What I did to pay off $28,300 worth of student loans in less than 2 years.

Thank you, OSAP, for my education. I don’t think I could ever pay you back.” – Broke, unemployed 22-year old me, fresh out of university.

Here is the magic formula:

1. Switch to a low to no interest loan

You will never pay your principle amount if you keep accumulating interest and you would end up paying even more than your initial loan amount. This is where compound interest DOES NOT work in your favour. I was fortunate enough to have family help me pay off OSAP first, and then I would pay the full amount back to them. Effectively, having a zero interest loan. Thanks fam.

2. Budget, budget, budget

Never go to war without a plan.” – Sun Tzu, The Art of War.

Joking. I don’t even know if the book said that. However, that does not change the point.

You are in this for the long run. Paying off your student debt is like a marathon where it requires patience, pacing, and a lot of stamina. It’ll be all motivating at the start like the first 2KM – 5KM, but afterwards, it is so easy to slip and fall to old habits, spending away what could be going towards your loan. Plan exactly where each dollar should go before every month, which leads me to my next point of execution…

3. Set an aggressive monthly minimum amount

My minimum amount was determined by calculating how long I want to realistically take to pay off this loan. (I.E Loan amount ÷ # of years ÷ 12 months) I averaged about $1,600 – $1,800 a month, depending on the month’s financial situation.

4. Decrease expenses

There are two parts to this: A) Reoccuring expenses and B) Other expenses.

A) These would be expenses that would repeat month over month. Living at home and commuting via public transit meant that I could save some money by paying a lower rent and transit rate. Then, I put the difference towards my loan.

B) Other expenses would consist of going out to eat, shopping for clothes, etc. I am guilty in this area where spent a bit more than I should. Going out with friends and clothes were weaknesses of mine. Looking back, there were many occasions that I said ‘yes’ to, but there were many more instances when I had to say ‘no’.

5. Little to no savings

Honestly, this is one of the dumber things that I did in order to dump more money into my loan. I only did this, because my landlords were my parents.

6. No vacations

Plain and simple. I have not traveled for leisure or gone on a vacation since graduating and started working at my first full-time job.

Stay-cations ALL THE WAY.

7. Delay major purchases

Sony Vaio & Samsung Galaxy SIII

My 6 year-old Sony Vaio and 7 year-old Samsung Galaxy SIII.

I staved off major purchases till I neared the end of my loan. Here, you see my 6-year old Sony VAIO laptop that kept blue screening and slow AF Galaxy SIII that constantly crashed, dropped calls and no longer connect to wifi, among a plethora of other issues. Despite these issues, I kept holding onto them, because my budget could not take the massive hit of new purchases.

And that’s it! The truth of the matter is, there is no magic solution to student debt.

Decrease spending, increase loan payment.

I admit that I could not have done it all on my own. I had help in terms of family giving me a lower rent rate, and giving me an interest free loan. This helped significantly. The rest was on my own when it came to planning and putting money aside to ensure that I was on track to pay everything off as quickly as I can.

Best of luck and I’ll see you on the other side!

Loan Payment #22

This post is to officially announce that I paid off my $28,300 loan on March 15, 2018!

FREEDOM never tasted so sweet.

I woke up exactly at 5AM to check my paycheck deposited in my bank account. Then, made the final transfer of $1,800.

In all honesty, I did not feel any different. It didn’t seem like as if I paid off everything. Instead, it was just like any other payment. I have a feeling that it will truly hit me in April when I can actually keep a large sum of money for the first time in two years.

No Buy – February 2018: What did I buy.

I put myself on a ‘No Buy’, for clothing or new tech, after setting a personal record in spending during the holiday season and noticed that I had spent a little over $3 000 on clothing over two years. It helped that work kept me in the office all February and out of stores.

To put it into perspective, that’s essentially two months worth of student loan payments. TWO MONTHS. I can’t even remember what I bought or how much I wore the items. Lesson here is, everything adds up and know your habits.

Clothing is my weakness. Back when I was younger, we would only have one shopping trip a year and that is because our grandfather wanted to treat us. My folks were (and still are) incredibly frugal as they came as immigrants with barely anything. So, now that I have disposable income, being able to buy clothing gives me a sense of freedom to do what I want and have what I want.

