To college graduates saddled with student debt, reaching a day when they don't have to make a monthly payment may seem far off, especially since U.S. Senators are still paying off their loans.
However, Brian McBride, an associate producer at CNN and a 2010 graduate out of Arizona State University, managed to pay off $26,500 in debt in just two years. He explained his plan on CNN Money's website.
McBride owed $20,500 in student loan debt and $6,000 for his 2003 Honda Civic. He said he tackled his car loan first to pay down a higher interest rate during a six-month grace period following graduation on his student loans. In his first job out of college as a local reporter in Green Bay, Wisc., he lived frugally while working for $13 an hour.
After taxes, I was taking home roughly $1,900 a month and spending roughly $1,300 of it on rent, utilities and other living expenses. My goal was to save $1,000 a month -- so I scaled back.
Even while working 10- to 12-hour shifts, I'd skip meals -- eating a protein bar or drinking Ensure shakes to get me through the day. The occasional "splurge" entailed spending $5 at McDonald's for a Sunday breakfast of hotcakes, sausage and two hash browns.
He moved from Green Bay to Atlanta where he began making $25 an hour in a new position with CNN. Instead of loosening his belt, he resolved to pay down the debt faster than ever through personal austerity measures:
I got rid of cable and replaced it with an AT&T U-Verse Internet connection and streaming Netflix account -- slashing my bill from $135 to just $55 a month. An employee discount helped me cut my cell phone bill from $100 to $70 a month. And by living only a couple of miles from the office my commute cost me just $40 a month in gas.
These days, McBride now has reason to celebrate like students featured in a recent Wall Street Journal article who throw "Finally Paid Off My Student Loans" parties. They, like recent Harvard Business School graduate Joe Mihalic, consider themselves debt intolerant in a time when student debt has eclipsed credit card debt. Mihalic paid off $90,000 in seven months. McBride offered his reason to live modestly at first.
"Even though I'm pretty much back to where I started when I first arrived in Atlanta -- with just about a couple thousand dollars to my name -- I still feel like I hit the jackpot."