This has been a greatly requested blog post amongst my close friends who, like me, were worried about paying down what felt like an insurmountable pile of student loans.
I paid off my $30.5K OSAP student loan in 2.5 years using only the following tips, working a minimum wage job as an intern then a restaurant host. To be clear, I paid rent that entire time and my own expenses (except a 4 month summer while living with my parents before moving to Toronto with my boyfriend). I had scoured the Internet at the time and found hardly any tips to paying off student loans, so I wanted to put together the following very actionable list that greatly helped me.
(PS: OSAP begins accruing interest as soon as you graduate despite the “6 month grace-period”. $1000 of interest accrued for me during this time when I could have started to pay it down. Less debt owing = less interest.)
This is how I did it:
Write a Dated Wishlist Before Buying Non-Essentials, Then Wait a Month
My absolute #1 tip for how I paid down my student loan is not earning more, it’s spending less. And no, this doesn’t mean you have to constantly go without and feel miserable, I mean making smarter spending choices.
Anytime you think of something non-essential you would like (with me it was often some trinket from Amazon: face brushes, sweat bands, jade rollers, press-on nails) I would write it down in my “Wishlist” (in the Notes on my iPhone) with today’s date so it’s out of my mind. Then I would wait a month before purchasing. This may seem like a long time but honestly it isn’t. Wait until you feel like you want it again and write down that date. If you still want it in a month, get it.
But honestly, 9/10 I would look at my list in the month and be like, wow. So glad I didn’t spend my money on that because now I want the cash more than that silly trinket. Which would eventually end up at Goodwill because they are actually useless…
All of these little items add up so quickly and that $100 here, $100 there could be making a real dent on your student loan. Bear in mind, this isn’t forever. It’s just for a little while – you can do this!
Even if for example, you think you need a new pair of say, black pants or shoes for work. STOP. Think. Is there any other item I already have that can work? Think long and hard about this. Riffle through your drawers, stand for a long time in front of your closet. Items like these can add up to $100-$200 and that’s money that could be making a big difference on your loan.
Stop Eating Out When You’re Alone
You would be shocked at how much the average young person spends on eating out. I’m not saying become a hermit and never go out and have a social life. But 9/10 you are buying food alone on the way to work, on the way home, while running errands because you didn’t think you would get this hungry while you were out and didn’t eat before you left the house. STOP.
Never Leave the House Without Eating/ Bring Lunch to Work EVERYDAY
Even if you’re going to eventually get food with people, consider a snack so you don’t end up ordering an app, main and dessert because you’re famished. Even if you think you will only be out for an hour to run an errand. You will get hungry, you will likely buy that chocolate bar or “quick” fast food item.
$12 here, maybe $12 later that day = $24 that day. $24 x 7 days a week x 4.3 weeks in a month is $722.40/month which could be making a huge difference on your student loan. Same goes for bringing lunch to work instead of eating out, this could make or break paying off your loan.
Bring snacks with you: DIY protein balls, granola bars, fruit that won’t smush in your bag/put them in a container (apple, navel orange, firm pears, grapes, cubed pineapple), PB&J sandwiches/wraps, DIY Bean Burritos (these taste amazing as a work lunch – recipe below), nuts/seeds, tuna pasta salad (follow top first comment in comment section of this recipe), turkey pepperettes, cheese & crackers.
Without fail – make sure you eat breakfast before work, this will make a big difference in making bad choices going out to buy food even if you brought lunch because your famished and craving-ridden. Also an easy to make sure you bring lunch everyday is to simply make more dinner the night before and have a rubbermaid container of it ready for you to grab on your way out the door.
Work lunch ideas that don’t suck: vegan mango quinoa burrito bowl; veggie burgers; bean burritos (recipe below); hearty burrito bowl w/ avocado, a protein (chicken, crispy tofu etc.), corn, mango, arugula, tomato, cheese, quinoa/rice, black beans/lentils.
4. If You Get a Lump Sum (Tax Return) – Throw It Toward Your Student Loan RIGHT AWAY
Of course, you should always keep a little savings, maybe $1000-$1500 just-in-case money for an incidentals that may arise on a rainy day but if you get inheritance from a grandparent or a tax return of $1000-$3000 – put it on your student loan and stop thinking about stupid purchases you could make with it. You can’t afford those things right now. If you’re taking the steps in this article, you will likely be out of debt in as little as 1 to 2.5 years, this isn’t forever. But a lump sum like that will make a big difference on getting that loan paid so just do it.
