Tips and Tricks I Learned On My (Sometimes Rocky) Path of Student Loan Repayment

Today I have a guest post from Jacob, a personal finance blogger at DollarDilligence.com, on a topic that I know many of my readers deal with – student loan repayment.

I couldn’t believe my eyes when I logged online and took a look at how much of my student debt I had paid off in the previous year. It was next to nothing. I hadn’t even missed any payments. To start the year, I had around $26,000 in debt and after 12 months of payments I hadn’t even gotten to under $25,000.

I couldn’t believe it.

My problem was that I was on an income-driven repayment plan that limited my payments to only 10% of my income. My interest was still accruing and I was barely putting a dent in my principal – a common problem with these kinds of plans.

That’s when I decided I needed to make a change. I completely changed my lifestyle and repayment plan, and vowed to repay my debt within the next year and a half.

I’m happy to say that I was successful, though it wasn’t fun. How did I do it? 

Moved in with My Aunt and Uncle

Moving in with family to reduce my expenses was one of the wisest moves I ever made. If you don’t have children yet, moving back in with mom and dad, or other relatives (like me), can be very helpful. You can devote all of the funds you would have to rent or towards a mortgage to lowering your student loan debt.

If you tell your parents or relatives exactly why you want to move back in, they will probably be more receptive because you’re doing the responsible thing. Many parents around the world deal with adult children wanting to move back in because life’s responsibilities are too much. This causes parents to have to exercise some tough love by refusing the move so they can force their child to take action on their own.

Other parents or relatives let their kids live with them and end up having an adult playing video games in the basement for hours on end.

When you ask to move back in because you want to pay off debt so you can live the life you want to live, there may be a good chance that you’ll get the support you need. It comes down to sacrificing luxuries, and living on your own may be one of those sacrifices.

What Moving in with Relatives Accomplishes

Moving in with your relatives doesn’t necessarily mean you aren’t going to have to pay living expenses. When you’re an adult returning to mom’s and dad’s, or aunt’s and uncle’s, humble abode, there is most likely going to be a trade involved.

In my case, I had to carry my weight. This meant cleaning up after myself and contributing something to the bills. Having another body in the house means an increase in water usage and electrical usage. Groceries also disappear a little faster.

In some cases, relatives request a little rent. However, this rent is going to cost much less than paying rent for your own apartment. Your relatives may request this to cover the increase in utility costs. You can also contribute to the food supply. Do a little grocery shopping on your own, but do it as inexpensively as you can.

You also have to make sure you do your chores. Do your share, and there will be no problem with your presence in the house. You want your relatives to be glad that you’re there. Being helpful is a great way to do that. Mow the grass, trim the hedges, fix some things, and be as quiet as possible.

Other Ways to Pay Back Student Loans

I’m not going to tell you that moving in with your relatives makes your life easier. The path can be rocky. I know mine has been, but I learned a lot on my journey. I kept my goal in mind, which is financial freedom and early retirement. Once in a while, I would be met with an obstacle. Perseverance and commitment make it possible to overcome those obstacles.

One thing I started doing was taking online surveys. There are many good sites to join that will actually pay pretty well. Survey sites that pay cash are fantastic for adding a little money to your income. Surveys have deadlines, but you can complete them in your time before that deadline.

I also took on freelance writing work. I love to write, and there is a huge writing market out there. Companies are always looking for writers to do different things for them. They need content for their websites or for other marketing materials. They hire writers to make sure it’s done right and to save them time. I found Upwork to be a great place to find work.

Taking on a second job can also be very effective. Don’t be afraid to take on a part-time retail job or deliver pizzas. No job is a bad job when it brings in money that you can use to pay down your student loan debt.

While you’re young, it’s ideal to use your time and resources to increase your income as much as possible. Doing something like moving in with your family can be a hit to your pride, but don’t let it be. At least you’re not moving in to sit on the couch all the time and eat their food.

Instead, you’re taking a very responsible step for your future. The same goes for getting a second job, taking on freelance work, and simply living a minimalist lifestyle. The money you save and the money you make will have your student loans down to a balance of zero so much faster than if you just made the minimum payments.

As someone who also moved in with their aunt and uncle (although for slightly different reasons), I can attest that it can be strange and awkward at times, but the months I lived with my aunt and uncle were also very special and brought me closer to them than I ever would have been before. Moving in with relatives is not the best option for everyone, but it can work out well for others.

Jacob runs Dollar Diligence where he blogs about debt repayment, saving money and side hustles. For more advice and content, follow him on Twitter.

What creative or different ways have you saved or made money to pay down debt?