My Financial Breaking Point

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It can be difficult to start a journey with the Internet at our finger tips. On one side you have so many people that have been working their butts off for years and it can be hard to see yourself in that place when you are in such a different place. Change is hard and it doesn’t help when you see people posting about how great their life is now that they get their finances together.

The most important thing to keep in mind is that most of those people were right where you are now. You can’t compare your start with their middle, it just isn’t realistic. After years of working towards their goals, of course they’re in a better place. If they weren’t then they weren’t working towards anything.

Use those stories to motivate you to get to where they are and even further. Starting is hard, but the work is so worth it. I wanted to share with you all my financial breaking point and what caused me to completely change my life in a matter of months.

Summer of 2014: My financial reality smacked me in the face.

In May of 2014 I graduated from Syracuse University with a bachelors degree in Inclusive Elementary and Special Education and a lot of student loans, roughly $180k. Now, we all know that teachers don’t make the best salary starting out in most parts of the country. At this point, I did not understand student loans and was told they were a necessity in order to get my education.

I had no idea the reality of my student loans and what it would mean for me upon graduation. So, I decided to go straight into grad school full time and get my degree in 1 year, I’d be going for 4 semesters. I was going to get my masters in early childhood and special education. I assumed this would be a good path for me because it got me 2 more certifications, bringing my total to 4. That would make me more marketable, right?

About 2 weeks after starting my masters program I got a phone call from my Dad saying my first bill for my student loans from undergrad came. They hadn’t received my paperwork that I was still in school full time, which meant they billed me. The bill was for $1,200 and yes, I cried.

I didn’t cry because I didn’t have the money at the time. Of course I didn’t have the money, I was working at a day care making minimum wage, living in an apartment with my bills I had to pay every month. I knew I would get my loans put into deferment because I was full time at school.

I cried because I was in a masters program, taking out even more student loans, and just my private loans from undergrad promised a $1,200/month bill upon graduation. And I was going to school to be a teacher.

This is when I got serious about figuring out personal finance and decided to make major changes to my life in order to try to fix this hot mess I had created for myself.

Summer of 2014: The changes I made to get myself on a better path.

The easiest thing I could have done at this point was to drop out of grad school, but I knew the job market for an elementary teacher was tough. So, I decided to stay in grad school. Plus, at this point my plan was to stay in Syracuse and work there and in New York, you need a masters degree to get your standard certification.

So, I set up a meeting with one of the best people I met at Syracuse, who at this point had become a mentor to me. She had been the undergrad recruiter and I had worked with her in undergrad mentoring new freshman. Now, she was the grad recruiter and I knew she would be honest with me and spend time trying to figure out a plan with me.

I walked in to meet with her and laid everything on the table for her, my entire financial position at that very moment. She immediately started asking me questions and brainstorming solutions with me.

I walked out of that meeting with a to do list and my entire future changed. I credit this meeting to the beginning of my financial journey because without this meeting my life would have been so much different.

She had me apply to a new grad program, literacy education, which was less credits and made me much more marketable after graduation as a reading specialist. She emailed the person in charge of scholarships and asked if there was any available funding for me, someone who had done a ton of volunteer work for the School of Education in my undergrad and grad programs. A new job application for a preschool that offered 4 credits to Syracuse in the fall and spring semesters each for me. A babysitting job lined up that her daughter could no longer do because of a new job and a meeting scheduled with the financial aid office.

We also talked about my plan for after graduation and I told her I was planning to stay in Syracuse and teach. She immediately told me this was not a good idea. She pulled up the teaching salaries in the area and told me my salary here would not support my loan payments and that doesn’t even include cost of living.

She encouraged me to move back home with my parents and teach in New Jersey, where teaching salaries are much higher due to the high cost of living. I never even considered this option, but the reality was that it might be the best choice to get my finances in order.

Fall of 2014: Everything falls into place.

After that meeting, I immediately got to work. I applied to the preschool for a fall teaching aide position and I got it! This gave me a higher hourly pay than the day care and gave me 4 credits for the fall and spring semesters. The family hired me to babysit for 10 hours every week and she was flexible for when I came because she worked from home. I would go over there between my preschool hours and my night classes. A scholarship did come through and I managed to get additional TEACH grant funding for grad school. My entire tuition for the fall and spring semesters would be paid for.