Get a Job With Tips/ Commission
A job may be minimum wage, however don’t forget about commissions and tips. This can make all the difference. Working as a full-time host at a high end restaurant, I was making on average $300+ extra a week just in tip out. Other jobs like working at the mall for higher end clothing stores and cell phone providers earn commission, potentially an extra $1000/month or more.
Budget yourself to live on your hourly wage and try and put all commission/ tips toward paying down your loan.
Get a Second Job/ Side Hustle
If you aren’t working full time, or even if you are but have weekends free, try and get a second job. This could be like it was for me, a second host job or anything. Rent out your second bedroom on Airbnb or your whole apartment and go stay with a friend or significant other for the night. I’ve known people who have paid their rent and then some with this method. Deliver for UberEats on your bike/car, sign up to be a dog walker/sitter on one of the many apps available. If you have a car: drive for Uber and Lyft, you can rent out for your vehicle Airbnb-style on Turo. Check Indeed to be a part-time personal support worker, nanny/babysitter, house sitter, Sunday school teacher, English teacher online, nighttime grocery stocker, or part-time night security guard.
KIJIJI is huge and has saveddddd my life in paying down debt. For one, its a great way to minimize and not be wasting items by throwing them out, but more importantly, it’s extra income.
Items sell best when you post them with a quality picture you took yourself rather than a picture from the product website.
Items that sell well on KIJIJI: name brand clothing/ purses/ shoes/ accessories; electronics such as old cell phones (restore to factory settings), headphones, chargers, old laptops (these may sell better on eBay as they are specialized), microwaves, George Foreman grills, chandelier/ light fixtures/ lamps, golf clubs, nice/large trash cans, mattresses/bed frames, Halloween costumes close to Halloween (trying to sell them any other time, they won’t sell well). Same goes for summer clothes/winter jackets (remember the time of year).
I make it easy for myself by asking people to come to my apartment lobby because sometimes when trying meeting up people – they don’t show/ are late and it takes a lot of my time. I just don’t mention my apartment number for security reasons.
I used to use eBay a lot but recently, their fees have gotten very high and people don’t buy nearly as much as they used to so items are hard to sell. I always list on KIJIJI for free and will delete and repost an ad myself rather than pay them repost it (just remember to delete the previous ad or KIJIJI will take it down as a duplicate). Also if an item is not selling I will lower the price a couple times and see if that makes a difference. Anything that doesn’t sell goes to Goodwill.
Use a Budgeting App like Mint to See Where Your Money is Going
I honestly wasn’t following a budget when I was repaying my debt, I would only follow the tips included in this post to stop frivolous spending before it even happened. Mint hooks up to your bank accounts (I basically always use credit or debit with purchases) and sorts them into categories including rent, transportation, restaurant, etc. I realized after using this app, I was spending almost the amount of my rent on eating out. I was absolutely floored, I had no idea. This was a great wakeup call to keep an eye on that.
This is why creating a budget can be helpful. Sort your expenses into essentials, nonessentials and junk and see what can be left out and put toward your loan. Also, apps like Mint can help suggest what a reasonable amount to put towards say, entertainment, is. Now you have a real amount to stick to this month which can be very helpful if you have trouble gauging that on your own.
Only Go To A Store When You Need Something, Stick To Your List!
Shopping in this day and age has become something of a sport and even a pastime. But when paying off debt, a little purchase here and there a couple times a week can wreck your payment plan.
Stop Shopping: Going to the Mall, Unsubscribe from Store Emails
Literally just stop it. I’m not saying cancel plans with friends who will end up at the mall, I’m just saying don’t instigate it if possible. Unsubscribe from emails from your favourite stores because they are too tempting. You can go on their website if you have a burning desire and re-subscribe by all means once your debt is paid, but for now try your best to avoid temptations such as these.
Approach Shopping like a Museum/ Art Gallery
Hear me out. Since the industrial revolution, consumer items have gotten cheaper and cheaper. And people can therefore afford to buy them more and more. But to be honest, most of the time we have wayyyyy more things than we actually use and it becomes stressful to clean and sort and put away and organize all this clutter in our life (and in our mind.)
STOP. Stop getting more. When you are at the mall with friends for example and you see an item you think is pretty, ask yourself – can I use this item 5 times? Can I ACTUALLY think of 5 times I can use this. Do I have others like it I could use instead?
