With all the stories of despair, it is nice to occasionally read a story about a college grad who through discipline and perseverance is able to dispatch his student debt quickly.  So, how did he do it?  Three keys:  living at home (so no rent), worked second job delivering pizzas and saved, saved saved (about 2/3 of his take-home pay).  Key advice:  Have a plan!

Excerpts from the Time story:

On landing his first job:

Luckily, I got a job right out of college at an insurance agency (I had majored in finance). I was on salary, and it was pretty good: $36,000 plus bonuses.  I didn’t have to pay my student loans for another four months, but over the summer I decided to go ahead and start making payments before interest began accruing.  I actually moved back in with my parents—which is hard when you have been out on your own. But I didn’t really have a reason to move out. And I was blessed that they actually preferred me to live there because I could help out around the farm they own, baling hay or feeding the horses. Living at my parents’ place for free was a lot better than having to pay $400 or $500 a month for rent.

On his monthly budget after finding a second job:

About four months into my new job, I picked up a second job, delivering for Pizza Hut, to help pay off my debt. I would start work at the insurance agency at 8:30 a.m., change in the bathroom at 4:50 p.m., get to Pizza Hut by 5, deliver pizzas until about 9:30, get home around 10, then shower, eat, and go to bed.

My monthly take-home pay from the insurance company was about $2,200, and I made about $1,000 at Pizza Hut. After gas, car insurance, tithing to my church, entertainment and food, I could put about $2,000 towards my debt every month.

On advice he would give others:

If you have a game plan, you can accomplish your goals. I have an account on Mint.com, that’s where I kept my budget. That’s a big part of it—just seeing your progress and knowing you’re getting closer.

Also, have an emergency fund. While I was paying off that debt, I had a small car accident. I was delivering a pizza, and I hit something in someone’s driveway. It cost me about $760 to fix the car. But I had a $1,000 emergency fund, which was kind of a buffer that I kept because life happens.

Finally, don’t be afraid to move home if you have to. That was a big part of how I got out of debt.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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