Getting rid of your student loan debt quickly should be on every dentist’s or other professional’s to do list. I have talked about student loans several times before and will continue to do so. After all, it is called “The Debt Free Dentist”, and one of dentist’s, physician’s, and many other professionals’ biggest debt is student loans.
I challenge you to get rid of your student loan debt within 3-5 years after training. I am borrowing this recommendation from The White Coat Investor, but it is so important I have to share. No matter how impossible this seems, I assure you this is possible.
My Journey to paying them off
It actually took me 5 and 1/2 years after training to pay them off. I did’t even follow my own advice right? Well, not totally true. I didn’t even know that was possible or a thing until a few years ago when I found the White Coat Investor. My original plan was to do IBR and pay the minimum for 20 years and get them forgiven. This was my plan for two reasons:
- My income wasn’t really enough money to pay more than the minimum. The minimum payment is large when you have over $400,000 in debt at 8%.
- I didn’t want to continue to sacrifice and wanted to spend extra money on other things, like a house, cars, vacations etc. As a new dentist I thought I deserved nice things. No one wants to live like a pauper and die rich.
How wrong was I. That was no way to get to financial security and freedom. I knew the first thing I had to do was make more money. I took advantage of some geographic arbitrage and moved me, my wife, and my children to a place that we had never been before and didn’t know anybody. However, it was a place were my income went up significantly. During this same time I discovered the White Coat investor and the philosophy of “living like a resident” until student loan debt was paid off. I purchased two practices and worked them both almost everyday. This meant I was at work for 12-14 hours a day for about 21 months and even. These things were sacrifices. When I moved I still had over $400,000 in student loan debt. 3 years and two months later, I was free from my student loans.
How I did it
Get the whole story here. But to sum it up, I moved to a place that I could make more money, I worked more than full time for a while, and I had strict budgets and lived like a resident. I followed principles learned from The White Coat Investor, The Bogleheads, Jonathan Clements, among others. I can’t tell you how good it feels to be free from that bondage. My life is so much better and I am so much more at peace having destroyed that debt. I am still not totally debt free, and I am not yet financially independent, but I have a plan and am on my way.
Why should you pay them off that quickly?
Some dentists or others may think that they have already gone so long “without” that by the time you are done with training, you want to splurge. You don’t want to go “without” any more. But I can assure you that spending more money won’t bring happiness. Maybe spending a little more. Maybe having a couple small wants is ok. What will truly get you to be happier and more at peace is having your financial ducks in a row. Money problems is a huge contributor to divorce, stress, and burnout. If you are truly concerned about your overall wellness, it is not only sleep, exercise and healthy eating that help. Your financial wellness is a HUGE contributor to your overall wellness
I will discuss more about burnout in a later post, but it is a very real thing. There are multiple contributors to it, but financial problems can be a big one.
If you stay the course and live frugally to pay off your debt, there will come a time when you can loosen the purse strings a little and enjoy more things. You will be able to go on those vacations, and buy that car and/or dream house. However, purchasing these things can actually bring you some joy and happiness if debt isn’t tied to it. If you have your debt paid off and then save to buy these things in cash (maybe not your house) then these things will add to your joy and not to your stress.
Steps to Get Rid of your Student Debt
Here I will discuss a list of things to do to start paying your loans off. If you are in the military and they are paying for it then great. If not, then here are some tips to get started.
- Decide if you are going to go for Public service loan forgiveness. I didn’t do this and I don’t know much about it. But make sure you are doing this correctly if you are doing it.
- If you are not going for public service loan forgiveness and you are not in the military then you must pay them off yourself. Start by refinancing your student loans. You will likely get a much better interest rate and will save thousands over the life of your loan. I used Laurel Road. But there are several good ones. Just compare interest rate offers and take the lowest one. Some examples are Laurel Road, SoFi, Splash Financial, Commonbond, and Ernest. I am sure there are even more.
- Put yourself in a position to make more than the average for your job or specialty. I know money isn’t everything, but man it helps. Make sure you have the skills you need and then be willing to look outside your comfort zone for a job. You can always move back to your extended family after you’re more financially stable.
- Live like a resident. Come up with a budget and a plan to destroy your student loan. Your budget will have to be tight in a lot of areas. It takes discipline. But you can do it.
Follow these 4 steps, read some finance books, review your plan monthly, and make sure you are on the same page as your significant other. If you do these things, you will get rid of your student loan debt faster than you though possible and will be on your way to a life of financial freedom
-Debt Free DDS
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*Nothing on my website is professional or legal advice. I am only sharing information that I have learned and it may or may not be accurate. I am not liable for any problems you may have by following this advice. Please do further research and get professional and/or legal advice about any of these topics. This post likely contains affiliate links. This site could be paid for clicks or purchases made through these links.