A writer who had $60,000 in student loans says it took him 5 years to make the mental shift he needed to pay them off before turning 30
- Personal finance writer Tim Devaney graduated college with more than $60,000 in student loan debt.
- Devaney contributed more than $600 a month towards his student loans for five years before he refinanced and consolidated them.
- Then Devaney's girlfriend created a spreadsheet to identify where he could cut back, which helped him double his monthly payments.
- He was hesitant to give up spending money to socialize, but realized it wouldn't affect his most solid friendships.
In his 20s, Tim Devaney was a self-proclaimed spender, ate out twice a day, and would purchase Groupons he never used.
The first five years after graduating college in 2010, Devaney considered movies, drinks, and dining out essential to life, he told Business Insider. But he needed to be frugal, he had $60,000 in debt looming over his head.
Americans owe more than $1.4 trillion of student debt. As student loan borrowers age, debt often grows thanks to interest, according to an analysis by Credit Karma. People aged between 22 and 32 owe $28,706 in student debt and it only goes up from there. Devaney owned more than twice that when he graduated college.
Devaney received his first student loan bill in November 2010 after graduating from Cornerstone University in May of that year. He started off paying between $600 to $700 a month, a number he considered "low" for the amount of debt he carried, even though he knew friends who contributed half that amount to their loans, he told Business Insider.
Devaney's parents couldn't financially support him throughout college and told him that no matter where he enrolled, the price of a college education would be expensive and long lasting. Devaney's mom told him to focus on passing classes instead of worrying about the numbers.
"It didn't really hit me how difficult it was going to be going into it, until I got out of school and then that's when I realized, man, this is going to be the rest of my life if I don't make some changes with my spending," said Devaney, who's worked as a politics and finance reporter and now writes about personal finance for Credit Karma.
His parents couldn't help him pay off his loans post-graduation and Devaney was struggling to keep his head above water.
To save money, Devaney moved into a one-bedroom apartment in Washington, DC, one of the most expensive cities to live in, and let four other guys move in. They slept on a queen bed, bunk beds, and the floor.
Devaney also tried his luck riding a bike as an Uber Eats delivery man, which earned him next to nothing. His efforts weren't enough to wipe out his loans.
Time to 'get serious'
About five years after graduation, Devaney decided to refinance and consolidate his loans, which numbered near a dozen. Then his girlfriend made a spreadsheet to breakdown his spending habits and that's when he decided to "get serious," he said.
"My spending was out of control, but it was the first step toward helping me get control of my finances because I knew what I had to do," he said.
Devaney was reluctant to cut social activities with friends, but finally realized, "if they're your good friends they're still going to be your friends even if you can't go to the bar and buy a beer that costs two times as much as you would pay at the grocery store," he said. "Those are all the things that I did spend money on, but eventually I just realized I had to give it up."
So he cut back and was able to nearly double his monthly payments to $1,250.
"Before [consolidating] it was like, which of these loans should I try to pay off first?" he said, "but now that they were all in one lump sum it helped me focus on just paying that off and getting me out of debt."
Devaney paid his last student loan bill in January 2018 and turned 30 in May.
"A lot of people hear what I talk about and they want to do it, but it takes hard work and difficult decisions that ... I wasn't willing to make for five years," Devaney said. "So I understand where they're coming from, but it does take that hard work."