Kelly from Immigrating With a Purpose reached out to me with this amazing financial journey. I am happy that she can share it with us! Very badass. She takes travel, wanderlust, and teaching and makes her student loans go away…fast.

Sidenote: If you have a financial struggle that you have overcome, email me at kara@thefrugalfeminista.com and I will share it with our Frugal Feminista family .-K 

Let me start with a confession. In 2008, I graduated with a B.A. in English, a minor in Education, a teaching license, and over $100,000 in debt. A hard worker in school, I wanted to go to a top-notch university even though my family could not afford those top-notch prices. When the planned for scholarships did not flow in, I turned to student loans.

This influential decision my 18 year old self made leads to the first lesson that would get me to a point where I could pay off $44,000 in student loan debt in just under two years.

Lesson #1: Get realistic about your finances.

It was clear before I ever signed on any dotted line that I could not afford the undergraduate institution that I attended. Waiting for a windfall to come in whether it’s via a scholarship or a generous relative is not a financial plan, and no financial plan is a plan for potential financial disaster.

A year after moving to the expensive New York City with two suitcases and debt, I lost my job. This forced me to sit down with my $800+ monthly minimum payments and analyze my relationship with money. Money was a dirty word for me that was a source of stress and shame. How could I rack up six figures worth of debt on just an undergraduate degree? Because of the negative feelings I had in regards to money, I would quickly end any conversations about finances just to avoid emotional discomfort.

One tool that helped me confront my debt head on was LearnVest, a financial planning company geared towards women. I found a new teaching job, tracked my expenses using the company’s online software, and attended its very first LearnVest LIVE financial empowerment seminar. I never paid for any of the company’s add-on services, but I did get the free 15 minute phone call from one of its financial planners. In the nicest of terms, this financial planner told me that I wasn’t being realistic concerning how quickly I wanted to pay off my debt, which leads to the second lesson.

Lesson 2: Set a SMART goal

A SMART goal is a target a person sets for her future. It is specific, measurable, attainable, realistic, and timely. There’s a difference between me saying I want to pay off my student loans vs. I want to pay off 25% of my student loan debt within the next year. While on a teacher’s salary in New York City, there was no way I could reach this SMART goal. Something had to change. Thus, I created a new SMART goal: to land a teaching job abroad in one year so that I would be in a position to pay off 25% of my student loan debt in a year.

Many international schools pay a teacher’s rent and subsidize utilities. This would free up at least an extra $1,000 a month for my debt payments! In July, 2013 I hit my revised SMART goal when I moved to Valencia, Venezuela to teach. The school that I worked at even paid my transportation costs too. These factors coupled with a dramatically lower cost of living caused me to go from paying the monthly minimum on my loans to being able to double (sometimes quadruple!) my monthly payments while abroad.

Now, I completely recognize that not everyone can pack up her belongings and move to an international locale. I am a single woman with no kids. Yet, are there other more feasible changes that fit the current stage in your life? For example, before making the drastic decision to leave the United States I had moved to a smaller apartment, changed my hairstyle to one that was cheaper to maintain, and cut out “nece­­­ssities” such as Brita water filters. When I decided that these positive financial changes were still not enough for me, I then headed abroad. The point is to find a way, no matter how small, to cut costs and put the extra money towards the loan payments.

Lesson #3: Stack ‘em, Pay ‘em, and Track ‘em

When there’s a ton of debt to wrangle, you have to get strategic. I chose to create an organized stack of all of my loans from highest interest rate to lowest interest rate. Then, I paid the monthly minimum on all of them. Any extra payments I made went towards the loan with the highest interest rate not the smallest loan. I knew getting rid of the high interest rate loans faster would save me more money over the long term.

After stacking and paying my loans, I track them. If you’re trying to lose weight it’s suggested that you track (re: write down) what you eat. Similarly, if you’re trying to “lose” debt, you have to track how much you’re putting towards it. I created a color-coded Excel spreadsheet. The spreadsheet box would turn red, yellow, or green depending on if I paid at least the minimum amount that would help me reach my SMART goal. This spreadsheet keeps me accountable when I slip up and is a source of private celebration when I do well.

Lesson #4: Treat Yourself, not the Joneses

            When working hard it is important to treat yourself and celebrate the small successes. However, this comes with a caveat: treat yourself and not the Joneses. Maybe you can afford a pedicure at the local shop while Mrs. Jones goes to the diamond hotel for her pedicures. Don’t worry about it because you know what your goals are, and getting a fancy pedicure is not a part of your long-term goal.

I have to remind myself of this lesson too. As a teacher at an international school, the majority of my colleagues (re: the Joneses) go on multiple international trips a year. I try to travel within the country I’m living in and may go on one international trip because right now I can’t afford to jet set around the world. It just so happens that the year I turn 30 is also the year when I’m expecting to pay off the last of my student loans. When Sallie Mae/Navient receives its final payment, I plan on taking a multi-country tour of a region with money I’ve saved. Until then, I go to my parents’ house during the summer, apply for professional development in different locales that my school pays for, and keep my eye on the prize: living debt free.

Kelley (@withapurpose) is a secondary educator who has taught in New York City and Valencia, Venezuela. This month she will be moving to Jakarta, Indonesia to continue teaching. She blogs at immigratingwithapurpose.com, a Black Weblog Award-nominated blog that discusses race, travel, and the teaching profession.

Frugal Feministas– What are you doing about your student loans? What other lessons can be learned from Kelly’s financial strategy and vision?

“If you’re drowning in student loan debt and want support, strategy, and guidance on how to accelerate your student loan repayments, then join our 5-Day Slay Sallie Mae Challenge. 

If you’re waiting for a sign that it’s time to make a change, consider this it. Money Therapy may be just what you need to break through your financial blocks and release your money guilt and shame.