I try to view items I see in stores like a item at a museum or art gallery. I can like it and appreciate that it is pretty, but I don’t need to go home with. And 2 months from now, more likely than not you will wish you had the money you spent on it more than the thing itself.
Shop at a Discount Grocery Store/ Fruit Markets: this may seem like a given but it had to be said. Many discount grocery stores may seem like the quality isn’t great but shop around to different ones in your area. The store closest to me admittedly isn’t the best but the store just beyond that one is in a high-traffic area so the food has a lot of turn over and the produce is therefore super fresh. I always shop at this store for that reason.
Also, stores like No Frills carry all the PC brands like Loblaws but is 30% cheaper for nearly every item. I like to shop at No Frills for most of my items and maybe hit Loblaws if there are any speciality items they don’t carry anywhere else and only buy those items. Stick to your list!
There is also a lot of inexpensive fruit and vegetable markets and Chinese grocery stores if you live in cities like Toronto. These can be super cheap for fruit and vegetables and have fresher items than grocery stores. Buying produce here can definitely help cut down your grocery bill!
On Saturdays, there is also a farmer’s market across from the St Lawrence Market in Toronto. If you wait until about 15-30 minutes before they close down for the day, a lot of fruits and veggies get discounted. This is great way to save at any farmer’s market.
Stop buying microwavable/ frozen/ processed goods: shop largely only the perimeter of the grocery store including produce, bread/ bakery, meat/meat substitute, dairy/dairy substitute, minimally processed/ canned goods (beans, fish), grains (quinoa, pasta). Leave the frozen aisle untouched and stop buying microwavable anything.
These foods are highly processed which of course usually means unhealthy but also, they had to pass through many hands to go from the farm to store and each of these checkpoints means a middleman. The more middlemen, the more the cost goes up because each of these people had to get paid. You will be shocked at how much lower your grocery bill will be when avoiding these items.
Buy in Season: fresh grapes, cherries and strawberries are delicious but in the winter, you will basically have to take out a loan to purchase these fruits. Be conscious of buying produce that is expensive. Weigh it before you get it and calculate on your phone how much it will be. Monitor your purchases at checkout and don’t be afraid to say you don’t want to buy something (I used to work at No Frills grocery store as a cashier, this happens all the time, it is no extra effort for me to just void the item). If your grapes cost $9 and you had no idea, don’t be afraid to say you want to leave it.
Don’t Be Afraid of Generic: start looking at prices of all items and pick the cheapest. Honestly, brands like “No Name” and “President’s Choice” used to not be very tasty when I was a kid, but now they are more than comparable. Just give them a try and if you don’t like it, you will know for next time.
Return Items: if you didn’t realize you bought something or notice it was incredibly expensive and it’s within the return date, return them. You can even return meat, dairy, fridge and freezer items but honestly, just try and use them because the grocery store policy is to throw these items out immediately, they can’t sell them. Don’t be a waster.
Choose the Cheapest Drink on the Menu (Learn to Like Beer)
Most of the time the cheapest drink is beer and it is really a life skill to learn to like it. I learned to like it at university on Wednesday nights at the campus bar. I literally thought beer was so gross, I would take a sip and chase with a nacho. But over time I grew to like it, it certainly is an acquired taste. And to be honest, not liking beer often makes you seem silly and picky. At university, you still had to pay an entrance kegger fee whether you drank or not (which is a waste) and even as an adult, dinner parties/ housewarmings etc. people will often stock beer and not much else. It can be rude to refuse, hence why I say this is a bit of a life skill to learn to like it.
Order a Main Course and Water Only
As a kid, this is the only way my parents would take us out to eat, which I found annoying until I started paying my own bill. Even ordering a coke with tax and tip, is a big difference on a bill. If you are only going out the eat with a friend and can avoid drinking alcohol, do so. It will save your pocket book.
Don’t Say No, But Think of Other Activities
Going out to a restaurant often seems like the only way to see friends as an adult but there are other things to do. You can go for a walk along some nice paths (with your dog if you have one), bring over a bottle of wine/cook a meal at your place and play some board games, watch a good movie together at home, go cycling or rollerblading, Frisbee/ spend time in the park with a picnic, free art galleries, hit a fitness or dance class together (there are often free yoga classes in any city if you google it). There are ways of socializing that are cheaper (and not so caloric haha).
Let me know if you use any of these tips or have any tips of your own to share in the comments below!
Happy budgeting 🙂