My ‘No Buy’ is not meant to deprive me of enjoying life but rather train healthy, financial habits. I like how I use to only buy clothes once a year, it made the purchasing that much more special. On the other hand, you can’t save as much money because certain items are cheaper during the end of certain seasons. In order to not pay ticket price and recreate the occasional purchasing trip, I have a list of pre-approved items:

  • Black Chelsea boots with 2-inch heel (specifically the Coach BOWERY boot) – $470
  • White blouse (Uniqlo) – $35
  • White flowy, button-down shirt (Uniqlo) – $35
  • Red dress (or any one-piece in that tone) – $100
  • Black blazer – $80
  • Black pair of jeans, solid, no-distressing (Levi’s) – $80
  • Merino Wool crew-neck, knit, sweaters x 2 – Uniqlo ($80)

Notice that most of them have a specific store assigned already. That’s from me doing research on what exactly I am looking for and prevents me from wandering off and seeing other things. These are all officewear as I have more than enough of ‘university/lounge-wear’ and not enough professional outfits. I identified that these should be the remaining pieces to have a well-rounded office wardrobe that I can wear many times over.

Finally, I think it would be really interesting to document what I wanted to buy and what I did end up buying this month.

What I bought:

  • Treated family to dinner
  • Reunion dinner with high school friends
  • A chicken soup because I felt sick that day
  • Tea x 2
  • Weekend Cottage/Snowboarding trip
  • Gift for Dad’s birthday

What I wanted to buy, but didn’t:

  • Gold chevron ring ($60.00)

F*cking up at work: What to do when you screwed up.

I’ve f*cked up at work. You f*cked up at work. We’ve all f*cked up at one point in our professional career.

How do you get over that sickening feeling that comes over you when the ball drops? A chain of thoughts go across your mind, over-running rationale and logic, before you can even grasp the true magnitude of the scenario. You’re probably already jumping to the worst case scenario.

There goes my reputation.

I let my boss and team down.

Am I going to get fired?

I learned that when you know that you screwed something up at work, there are a few things you must do:

1. Take a short walk. Drink water. Breath. Do not cry.
2. Assess the magnitude of damage.
3. Find a potential solution.
4. Loop your manager in with the assessment and contingency plan.
5. Execute on said plan.
6. Implement a better process to ensure that it won’t happen again.

We always think about the worst case scenario to prepare ourselves emotionally for the worst. However, this only prevents us from focusing on what can be fixed. In addition, we are our own worst critics. You would beat yourself for missing a deliverable when it is not the end of the world. It’s bad, but not to the level you are hitting yourself over and over again.

Nowadays, I change my mindset by thinking “This isn’t too bad. Anything can be fixed. It could be worse.” Having this in mind allows me to decrease the time spent self-deprecating and increase more proactive, solution-oriented thoughts. It is hard to think that way, but that’s part of growing more resilience in the face of adversity.

Why I pay rent when living at home.

Yes, I pay rent when living at home and I think it is the right thing to do.

No, the money is not going back to me sometime in the future. My folks are not holding it for safe-keeping for me.

Two main reasons:

1. I am a working adult who has a job and I am using their space.

If I am contributing to the monthly utility bill, eating food, and utilizing a room that they could have rented out, I think it is only fair that I pay my share. My folks are paying for the monthly mortgage and groceries, so it is not like they are skipping out on paying their part of living expense.

2. Teaches me to live realistically.

Because I am paying rent already, my monthly expenditures already have a buffer for rent. If I were to move out, it would not be as much as a shock to my budget as not having paid it at all. I am use to living with a certain amount of disposable income after basic needs are accounted for.

All in all, there is a sense of pride of being independent and self-reliant because of my own finances.

Alone but not Lonely

I think I’m finally okay with being alone again.

I realized this on Valentine’s Day, probably the cheesiest time to hit this kind of epiphany, but I swear, it was that day. I was suppose to have a date on February 15th, but they bailed on me. Instead, in a surprising turn of events, I ended up having dinner with a VP from my company. We discussed industry trends, company life, and my career aspirations over a great Mediterranean meal.

The evening turned out to be a lot better than I had originally planned and I thought about this.

Would I have been able to take such a spontaneous opportunity if I had a commitment to a partner?

We went our separate ways and I stood waiting for my late train at the subway station. I have not seen so much innocent PDA ranging from putting one’s arm protectively around the other’s shoulder, or giving loving pecks on the lips and forehead. These actions made me smile. I didn’t know I was until I caught it myself.

I didn’t see these actions with envy. I was genuinely happy for them.  There was no feeling of needing someone myself to join the festivities. I’m standing just fine on my own and doing things on my time. That is the kind of freedom I had from being single for so long. You don’t have to think about an extension of yourself. Sounds a bit selfish, but being single means I can make decisions without accounting for another’s feelings or opinions – have 100% focus on my own development.

At this point of my life, that’s exactly what I need and want.