At 23, speech pathologist Sarah McGowan paid off $36,262 in student loans in one year and eight months. Her secret weapon was simple: gratitude, frugal habits, and pretending she didn’t have money.
In this series, NerdWallet interviews people who have triumphed over debt. Responses have been edited for length and clarity.
1 Meet Sarah McGowan
How much: $36,262 in 1 year 8 months
When Sarah McGowan was 23, she already had a master’s degree and was working in her first career job as a speech pathologist. She also lived with four roommates, drove an old car, took every babysitting opportunity she could wedge into her schedule, and borrowed dresses if she needed to attend a wedding or other formal event.
She says she didn’t feel deprived. Her secret weapon? Gratitude. She reminded herself that she had everything she needed, including the energy and income to shed college debt right away.
“I don’t feel like I deserve it until I have paid for it.”
Her goal: Be out of debt by the time she turned 25. She’d earned her undergrad degree in three years to save money, and finished grad school with student debt totaling $36,262. It made her uncomfortable. “I don’t feel like I deserve it until I have paid for it,” she explains.
Sarah knew frugality well. She was raised near Chicago by a millwright father and a mother who stayed home with the children until Sarah was in fifth grade, then became a real estate agent. Sarah was the first in her family to go to college. Student loans were essential, and she was thankful for them, but she didn’t want to keep them around any longer than necessary.
After earning her master’s degree in May 2016, Sarah landed a job in her field and worked 24-hour weeks, earning $28.23 an hour. She picked up extra shifts at a satellite hospital and at a nursing home — those paid close to $40 an hour — and she continued to babysit at $15 an hour. She said she typically tried to work at least 16 hours per week at her side jobs. Her total income was about $65,000, she recalls. The following year, when she finished paying off her loans, she says she made about $72,000.
While her earnings were high, she kept expenses low. She was used to multiple roommates, working almost all the time and driving an old car, so she wasn’t giving something up, just waiting to have it.
She recently connected with NerdWallet to share her story, which may inspire your own journey to paying off debt.
2 The Debt and the Decision to Ditch It
What was your debt when you started?
A little over $36,000 in student loans, for undergraduate and graduate school. I graduated with about $200 to my name.
What triggered your decision to ditch debt?
I wanted to get out of debt almost as soon as I got in. I knew that being in debt limited choices, and that it was temporary. I also thought that I would want to stay home with kids someday, and I could save more once the debt was gone.
3 The Steps She Took
What steps did you take?
I was careful not to get used to having money, and I just pretended I didn’t have money. I just kept paying all that I could toward the loans. I didn’t have a formal budget, but I was saving about $1,000 a month, and then using the “extra” money to pay more on loans.
My first student loan payment was not due until November (after a May graduation). But I started my job in July, so I started paying off the loan in August, when I had a paycheck.
[Sarah checked her debt balance about once a month, watching the incremental drops until she owed about $10,000. Because she had also been putting money in savings, she realized she could make a final lump payment and be done, while still having just under $10,000 in savings.]
4 Staying Motivated Without Feeling Deprived
How did you avoid feeling deprived?
I tried really hard to keep a grateful mindset and to focus on what I did have instead of what I didn’t have. I wanted to get rid of the debt.
I talked to my boyfriend about what my goals were, and asked, “Can you be on board with this?” If anything, talking about it was a relief. He also had student loan debt to pay off. We went on a lot of dates that involved canoeing and picnics, or hiking and hot chocolate.
I still went on vacations. I love to travel, but I did it as cheaply as possible. I had saved babysitting money, and I went to Spain and Italy. I also used a $500 voucher from when I was voluntarily bumped from a flight to help pay for my ticket.
5 Life After Debt
How is being debt-free different?
I feel much more free. Now I can say no to a babysitting job if I want to. When I was in debt, I said yes to everything.
I feel more generous, because I have more.
I bought a Subaru. I saved a down payment first and I have a loan, but it’s at 0% interest and the payments are affordable. I also bought a violin and plan to start taking lessons.
6 Tips to Tackle Your Own Debt
If Sarah’s story has inspired you to take a look at your own student debt, she has some tips:
If you are paying off student loans, use direct debit — it saves a little on interest.
Start paying off your loans as soon as you have an income. Don’t get used to having that money in your checking account.
Continue to live as if you have not yet graduated. Even a year can help make serious headway. “Now I could never have four roommates,” Sarah says. But continuing to live with roommates made it possible for her to ditch debt much sooner.
And NerdWallet’s:
It’s best to have a written budget. It doesn’t have to be elaborate, but you want to track your spending and make sure your money goes where you want it to.
