May of 2017 will mark three years since I graduated from college. I was so blessed to have attended a highly ranked, private university and as I get older, I reap the benefits of my alma mater more and more. However, like most millennials, I graduated with a nice chunk of debt.

If you are among us student loaners, I highly recommend checking out my friend Josh’s brilliant Student Loan Refinancing Guide.

My debt wasn’t so much that I’ve since felt suffocated or there is no end in sight. But, it’s certainly a big part of my life.

Up until recently, I’ve felt relatively neutral toward my student loans. I’ve chosen to pay them at quite an expedited rate to get them out of the way faster, paying about 20% of my income toward them monthly. I thought that because I was paying them off quickly, I could just leave them be and I’d be done in a couple of years.

Lately, this outlook has changed. I live in New York City, so I spend nearly 50% of my income on rent (which sounds insane but isn’t uncommon in NYC). That, combined with 20% of my income toward my loans leaves me with only 30% for normal life expenses and savings. I’ve recently become acutely aware of how those ratios are preventing me from beginning other financial goals like investing more or focusing more on retirement. You can read more about my student loan goals for this year here.

Of course, I could move to a less expensive city, but that’s simply out of the question.

Millennials and student loans

I’m not alone in my journey. My story is not unique.

It’s no secret that millennials are the generation of student debt. And, we’re also often thought of as a generation with financial illiteracy. Tough combination!

Though my student loans are an obstacle, for me personally, I’m actually happy I have them. Here’s why.

Reasons I’m grateful for them

1. They made me more accountable for my own education

Though I was academically driven in college, I do think having an actual investment in my education motivated me to work harder. It felt good to support myself in that way and when I walked at graduation, it felt like it was truly an achievement of my parents and mine. That’s the case whether you have student loans or not, but I was proud to feel like I had worked together with them to invest in my future and achieve this milestone.

2. They taught me responsibility and the value of money at a young age

I chose to begin paying off my student loans right when I took them out, meaning I paid them monthly during college.

Though I didn’t have a great grasp of what it would mean to actually live with debt at age 18 (who does?!), I knew I was not okay with interest accruing before I even began paying! (This is one of the moments in life when it helps to have an accountant as a father. J). Because of this, I understood the importance of automating payments, budgeting money that you’ll need to pay off, and the fundamentals of debt altogether.

3. They boosted my credit score

Having student loans (and paying them back diligently, of course!) helped me get approved for credit cards at a young age. As I mentioned above, I was lucky to learn the nature of credit and debts quite young, so I wasn’t worried about credit cards turning out bad for me.

Rather, the strong credit score helped me get several airline credit cards in college and reap their sign up bonuses, which was one of the best decisions I made in college! Once I graduated, I was eager to travel and don’t know how I could’ve afforded it without the frequent flyers I had racked up from those credit cards in college. Three years later, and those points are still a big reason that I was able to quit my job and travel to Asia for four months recently (link Leah!).

Related: how I flew abroad for only $50

4. They prevented financial strain on my parents

This one took me a while to understand, but I’ve come to the point where I disagree with parents taking out loans on behalf of their children for school. I don’t mean this to sound selfish. Rather, I think it’s in the best interest of the parents and kids’ finances for them to take out school debt themselves.

If parents take out debt for their children or even overpay with the money they do have for their kids’ school, they are putting themselves at a financial risk themselves. This puts them in a tough situation in which they might not have enough money during retirement. Who do you think they’ll go to for money then? Their kids.

It’s financially safer for both the parents and their children to leave the student debt up to the student. And, finances aside, this situation could do a number on personal relationships within your family. Money is a touchy subject!

5. They made me take graduate school more seriously

Two years after graduating from my undergrad, I was accepted into law school, which was a long time plan and goal for me. With those acceptances, though, came a huge price tag. Though I was confident that I could get a high paying job out of law school, I got real about how that debt would play into my life and thought that even after paying off my debt, it would just be a matter of time before something replaced those costs. Mortgages, vacations, children, etc.

Plus, I thought about how it wasn’t only the cost of law school, but also the opportunity cost of 3 years during my twenties that could’ve been spent learning other skills and making money. In the end, I’m very happy with my decision to decline school and know it was the right thing for me. I don’t think I would’ve taken the debt of law school so seriously if I didn’t understand how debt worked.

Are you thinking about law school? This website + e-course are designed to completely analyze if it’s right for you.

What I would’ve done differently

1. Worked in the service industry earlier

It was important to me to work throughout college so that I had work experience, learn time management, and keep a small income coming in while I began to pay off my student loans. I first worked in retail at Eastern Mountain Sports, which I was interested in because I love outdoor activities. It wasn’t long before realizing that retail was not for me (I’m way too talkative) and that I wasn’t earning enough money to make it worth my while. I began babysitting, which was better and I loved the flexibility, but still not a lot of money.

My junior year of college is when I began working at a bar near Time Square as a waitress. After only a couple of months doing that, I was making the same amount of tips in one night that I would make in an entire week babysitting or working retail. Plus, I loved waitressing and bartending. I met tons of new people and became good friends with my co-workers. Looking back, I would’ve started work in that industry earlier on to have made more money.

2. Lived out of student housing earlier

For the first two years of college, I lived in student housing, which was actually a great experience because I met friends that way. This includes my random roommate my second year who is my best friend and I still live with six years later (!!). However, if trying to save money, you can usually find a less expensive place to live than the expensive student housing.

When I did move into my own apartment, I paid about $200 less a month in rent. And, I moved to a pretty nice neighborhood. Had I wanted to save even more money, I could moved further away from school.

3. Opted out of the meal plan earlier

I only had a meal plan for the first semester of college because I did the math and realized that it was turning out to be something like $12/meal! That’s expensive even for New York. I switched to a mix of cooking at home with my limited cooking abilities and buying big delivery meals for about $10 and stretching them out for two meals.

4. Taken out more airline credit cards

One of the best decisions I made in college was taking out two airline credit cards (during two different years, not at the same time) and spent the required money to earn the sign-up bonuses. When I graduated, I had 100,000 miles of frequent flyer miles and a higher credit score thanks to utilizing these. I wish I would’ve taken out one more!

My plan of action

I’m on track to pay off my loans in a reasonable amount of time. However, I’m sick of them and want to pay most of them off this year. This is quite the ambitious goal and will require a lot of sacrifices. But, I’m going to try. Here’s a broad outline of my quarterly plan for 2017:

Quarter 1

Add an extra 2% of my annual income to my savings so I have a bigger cushion in savings. This is because nearly everything I make after March of this year will go toward my loans, so I want to have an extra savings cushion. I’ll use all freelance and side hustle money and put it toward that savings goal. Once I hit that goal, I’ll put all extra money in a sub-savings account I have called “Pay off my student loans”.

Read here for more detail on my Quarter 1 goals for this year and the system I use to hold myself accountable for my goals.

Quarter 2 + Quarter 3

Up my monthly loan payments so I’m paying 23% of my income toward my debt instead of 20%. Then, put all my extra income into that sub-savings account and each month, empty it toward my student loans. I’ll also stop putting money toward my 401k during this time since my employer doesn’t match right now. Put all of my tax return toward my loans.

Quarter 4

Kick up my 401k again since my employer will start matching at this time.

What are your student loans goals? Do you have any advice??

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