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No doubt by now you’ve discovered that student loan forgiveness isn’t going to help you. So, what do you do now? Do you continue to make the minimum payment? Or do you get on a 10-year payment plan? Indeed, it’s difficult to know what to do with student loans breathing down your back. However, I’m here to tell you there’s hope! Let’s take a look at the best way to pay off your student loans.

Create a Vision for Why You Want to Pay Off Your Student Loans

First, you need a vision. Furthermore, I want you to have a “why.” The reason for this is you need to know where you want to go in order to get there. Create a vision for your future, and give it a lot of detail.

For example, maybe you want to be able to give away money freely for the advancement of God’s Kingdom. Or perhaps you want to freely devote the majority of your time to mission work. Additionally, you may even want to pay for your children’s college. Maybe even all three of those things plus some! Whatever it is, create a vision for your future. “Where there is no vision, the people perish.” – Proverbs 29:18a

Create a Plan to Pay Off Your Student Loans

Second, you need a plan. As the old saying goes, if you fail to plan, you plan to fail. This is where you begin to take action. Moreover, having a plan will keep you on track and hold you accountable. Of course, I recommend Dave Ramsey’s seven baby steps as a viable plan! But how do you go about implementing it?

1. Acknowledge Your Situation and Decide to Change

This one may seem obvious. However, it’s surprising how many people just accept student loans as a way of life. I once saw a video in which an interviewer asked random people in Nashville about their student loan situation. When asked about plans to pay off their student loans, many of them said things like, “when I die! In twenty years! Never!”

But I encourage you not to have such a negative outlook. On the contrary, you need to be fired up and ready to kill your debt! Make a decision to change rather than hopelessly give up.

2. Make a Budget

I know, I know. I tell you to make a budget on every blog post. But why? Because you can’t win without one. It’s impossible to implement a viable plan if you don’t know where your money goes.

First, I always advocate for giving, even if you’re in debt. But you also need to make sure you can take care of the basics. Those are as follows: food, shelter, utilities, and transportation. After that, take a look at your fixed expenses. Finally, take a look at your debt and determine your minimum payments for everything.

Writing out your budget and your monthly expenses will help you see where everything goes. However, you might notice that you’re spending more than you make every month. Either that or you have little to no money left over to knock out debt. That’s where the next point comes into play!

3. Make Sacrifices

After you know where your money goes, you’ll most likely need to make some sacrifices. For example, let’s say you have a cable bill of $120, a gym membership of $80, and subscriptions to multiple streaming platforms that total $45. It might be time to cut those things off. See? I just found you an extra $245 to apply towards your debt! Keep in mind that these things aren’t necessities. Therefore, it’s okay to cut them out while you pay off your debt.

Now, cutting subscriptions and gym memberships aren’t the only ways to save money. You can also cut back on food, clothing, and other essential items. For instance, let’s say you pay $300 a month at restaurants and $600 a month in groceries. Eating out is not a necessity. Furthermore, you don’t need to purchase name-brand items from the grocery store. And yes, it’s possible to eat and shop healthy while living on a strict budget.

However you look at it, you must make some sacrifices if you want to pay off your student loans quickly. There’s no way around it. Take a look at your expenses and see what needs to be cut!

4. Save Up for a $1,000 Emergency Fund

Unexpected expenses come up ALL THE TIME. An appliance will short out, you might break your arm, or you’ll get a flat tire. Make sure you prepare for these minor emergencies by having $1,000 in the bank.

And yes, I am fully aware that $1,000 is not enough in the long run. But I have news for you: It’s not meant to be. However, $1,000 will sufficiently cover most minor events that come your way. You can also let it be extra motivation to get out of debt faster!

5. Use the Debt Snowball Method

Time to get serious and knock out this debt! The best way to do this is by using the debt snowball method. So, how does this work?

First, you write down your debts in order from smallest to largest, regardless of the interest rate. They might look something like this:

  • Medical Bill: $750 (minimum payment of $75 per month)
  • Credit Card 1: $2,000 (minimum payment of $80 per month)
  • Credit Card 2: $2,500 (minimum payment of $90 per month)
  • Student Loan 1: $10,000 (minimum payment of $200 per month)
  • Student Loan 2: $20,000 (minimum payment of $350 per month)

Next, you attack the first debt with all the extra money you can find. Meanwhile, you pay the minimum payment on all the others.

Looking at the above example, let’s say you were able to find an extra $600 per month after doing your budget and making some sacrifices. You can easily pay off the first bill within a month-and-a-half. After that, you’ll take the $600 alongside the minimum payment of $75 per month from the medical bill and apply it to the first credit card. Within about six months, you’ll have both credit cards paid off. Now you have momentum and can attack the student loans with $845 per month! Within a couple of years, you can be totally debt-free!

If you want to run some scenarios, I recommend checking out this handy student loan payoff calculator.

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    6. Consider Getting a Side Gig

    In the above scenario, you’ll stay in debt for around three years. Hopefully, you think that’s too long to remain in debt. So, what’s the solution? Let me introduce you to the wonderful world of side gigs!

    With the advent of the internet and other platforms, there are more ways than ever to earn extra money. You can drive for Uber, deliver for DoorDash, freelance from home, and more. If you want some ideas, I compiled a list of 40 ways you can make extra money.

    Just imagine what life would look like if you could knock out that debt a couple of years earlier. Going back to the above scenario, those monthly debt payments add up to $795 per month. Think of what you could do with an extra $795 every single month! You could give more, invest more, and enjoy more!

    7. Apply Any Tax Refunds or Raises Towards Your Student Debt

    Raises are awesome! So how should you use that extra $200 a month? Remember, you have a goal of living without debt. Therefore, apply it to your debt!

    Now, let’s talk about tax refunds. Your goal during tax season is not to get a large refund. In other words, your tax refund is not free money. On the contrary, your tax refund is the excess money you gave to the government. They’re just giving it back to you. Instead, adjust your withholding. That way, your money goes into your bank account rather than to the government! For example, let’s say you receive a tax refund of $2,400 every year. If you adjust your withholding at work, you’ll get to keep an extra $200 a month!

    Believe it or not, the IRS actually has something useful that can help you with your withholding! Check out their Tax Withholding Estimator to see what your exemptions and withholding should be.

    8. Consider Refinancing Your Student Loans

    Now, this is something you want to do only if it makes sense. Remember, the goal is to pay off your debt as soon as possible. And there are plenty of lenders who are eager to “help” you. The goal with refinancing is to secure a better interest rate and payment terms. Therefore, you should only refinance if you get those two things.

    The lender endorsed by Dave Ramsey is Splash Financial. Check them out and see if they can give you better terms!

    You Can Do This

    You may have noticed that paying off your student loans isn’t necessarily easy. However, keep in mind your goals, your vision, and your dreams. One thing I want to help you do is to fulfill God’s call without restriction or reservation. During my day job, I talk to someone every week who is unable to go to the mission field because of their student loans. Why? Because their debt tethers them to their lender. Instead, work hard for a few years and get that debt paid off!

    One resource I recommend is Destroy Your Student Loan Debt by Anthony ONeal. This little book will give you a step-by-step guide on the best way to pay off your student loans.

    If you’re looking for a plan to go to school without using student loans, then I recommend Debt Free Degree, also by Anthony ONeal.

    Now go out there and pay off those student loans!

    *This article contains affiliate marketing links. For more information, please read my disclaimer.

    Get your FREE Debt Snowball Worksheet

      Don’t worry, we won’t spam you. Unsubscribe at any time.

      Please see our privacy policy.


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