If your company offers a 401(k) match, contribute enough to take advantage of it. It’s free money.
As you pay down debt, also put some money in an emergency fund. Even $400 can be enough to keep an unexpected expense from adding to your debt load.
Photo courtesy of Sarah McGowan
Bev O’Shea is a writer at NerdWallet. The article How I Ditched Debt: ‘I Just Pretended I Didn’t Have Money’ originally appeared on NerdWallet.
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Frequently Asked Questions
How much debt did Sarah McGowan pay off, and how long did it take?
Sarah McGowan paid off $36,262 in student loans in one year and eight months. The debt came from both her undergraduate and graduate degrees. She started repaying in August, after beginning her first career job as a speech pathologist in July, even though her first payment wasn’t due until November.
What was Sarah’s main strategy for paying off her loans so fast?
She pretended she didn’t have money. Sarah was careful not to get used to having extra cash, kept her expenses low, and paid all she could toward the loans. She didn’t use a formal budget, but saved about $1,000 a month and put the “extra” money toward her loans until the balance was gone.
How did Sarah avoid feeling deprived while paying off debt?
She kept a grateful mindset and focused on what she had instead of what she lacked. She talked her goals through with her boyfriend, who also had loans, and chose low-cost dates like canoeing, picnics, and hiking. She still traveled to Spain and Italy using saved babysitting money and a $500 flight voucher.
How much was Sarah earning while she paid down her debt?
In her main job she earned $28.23 an hour working 24-hour weeks. She picked up extra hospital and nursing-home shifts paying close to $40 an hour and continued babysitting at $15 an hour. Her total income was about $65,000 the first year and roughly $72,000 the year she finished repaying her loans.
What tips does the article give for tackling your own debt?
Use direct debit on student loans to save on interest, start repaying as soon as you have income, and keep living as if you haven’t graduated. NerdWallet adds: keep a written budget, contribute enough to capture any 401(k) match since it’s free money, and build an emergency fund — even $400 can prevent new debt.
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At 23, speech pathologist Sarah McGowan paid off $36,262 in student loans in one year and eight months.
In this series, NerdWallet interviews people who have triumphed over debt.
How much: $36,262 in 1 year 8 months.
When Sarah McGowan was 23, she already had a master’s degree and was working in her first career job as a speech pathologist.
She says she didn’t feel deprived.
Her goal: Be out of debt by the time she turned 25.
Sarah knew frugality well.
After earning her master’s degree in May 2016, Sarah landed a job in her field and worked 24-hour weeks, earning $28.23 an hour.
While her earnings were high, she kept expenses low.
She recently connected with NerdWallet to share her story, which may inspire your own journey to paying off debt .
What was your debt when you started?.
A little over $36,000 in student loans, for undergraduate and graduate school.
What triggered your decision to ditch debt?.
I wanted to get out of debt almost as soon as I got in.
What steps did you take?.
I was careful not to get used to having money, and I just pretended I didn’t have money.
My first student loan payment was not due until November (after a May graduation).
[Sarah checked her debt balance about once a month, watching the incremental drops until she owed about $10,000.
How did you avoid feeling deprived?.
I tried really hard to keep a grateful mindset and to focus on what I did have instead of what I didn’t have.
I talked to my boyfriend about what my goals were, and asked, “Can you be on board with this?”.
I still went on vacations.
How is being debt-free different?.
I feel much more free.
I feel more generous, because I have more.
I bought a Subaru.
If Sarah’s story has inspired you to take a look at your own student debt, she has some tips.
Photo courtesy of Sarah McGowan.
Bev O’Shea is a writer at NerdWallet.
Sarah McGowan paid off $36,262 in student loans in one year and eight months.
She pretended she didn’t have money.
She kept a grateful mindset and focused on what she had instead of what she lacked.
In her main job she earned $28.23 an hour working 24-hour weeks.
Use direct debit on student loans to save on interest, start repaying as soon as you have income, and keep living as if you haven’t graduated.
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1 Meet Sarah McGowan.
2 The Debt and the Decision to Ditch.
3 The Steps She Took.
4 Staying Motivated Without Feeling Deprived.
6 Tips to Tackle Your Own Debt.
Frequently Asked Questions.
How much debt did Sarah McGowan pay off, and how long did it take?.
What was Sarah’s main strategy for paying off her loans so fast?.
How did Sarah avoid feeling deprived while paying off debt?.
How much was Sarah earning while she paid down her debt?.
What tips does the article give for tackling your own debt?.
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