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Everyone is talking about the crisis among 20-somethings. We don’t save enough. We’re behind on retirement. Our loans are untenable. We have high credit card debt.
I’m a 27-year-old legal consultant in New York City. I don’t make six figures, but I make a comfortable income. And I like saving — maybe a little too much. I max out my 401(k), have a robust savings account and no credit card debt, and I paid off $34,000 in student loans in less than a year. Even my parents think I’m an over-saver, and they save a lot.
What Made Me This Way
I was raised on Staten Island, New York. My dad was a teacher, and my mom worked for the government. But I got it into my head at a young age that we were poorer than we were.
It probably had something to do with the fact that both my parents came from poor families. My dad's parents were factory workers, and my mother grew up the oldest girl of seven kids in a two-bedroom house in Queens.
For this reason, she tended to spoil us. Of course, she bought everything on sale whenever she could, and put money in savings bonds for me and my brother.
How I Got Four Degrees and Owed Just $34,000
My mom had saved money for college, but she thought it made more sense to go to undergrad for free and then go to a good graduate school. I got a merit-based full-ride scholarship to the University of Delaware.
My full ride came with housing and meals. I usually had some money left over from my book stipend, and I would live on that. I rarely ate outside of my meal plan. I didn’t drink until I was 21. I didn’t have a car.
The only thing I paid for was study abroad in Australia and some summer classes, since I was getting two degrees, in civil engineering and English.
After I graduated, I went straight to law school at Cornell. I used all the money my mom had saved for college, and during the summers I worked at a law firm. The rest of my degree I financed with the maximum amount of federal subsidized student loans.
My second and third years in law school, I was a residential adviser, saving $10,000 a year on housing. I cooked most of my own food. I spent less than $50 a month on eating and drinking. I still had no car. When I did one more year at New York University to get my master’s in tax law, I lived with my dad in his studio in the city (my parents are divorced). By the time I graduated, I had four degrees and only $34,000 in student loans.
The day I graduated from law school in 2011, my mom found out she had breast cancer. I moved back home to live with her on Long Island, and used that time to apply for jobs. I got a job offer in the late fall, right around the time my mom finished with her surgeries and my student loans kicked in. My dad moved to Florida, so I moved back into his apartment.
Transitioning to Adulthood and Saving Even More
As soon as I started my job, I maxed out my 401(k) by putting in 21% of every paycheck. I put at least $1,600 (half of my take-home pay) toward my student loans each month — more than four times the minimum payment. My mom put $600 toward paying them off as well. The rest of my paycheck went toward roughly $700 for maintenance on my dad’s apartment, $100 for cable, $50 for utilities, $100 for vegetarian groceries, $100 to charity, and a little bit to go out.
Every dollar I spent on things other than loans had a 6.55% surcharge in my mind, because that was my interest rate. I maintained a spreadsheet detailing the principal, daily interest I was paying, and how much I would save if I paid off my loans faster.
I was spending $5 a day in interest in the beginning, so I balanced this by walking to work — it takes a half hour each way — rather than spend the subway fare.
I have not taken a single day off work since I started 15 months ago. I reasoned that if I quit or got fired (not likely, but you never know), I would get paid for those vacation days. Each one is worth around $300, so I would think to myself, “Do I want this day off or do I want the $300?”
At work we generally congregate in the conference room for lunch after everyone gets takeout from various restaurants, but I always bring mine. I can’t fathom spending $15 so someone else can make a salad for me.
So yeah, I’m vocal about it.
My friends make fun of me sometimes, but in a good-natured way. Many are also recent law school grads with incredible student loans, so they understand.
Oh, and I never use my credit card. I probably have a terrible credit score, but I won’t need to take out any new loans any time soon. I just really hate paying interest.
Bye-Bye, Student Loans
I paid off my loans in September, less than a year after they kicked in, saving myself over $11,000 in interest. I switched from playing with loan calculators to retirement calculators, and maxed out my IRA.
I do spend a little more than I used to. If I see a piece of clothing I like, I’ll give myself a pep talk. “It’s $30, you like it, and you can afford it.” I still only buy items when they're on sale, though.
You know what my ultimate financial goal is? I hope to someday be rich enough that my mom never has to worry about money again.