33-year-old woman who paid off $115,000 in college debt says 7 budgeting strategies helped her do it

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• Micah H., a 33-year-old nonprofit worker, has paid off six-figure student loans in 13 years.
• She started paying them while she was in college, then continued for several years.
• She used seven strategies to get out of debt.

Micah H. started paying off his student loans in his freshman year at UC Berkeley in 2007 at the financial aid office because I need to figure out how to pay for my education.'”

After studying social work at undergraduate and graduate level, Micah, who shares his financial journey on his YouTube channel, Adulting with Micah, began working in nonprofit organizations. During the first four years of her career, she planned to apply for forgiveness of her loans under the Civil Service Loan Forgiveness Scheme.

But, after watching her colleagues get rejected from the PSLF again and again, she decided to change course and focus on repaying her student loans on her own as soon as possible.

As of May 2020, the 33-year-old was debt free after paying off $115,335 in student loans.

Here are seven strategies Micah used to pay off his student loans.

1. She understood that the debt repayment process is a marathon, not a sprint

When Micah sees other debt repayment stories on social media, she says, “Sometimes when it comes to debt repayment, you hear, ‘I’ve paid off $200,000 in two years’ and c It’s like, “Whoa! You must have had a $500,000 job. That’s not normal for most of us.”

In contrast, Micah paid off his student loans while earning $100,000 a year or less. Here’s how much she’s earned over the past few years of her debt repayment journey:

“It’s a gradual incline,” says Micah. “I had been working on this project for 13 years, since the fall of 2007. It’s a marathon, not a sprint.”

2. Micah started paying off his student loans using his work-study earnings

Students in financial need may qualify for work-study programs, part-time jobs that pay students directly, although they have the option of using this money to pay for education-related costs.

Micah worked in the dining halls at UC Berkeley. She used her income to start paying the $13,000 in Parent PLUS loans her mother took out to support her education.

3. She had a scramble as a babysitter and worked overtime

Once she completed her undergraduate and graduate studies, Micah began working for the City of New York. She started working overtime and used the extra money to pay off her student loans. Micah also had a side hustle as a babysitter, earning an extra $400 a month on average.

According to records reviewed by Insider, Micah paid up to $2,000 more per month on top of his minimum payment of $938.

4. She refinanced her student loans to get a lower interest rate

Since Micah worked in the nonprofit sector, she qualified for student loan forgiveness through PSLF. However, she decided to repay her student loans herself because she noticed that her colleagues were not getting the forgiveness they had been promised.

Leaving PSLF behind, Micah refinanced his student loans through SoFi to lower his interest rate from 6% to 4%. Her monthly payments stayed about the same, but the lower interest rate shortened her payment term. Every year, Micah would ask to refinance his loan to lower his interest rate even further.

Her minimum monthly payments eventually dropped to $638 from $938, although she continued to make additional payments each month for the principal balance.

5. Micah packed his lunches and found inexpensive alternatives for hanging out with his friends.

“At the time, I was working in Tribeca, an expensive neighborhood in New York, “so I was paying $15 a salad. I can make salad at home and bring it to work.” Micah used the money she saved from eating out to pay off her college debt faster.

Instead of having expensive weekend brunches with his friends, Micah found other ways to socialize. “I’m very outgoing. My friends and I would just use free resources, like walking in Central Park.”

She also asked her friends if they wanted to come over for a home-cooked meal instead of going to brunch, or if they wanted to pre-game with drinks at her house instead of paying for drinks at the club.

6. She moved in with her then-boyfriend to cut costs

At the time, Micah was living in a studio apartment in New York City and his rent was $1,100 a month with an additional $500 for utilities. She moved in with her then-boyfriend (now her husband), Demetrius, and they split her $1,500 housing expense in half for a one-bedroom apartment.

Once her housing costs dropped from $1,600 to $750, she was able to invest the $850 saved each month in her student loans.

7. Micah rewarded herself every time she reached a milestone in paying off her debt.

“I still groomed myself throughout this journey because I felt like, to do this for three and a half years, I’m going to go crazy,” Micah says. After hitting the $10,000 milestone, Micah booked a trip to Japan to reward himself for his progress. On a smaller scale, she splurged on her $15 salad every other Friday to feel like she wasn’t depriving herself.

“I still needed to have small wins to stay motivated because otherwise it could be a very lonely and very defeatist process.”