If all goes according to plan, my last student loan will be paid in full this June. I'll be debt-free at 29.
The thing is, nearly $40,000 and eight years later, I know how to be in debt. Debt-free? Not so much.
I'm good at being in debt. I know how to juggle payments and budget for automatic debits and track my payoff progress. I know what I'm supposed to do with my money when I'm in debt: Use it to pay my debts down.
When I'm debt-free, what should I do with my extra cash? Save for retirement? Take a vacation? The options are overwhelming, and I'm afraid I'll make the wrong choice.
I feel like paying off my student loans represents some kind of line in the sand: On one side, it's O.K. to be unsure and unsettled. On the other side, it's not. I'm moving toward that other side, and I haven't made it to sure and settled quite yet.
How I got used to living with debt
My relationship with debt began at the tender age of 21, when I started my one-year master's program in education.
I was lucky enough to have my parents pay for my undergraduate degree, so the concept of being in debt was abstract, and I was blasé. After all, this was before the recession, when credit cards were handed out like candy bars on college campuses and everyone I knew was up to their eyeballs in debt. I quite literally didn't think twice about signing on to $25,000 in student loans, or getting a candy bar — er, credit card — and charging it to the max. I'd pay it off later, right?
By the time I started my first "real" job as a high school history teacher in the fall of 2007, I had come to rely on that credit card. Living in one of the most expensive zip codes in the nation, near Washington, D.C., didn't help matters. My rent ate up over half of my monthly income, and I had so many other bills to pay that I was barely able to make a dent in my debt.
Around the time I got that first job, I had taken out a personal loan to pay off my credit card debt at a lower interest rate than the card offered. Smart, right? Well, not if you turn around and charge your credit card up again...which, of course, I did. At the point that I realized I had almost doubled my debt to nearly $40,000 in less than a year — a low, low moment that led to my first full-blown panic attack — I vowed to get my finances under control.
Almost overnight, I started working more and spending less. I froze my credit card in a block of ice and switched to using only cash. I canceled my cable, stopped eating out and signed on to work in every after-school tutoring program that would take me. I even had a friend cut my hair to save money on salon costs. I had no free time and got very little sleep during those months, but I didn't care: I was going to pay off my credit cards or I was going to die trying.
My all-out effort to whittle it down
I used the extra cash to pay off my $6,000 of credit card debt, then my $5,500 private student loan, then my $10,000 car loan. I was good at being in debt, and I got really good at paying it off; I had become addicted to the high that came with cutting down the balance of a loan. I started to live for the pleasure of seeing a $0.00 in the 'total due' section of my online accounts. To be honest, I started to become a little insufferable after a while — I was a woman obsessed, and nothing was going to stop me from becoming debt-free.
However, I slowed down once my only remaining debt was $10,000 of my $18,500 federal student loan. I knew that at the end of my rapidly approaching seventh year of teaching I would be entitled to student loan forgiveness, because I was teaching at a Title I (high-poverty) school. So, ready for a break from the extreme frugality of the last five years, I decided to just make minimum payments until that time. Besides, my minimum of $219.72 per month was hardly a king's ransom — I could definitely live with that payment for a few more years.
Slowly, I started loosening the purse strings. I got my cable back, and rehired my hairstylist. I allowed myself to get takeout once a week and went on a few weekend trips. Life was feeling comfortable again, and much less stressful — I wasn't wasting money, but I wasn't driving myself nuts trying to conserve it either.
Then, about six months ago, I started thinking about how my life would be changing soon. My debt would be gone — for good. It suddenly occurred to me that I'd have to make real decisions about what to do next with my finances and, by extension, my life.
And that is when I started to panic.
Why it's hard saying goodbye
Deep down I know that the reason I'm not as enthusiastic about my student loan payoff as I should be is because those payments represent my last tie to early adulthood, a time when the world seemed full of possibilities and my optimism was endless, and I'm holding on to that tie for dear life right now. Because "full of possibilities" and "optimistic" are definitely not how I would describe my outlook at the moment.
Take, for example, my career. For the first five years of teaching, I was one of the happiest public educators in the profession. But recently, the job has changed substantially, in ways I don't particularly like. (Since I'm still reporting to the classroom every day, I'm not going to get into how, but suffice it to say that for the first time ever, I have to force myself out of bed in the morning.) I don't like this feeling, and I want to go back to the time when I was excited about going to work.
Plus, being student-loan-free means I'm old. Like, thirties-old. As in, I should have my life figured out by now. I should be married (which I'm not), have kids (which I don't), and know what I want to do career-wise (again, I don't — not anymore). I'm almost 29 and don't know what the rest of my life will look like.
The closer I get to the end of my student loan days, the more anxious I become. And then I feel silly for being anxious. I know a lot of people who would love to have the problem of not knowing what to do with their extra funds every month.
Pretty soon I'll have this $219 freed up, but I'm still not sure what to do with it. Sure, I'm planning to divert some of it to retirement and some of it to general savings (I guess that would become my emergency fund), but I don't have a "big thing" in mind that I'll save for next...and that stresses me out.
Instead of holding on to my student loans as a totem from a past I felt comfortable in, I'm going to have to start looking at the unfamiliar as inviting, and the foreign as an opportunity. I'll get there, but it won't be easy.
But then again, what about growing up ever is?
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