A millennial paid off $23,000 of student loans in half the time she expected thanks to 3 simple moves

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A millennial paid off $23,000 of student loans in half the time she expected thanks to 3 simple moves
Business Insider

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A millennial paid off $23,000 of student loans in half the time she expected thanks to 3 simple moves
Ashley Keimach.Photo courtesy of Anna Sinnaeve
  • Ashley Keimach, 27, paid off her student loans, totaling $23,000, in half the expected time.
  • She negotiated raises at work, and made extra payments each time she felt tempted to buy something.
  • When the pandemic hit, she used extra savings and payments to finish off her loans interest-free.

Twenty-seven-year-old Ashley Keimach found herself in the same situation many millennials have found themselves in after college: in five-figure debt.

Keimach, a Los Angeles native working in the health insurance field, originally had a 10-year timeline to pay off about $23,000 worth of student loans, including interest.

But, she did it in half the time - she wiped out her student loans in five years instead, paying off about $13,600 in 2020 alone. And she credits her quick payoff with three moves she made to earn more, spend less, and reach the end.

1. She negotiated raises and funneled the extra cash to her loans

To pay off her debt faster, Keimach worked on getting raises at her job.

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"I found myself being more proactive with my career and salary negotiations because I had a purpose. I needed to increase my income to pay down my debt," she told Insider.

Increasing her income also meant switching jobs. "It gave me the courage to walk away from low-paying jobs and the audacity to apply to jobs that I wasn't qualified for on paper."

As her salary increased, she'd funnel the additional cash towards her loans, paying down the principal.

2. She spent extra money on her loans instead of on things

In order to slash her spending, Keimach decided to try a simple strategy she saw online.

"I remember hearing a while ago from someone on YouTube that whenever they wanted to buy something on an impulse, they would instead send that money directly to their loans," Keimach said. "I started doing this and it really helped me keep my mind focused on my goal."

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By simply putting the money she would have spent anyway toward her loans, she was able to make extra progress.

"It surprisingly became enjoyable, like it was a game," she told Insider. "Whenever I had extra money or would receive a raise, I would throw that money towards my loans before giving myself the chance to think about spending it on something else."

3. She took advantage of a rare 0% interest rate

Towards the end of her student loan payoff journey, the pandemic brought big change. Since March 2020, federal student loan payments have been paused and interest rates set to 0% because of the COVID-19 pandemic. Keimach saw this as an opportunity.

"When the pandemic happened, I was in a position where my finances were better than ever. My husband and I had managed to save $20,000 and I had around $10,000 left on my loan," she said. "When we learned about interest being paused on student loans, it forced us to re-evaluate my debt-repayment strategy."

Given that opportunity, Keimach made extra payments towards her student loans throughout 2020. With interest rates at 0%, any money put towards loans would go directly to the principal. But, she and her husband decided they could do more, and the couple made a lump sum payment from their savings to pay off the full balance in August 2020.

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"I'm not sure if I would have made such a big payment if interest was not paused," she said. But, when the opportunity presented itself, she took advantage as best as she could.

"The temptation to pause payments and redirect that money towards our other financial goals was at the forefront of my mind," she said. "But I also knew that getting rid of my student loan debt once and for all would give me freedom and peace of mind."

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