Paying off student loans? Using cash can help!
American tuitions can cost an average of $8,700 public universities and often exceed more than $32,000 a year at private universities. That’s a lot of money! Tuition costs seem to only ever increase, growing by 63% between 2006 and 2016.
One 23-year-old graduate figured out how to eliminate $20,000 in student loan and car loan debt while becoming a homeowner by simply paying with paper instead of plastic. Did we mention this happened over one year?
After earning her bachelor’s degree in nursing from Wright State University in 2017, Kristy Epperson owed about $16,000 in student loans from multiple borrowers with interest rates of between 3.6% and 6.8%. She also had roughly $4,000 left on her car loan, at an interest rate of 4.2%.
The anti-debt strategy: Cold, hard cash
Epperson’s expense tracking showed her one key problem area: credit card use.
“I would look at my credit card bill and not even remember some of the charges...I was eating out a lot, buying new clothes at Target, shopping on Amazon...I felt using cash would hold me accountable,”
So she ditched the credit cards.
Every month, Epperson started withdrawing money from her checking account to cover spending categories like dining out, groceries, and gas. Once she ran out of the money she had allocated to a specific expense, she stopped spending on that category.
If Epperson overspent in a category, she would borrow from another.