When you think about your student loans do you feel anxious, depressed, or trapped?  Does it infuriate you when you review your bill and realize that only about 50% of your payments are going toward the principal balance, while the remainder is going to interest?

Unfortunately, there is no magic secret to getting rid of student loan debt.  Lowering your payments by switching to an income-based repayment plan is not a good solution for most people – your payments will be lower, but you will be paying a fortune in interest over time.  Can you imagine being 50 years old when you make your final student loan payment?

It does not have to be this way.  You do not have to feel trapped and hopeless for the next 10 to 25 years.  Instead of avoiding your debt or stretching out your payments over a long period of time, why not try getting rid of that debt as soon as possible?

Dave Ramsey’s debt snowball approach has enabled thousands of people to break free from the chains of debt.  A “debt snowball” means paying off your smallest debts first, while making the minimum payments on your larger debts.  Once the smallest debt is paid off, you then move on to the next smallest debt, and proceed with this process until all of your debts are paid off.

The debt snowball is not easy.  It involves hard work and sacrificing the lifestyle you are currently used to.  But it is worth it.

Here is how you can use the debt snowball to ditch your debt for good and finally attain financial freedom.

Earn More

Paying off massive debt is difficult, but the formula is actually quite simple: earn more, spend less.  You can increase your income by finding a job that pays more, asking for a raise, working overtime, getting a part-time side job, starting a side hustle, starting a blog and monetizing it, or finding unique ways to make a little extra cash (like mystery shopping or filling out surveys).

Spend Less

The other essential part of the “get out of debt” equation is spending less money.  This may mean having to make difficult sacrifices.  How much you sacrifice will depend on a few factors – such as how much debt you have relative to your income and how quickly you want to pay off your debt.

Zina Kumok, the blogger behind Debt Free After Three, paid off $30,000 of student loans in three years while also finding room in her budget to travel the world during that time.  While that sounds amazing and her story is so inspiring, my husband and I have $117,000 of debt that we are trying to pay off in three years.  Because we have much higher debt, we need to make huge sacrifices in order to reach our goal.  We live with my parents, drive 16 year old cars that are paid off, do not travel, and are currently on a three year spending ban.

The sacrifices you make will depend on your unique situation.  If you can afford to travel the world and still pay off your debt quickly, go for it!  But if you are buried in massive debt, you may need to stop spending money on “wants” or find ways to reduce your major expenses – typically the biggest expenses are rent/mortgages and cars.  You may need to get a roommate, move to a cheaper location, live with your parents, keep driving an old vehicle, or sell your car.

Pay Attention to Timing

When I first started making extra payments on my student loans, I had no clue what I was doing.  Whenever I had any extra bit of cash, I threw it toward making an extra payment.  Some of my payments were large ($1,000+) and others were small ($200 or less).  Either way, making progress always felt rewarding.  It feels amazing emotionally to make as many extra payments as you can, but this is not the best decision to make financially.

One day, I was tracking my progress by reviewing the extra payments I had made on my loans and I realized something important.  The amount of interest I was paying on them varied dramatically – for some of the payments, only a few dollars was going toward interest, but on other payments, a huge chunk was going to interest instead of the principal.

I was not sure why, so I had the pleasure of sitting on hold with Sallie Mae for 30 minutes in order to find out what was going on.  I found out that this was happening because of when I make the extra payments – if I make them shortly after my regular payment is due, I only pay a small amount in interest.  If I make them 20 days after my regular payment is automatically taken out of my account, I pay much more in interest because interest has had 20 days to accrue.

Pay attention to your billing schedule, and make extra payments when the majority of your payment will go toward the principal instead of to interest.

Sallie Mae is Not Your Friend

Student loan servicers do not make it easy for you because they don’t want you to pay off your debt early – the longer you’re making payments, the more interest they can collect from you.  Do not listen to them if they try to talk you out of making extra payments or try to convince you to switch to a 25 year plan.

My husband was on an income-based repayment plan briefly when he was unemployed for a few months.  After he landed a job, he called the loan servicer to switch back to a 10 year plan, and the service rep actually tried to talk him into staying on the 25 year plan.  (Needless to say, he said no).

Many student loan servicers make it difficult to figure out how to make extra payments.  If you cannot figure out how to do this on their website, you will probably need to call them and sit on hold with them for 30 minutes before you can get an answer.  It is frustrating, but it is definitely worth the hassle.

Ditch Your Debt

You do not have to remain hopeless, depressed, and trapped in debt for the next 10 to 25 years.  If you are ready to ditch your debt for good, try the debt snowball approach.  To do this, you will need to earn more money, spend less, pay attention to the timing of your extra payments, and remember that Sallie Mae is not your friend.

The debt snowball is not easy – it will be difficult and it will involve hard work, but it will definitely be worth it.  You can achieve financial freedom.

What are you waiting for?


Other stuff you might like:

Why I’m Grateful for My Student Loan Debt
How to Pay off Your Student Loans by Volunteering
7 Things I Wish I’d Known Before I Started College
How One Millennial Couple Saves $25,000 Per Year
Frugal Frustrations: When I Feel Like Giving Up