Vested Wealth

Zero often gets a bad rap, especially in finances. No one wants to see a $0 bank account balance, right? But, a $0 balance notice from your loan company is a whole different story! When I got the email, I didn’t quite know what to do! I had longed for that day to come—dreamt about how good it would feel to not have Sallie Mae breathing down my neck and getting new notices that some loan has been sold to yet another company. Needless to say, I am happy to report that I am (student loan) debt free. The road was certainly not a straight shot. I dare to say that I hit some pot holes and needed some roadside assistance, thanks to the CPA in my life☺.

Some of the mistakes I made that landed me in student loans I’m sure are not unfamiliar to most. In retrospective, these decisions were not mistakes in itself but rather my lack of understanding of the financial impact of these decisions is the lesson learned. Some of the decision made include the following:

1. Going to a small private school for undergrad studies out of state—got scholarships the first year but like most private schools, these scholarships were only to lure me to the school. The scholarships dwindled over the years and I had to get loans to meet up with tuition demands.
2. Going for study-abroad programs (first in Jamaica then in Switzerland) and explored the world…at a steep price: some more loans!

Of course, I made better choices for my Master’s and opted for a state school (still out of state but got in-state tuition through my research assistantship) instead of a private school in Hot-lanta! Go Tarheels ☺. For my PhD, I didn’t even want to be tempted with pricey options; so, I only applied to one in-state school: University of Texas School of Public Health, Houston. Thank God, I got in (and saved beaucoup $$$)!

So, back to how I got my finances moving again, right? Here we go, buckle up!

Step 1: I became uncomfortable with debt. As I reflect on my life trajectory, I can definitely say that it took me creating enmity with debt to tackle my student loans. What does this mean? Well, the same discipline I had to cultivate in terms of not carrying any balance on my credit card helped me stick to the plan for paying off my debt. The biggest eye-opener (Ground Zero) was an Excel file I created in 2008 while I was completing my Master’s program to figure out how much I owed in total and how much interest was accruing on each balance. I called a family meeting to elicit some insights and devise a game plan of bimonthly contributions to the loan repayment project. This heightened awareness framed subsequent decisions (which I will get into later).

Step 2: Recognize intermediate successes. The joy I feel today started way back from that first loan amount I paid off. It felt so good to strikethrough the column and mark as “paid” in my Excel file. Also seeing the total balance change every time I made a significant payment was gratifying! This motivated me to pay down more loans faster in order to beat the accruing interest amount on the unsubsidized ones. Quick tip: Rank your loans based on type (unsubsidized vs. subsidized), amount, age, and loan provider to get a clear picture and keep a record of how to access each loan portal to ease the payment process.

Step 3: Time is money, literally. To tilt my debt-income ratio to a more favorable stance, I had to really think about how I was using my time 24/7. During the first two years of my doctoral training, I had a part-time research assistantship (RA) and I lived at home with my parents. The RA stipend was decent and it helped me with general upkeep; but I knew I wanted to earn more to tackle those multiple zeroes in my loan balance. So, I didn’t let myself get complacent. Thanks to the best parents in the world, my tuition was covered until my dissertation so my loan balance was not increasing due to PhD program. Then, I got a fellowship that not only paid my tuition but also paid me for doing my dissertation. The fellowship prevented me from keeping my RA job so I sought for an external part-time position to keep cash flow for loan repayment. In short, there was no outflow for tuition, part-time job earnings were decent and the time spent completing my dissertation was also compensated! After I graduated, I got a paid fellowship with the Centers for Disease Control and Prevention which qualified me for deferment of my loans as well—less pressure to pay a certain amount but cushion to pay large sums at a time while interest on subsidized loans were frozen (yes, pun intended). In addition to the CDC fellowship, I put my doctoral training to work as an online instructor so my downtime was income-earning. This sounds all fun and rosy but it was quite challenging. This was also a time in my life when work was in Atlanta (or Hot-lanta) and home was in Houston. This meant frequent travels between Atlanta and Houston. My time meant so much more to me and every minute on the clock was assigned to specific tasks—I came to cherish my iPad even more because I could use it to grade as I waited in airport security lines or in my uber ride home or to the airport!

In sum, I am grateful for my journey. I must say that I am definitely a changed woman. My relationship with money has evolved. If you are trying to pay off your student loan or any other loan, be encouraged! Fix your eyes on the prize and in the words of Dave Ramsey, If you live like no one else now (tackling your debts by sacrificing a bit here and there), you will later live like no one else (enjoying freedom from debts). A pop culture reference that you may be more familiar with is my favorite rap song hook of all times by the one and only Drake, Started from the bottom now we are here…debt-free.