over $ 1,200.

To help her stay on budget, Patrick also used the cash envelope system where you put all of the money you need to spend on Category X for the month in one envelope.

4. She has kept an eye on her debt settlement journey

To stay motivated to aggressively pay off her student debt, Patrick calculated the daily interest rate on her debt to see if she was making progress. At the start of their debt settlement journey, their student loans were earning about $ 5 a day, or about $ 90 a month. That started making additional payments as often as possible, usually every week or two.

Patrick also kept a picture of her progress on her closet door and checked it out every day to keep fit. "To stay focused, I read stories about debt settlement every night before bed," says Patrick. "I've also joined like-minded Facebook groups and listened to podcasts."

Completely debt-free allowed Patrick to quit her stressful job as a detective and stay at home with her three young children. It also enabled her to grow her then-business to a full-time income while also giving her the flexibility to be with her children. "When things come up, I don't stress myself," says Patrick. "We just pay it and move on. In the past, when unexpected expenses arose, I would have cried for days and was stressed."

For those looking to cut their student debt sooner or later, Patrick suggests finding ways to cut and grow their income while staying motivated. "Just keep going even if you have a bad day, week, or month. It is progress over time that counts. "

source https://seapointrealtors.com/2021/07/24/4-strategies-millennial-used-to-pay-off-25000-of-student-loans-fast/

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