I couldn’t believe that all of this was actually happening for me. With all of these new plans for myself, I still made sure to continue doing my research on personal finance. I got myself on a zero based budget, I got strict about my grocery budget, and since my jobs were all close to home, I really didn’t spend much money month to month.

While I was in grad school, I was averaging about $1,100 in income every month and shockingly, I managed to pay off some debt while in grad school. It wasn’t much, usually about $200/month, but it was still something. I felt so much more relaxed and at ease when it came to my finances once I got things under control. I was still nervous about what would happen post grad, but I felt so much better about it all.

Spring of 2015: Post grad reality sets in.

I knew I was going to have a hefty student loan payment each month. I estimated it to be about $2,000/month. So, I made myself an estimated budget for after I graduated. By this point, I had shared my plan with my parents and had officially decided to move home after graduation and started finding schools to apply to that met the requirements for my TEACH grant.

I knew it was going to be tight with my estimated budget I made, even with living at home and getting a higher salary because it was in Jersey. I was committed to getting side jobs tutoring and babysitting when I moved back home though. I figured I could get more income this way and there would be possibilities of more income at the school I’d work at.

I walked at graduation in May from my masters program with 6 credits to complete for my degree. Reality started kicking in, a lot of my friends in my program were getting job offers, and I still hadn’t heard anything. I knew it was still early and I knew the job market was tough in New Jersey, but I really needed a job if I was going to pay these loans back.

The Monday after I walked at graduation, I got a call from a school district 20 minutes from my parents house for a 5th grade position. I set up an interview for later that week and they hired me on the spot during my interview. I was so relieved and I was happy that my starting salary was $56k, about $10k more than I would have been making if I stayed in Syracuse.

I remade my estimated budget with my salary included and realized it would still be tight, but it would be manageable, something would not have been possible if I moved out of my parents house.

Fall of 2015: Pay back begins.

In August, I started my new job and the school year began in September. I was so excited to have my first classroom and to be teaching. I had my budget all ready for September and I began searching for ways to make more money. It definitely wasn’t easy as a first year teacher, I was exhausted and spending every minute doing work, but I was determined to find a way.

I officially started paying back my loans in November 2015, I had made payments in the months prior though. This helped me a lot because I had already made a small dent in my loans and helped me build the habit of paying more every month. I didn’t let my first salary go to waste, I put everything extra right to my student loans. My minimum payment was roughly $2,000/month when I started and it was hard at the beginning. I wasn’t seeing much traction because it was hard paying additional.

I eventually got a tutoring job and this freed up some cash flow for me allowing me to send even more money to debt.

Spring of 2016: First student loan paid off.

One year after I walked at graduation, I paid off my first student loan and I absolutely loved the feeling of getting that debt gone. I decided on the avalanche method because I had some crazy large balances with some crazy large interest rates. My student loans were all monsters, there would be no quick wins in the beginning for me. That was why I decided to go with the avalanche method.

It was hard waiting so long to pay off my first loan, but the reality was that I was going to need to wait regardless in my situation. I would have mini celebrations every time I paid off $5k though, this kept my motivated in that first year.

Spring 2019: Where I am now.

Over the last 3 years I have stayed in the same school district, moved teaching positions, added a ton of side jobs, and crushed $118k of debt out of $201k. I never thought I’d be here when I completely broke down in the summer of 2014. I had read so many blogs about others doing it, but I never thought I would.

Through some sacrifices, budgeting, and increasing my income, I have done it. Of course, I still have $83k left, but I am damn proud of what I have accomplished so far. I am still living at home, still working side jobs, and still teaching. Is it hard living at home at almost 27 years old, of course, but I wouldn’t be able to reach my goals if I wasn’t still here.

I also refinanced my private loans to get a lower interest rate of 4.97%. This isn’t a good option for everyone, but I’m so happy I did. I had $45k left in private loans when I refinanced and in 7 months I am now under $30k. That never would have been possible when I was at 7% interest. Refinancing allowed me to put more of my money towards my principal, which is saving me money in the long run. If you want to refinance your student loans, you can use my link to get $200 when you refinance.

Don’t compare your beginning to someone’s middle.

Any change is hard and it’s even harder if you aren’t giving yourself some grace. When you’re first beginning, it’s going to be hard, but it’s so worth it in the long run. I am so happy I started my journey and have paid off as much as I have. I know that if I didn’t decide to start, I never would have been where I am now. So, what’s stopping you from changing your life?