Conquer your student debt. Refinance now.
When Logan Allec graduated from college, he had over $55,000 in debt—$35,000 in student loans and $20,000 in a car loan. Working at a CPA firm, he was earning an entry-level accounting salary, but he didn’t think too much about his debt.
“The debt felt bad, but I figured it would work itself out eventually,” Allec said. It wasn’t until he started looking ahead to the future that he realized how severe his debt problem was.
“I thought about what my life would look like at 30, 35, and 40 if I still had that debt,” Allec explained. “It was a freakout moment for me. I realized life wouldn’t turn out the way I thought.” Newly motivated, Allec tackled his debt head-on. With the help of student loan refinancing, he was able to get out of debt faster and save thousands. Here’s how he did it.
Deciding to Attack His Debt Head-On
Doing the math and seeing how much interest he’d pay overtime was a huge motivator to Allec.
“All that debt lit a fire under me to better myself financially and learn as much as possible about personal finance,” said Allec. “I went to Barnes and Noble and read all kinds of investing and finance books.”
One thing, in particular, stuck out to him.
“The point of one book was that you can only save so much money,” Allec said. “Eventually, you have to boost your income to make real progress.”
He began to take drastic steps to better his finances. Living in the Los Angeles area, which has sky-high housing and rental prices, he moved in with three roommates to cut down on his expenses.
But he also focused on increasing his income. His job allowed him to work overtime at double-pay, and he began working 12-hour days.
“I was constantly working for extra projects and volunteered to work weekends,” he said.
He also launched several side hustles to boost his income even more.
“A very natural one was tax return preparation, leveraging my background,” he said. “That was the most profitable.”
He even did transcription work and sold garage sale finds on eBay.
“The majority of my side hustle income was from leveraging skills I already had,” said Allec. “That was a key takeaway for me.”
Refinancing His Student Loans
Allec had high-interest student loans; at 6.8% interest, he was paying a fortune in interest charges. Allec researched other strategies for paying off his debt and came across student loan refinancing.
“I saw an ad on the internet for refinancing and I shopped around with a couple different lenders,” said Allec.
He discovered Earnest, which offered him the lowest rate for refinancing.
“I opted for a variable-rate loan that started at just over 2%,” Allec said.
Even though he kept the same repayment term, he managed to save thousands. Allec considered those savings to be substantial. Thanks to his knowledge of personal finance and investing, he realized that the money saved could be worth far more later on.
Allec remained committed to bettering his finances. He maintained spreadsheets and calculated how much his savings would be worth at 65 and beyond, and was blown away by the numbers.
“A few thousand dollars saved now [by refinancing] could become enormous later on,” he said.
With his hard work, Allec was able to pay off both his car loan and nearly all of his student loans, allowing him to focus on his other goals.
Launching a Blog
Allec’s dedication didn’t go unnoticed.
“I think because I was unusual in my circle of friends, I got a reputation as a money nerd,” Allec said.
It was that reputation that caused him to start to blog about his efforts and experiences. At first, it was anonymous. Over time, Allec learned about affiliate marketing and making money online. He signed up for affiliate programs with different companies, including investment products and survey companies.
He changed his blog’s name to Money Done Right, and soon his blog took off. His blog started earning five-figures each month, and Allec realized he could either keep his blog as a side hustle, or turn it into a full-time job.
“Balancing both was tough,” he said. “I just got married that year, too. I was working 60 to 80 hours a week, plus my commute. But since I took the train, I used my long commute to work on my blog. And I’d often work on the blog during the wee hours of the morning.”
Finally, he and his wife decided that he should quit his job and work on the blog full-time. His passion allowed him to stay home and spend time with his first child while doing something he loves.
Managing Your Loans
Allec is the first to admit that not everyone can replicate what he did.
“It’s different for everyone,” he said. “I was fortunate enough to be in a position [when I was in debt] that I was only caring for myself. I didn’t have any children at the time or anyone depending on me, so I could work long hours and take on side hustles. Not everyone is in a position to do that.”
However, Allec believes that everyone can make progress by being honest with themselves and doing an audit of both their money habits and time.
“If you’re serious about getting out of debt, you have to audit how you spend your time and your money,” he said. “I guarantee you that when you do an audit, you’ll find cracks. Identifying how to fill those cracks is key.”
Coming up with a budget and sticking to it is an important first step. But Allec also recommends picking up a side hustle, even if it’s just a few hours a week.
“Spending a few hours a week building something, over the long run, can become valuable,” he said.
He also advises people to talk about their debt.
“If you feel overwhelmed by your debt, there’s no shame in opening up to others about it,” he said. “Finding other people to talk to about your situation can be powerful, and the internet makes it easy to find like-minded people.”
For Allec, student loan refinancing and side hustles were key to repaying his debt and paving the way to a financially sound future. If you’re facing student loan debt and don’t know how to get started, check out this guide on paying back student loans.