$160,000 “gift” from Cornell
A while back, I stumbled upon a blog where a Harvard MBA was going after his student loans ninja style – trying to pay off $90k of debt in 10 months. I shared a similar desire to get rid of mine as soon as possible. Cornell gave me two parting gifts when I left Ithaca, an MBA and ~$160,000 in student debt.
During business school, I made decisions to not dig a deeper hole for myself than I was already forecasting. I didn’t backpack around Europe/Asia, study abroad, or go on school sponsored treks. Instead, I spent most breaks with my then girlfriend while she was doing her residency in Rhode Island, visited my childhood friends in St. Croix, and took a road trip with friends to Montreal. I also decided to live with a roommate both years to save money. While classmates were spending up to $2,000/month on rent, I kept my housing costs to $850/month each year.
During my summer internship between the two years of business school, I lived in an art school dorm, paying $400/week for rent. By doing so, I was able to save about $10,000 before heading back to Ithaca. That money covered my second year rent. I received a signing bonus at the end of the summer and used it to pay for living/travel expenses, as well as an engagement ring for QL.
After graduating and moving to Chicago, I worked to pay down the loans as quickly as possible.
To avoid borrowing more money, I decided to rent and not buy a condo. Although it was more expensive than living farther away, I decided to live close to the office. I hate long commutes, and at my first job in Chicago after undergrad, I took a taxi to work 90+% of the time. By living close to the office, not only did I remove the urge to Uber to work every morning, but I also didn’t need to buy a transit pass, saving $100/month.
My goal was to keep rent+utilities below $2,000/month, and I accomplished that, paying ~$1,900/month. Compared to my friends in New York and San Francisco, I was paying up to $1,600/month less – that difference went directly to repaying the loans.
I ate breakfast at home most days. It was usually some combination of a banana, bacon, peanut butter and jelly sandwiches, and orange juice.
During the week and occasionally on Sundays, I ate dinner at the office (I think of this as more a curse than a blessing), and brought lunch once or twice a week.
On Friday and Saturday nights, I usually made dinner with the wife. It usually isn’t cheap since she loves seafood. We typically spend $80-100 making her favorite Vietnamese crab noodle soup. However, the pot would last all weekend and would have cost ~4-6x had we gone to a restaurant for the same amount of food. We’ve learned to be pretty good cooks at home and often prefer to make our own gourmet meals.
At the grocery store, I bought the fruits that were discounted that week. Because I was eating most of my meals at work, my grocery bills averaged $30/week.
When it came to entertainment, I avoided the Chicago nightlife most of the time. Aside from the occasional drink after work, I tried to get coffee or lunch with friends on the weekends.
QL and I also went to the movies only on Sunday mornings, when tickets are nearly 50% off. We avoided buying snacks at the theaters by eating before the movie.
With 10% of my salary in my 401(k), I was able to put everything else toward the student loans. Twenty-six months after graduation, I am debt free! Here is an annotated chart of the debt paydown over time.
In 2017, my wife and I have paid off a total of $270,000 in student loans. Here’s how she paid off $100,000 in student loans.