Pretend to Be a Student Until You Pay off Student Debt

College me: "I live in a tiny dorm room with 2 other people, and it's awesome!!"

College me: “I live in a tiny dorm room with 2 other people, and it’s awesome!!”

‘Tis the season for fake commencement speeches and poignant advice for college grads. Steve at Think Save Retire issued a challenge to write a commencement address, and I’m tweaking mine to be more of a “coffee date message.” Because my advice isn’t eloquent or pithy, it’s purely practical.

My #1 financial message to recent grads would be: pay off your student loans. My #1 strategy for doing so would be: pretend to still be a broke college student. Lifestyle inflation is nearly inevitable after college, and that’s appropriate, but delay as much of it as possible until you slay those loans.

Hopefully you’ve landed a good job, but even if you have a great new income, you still don’t have money if you have debt. I know those new paychecks will burn a hole in your pocket, but try to think about the impact of keeping those student loans around for 10-15 years. Let me give you some perspective.

I graduated from college ten years ago. Many of my peers are married with kids, and some are still swimming in student debt. They may long to purchase a home, but cannot afford one because they graduated with mortgage-size debt. Others are struggling to afford medical bills or fertility treatments, because student debt still holds them back. And college funds for their kids will have to wait, because they still haven’t finished funding their own education.

Now, I don’t judge people for having a lot of student loans. When they were teenagers, the people they trusted most told them this was good debt. They said you had to do this to get ahead in life. But the people telling them this—parents, teachers, school advisors—went to college at a time when you could pay for tuition by working in the summer! Times have changed, and some of us were railroaded into massive debt before we were mature enough to understand the implications.

So that stinks, but it’s too late. After all, student loans are the one type of debt that can’t be forgiven through bankruptcy. Not that that’d be a great option, anyway. So what are you supposed to do?

How about, for starters, don’t take on any more debt?! No cars loans. No financed furniture or computers. No credit card debt. Definitely no mortgages! Just don’t go there, because you’re already in debt.

What are you supposed to drive? Sit on? Eat? Wear? Live in?

The same things you’ve been driving, sitting on, eating, wearing, and living in. Keep splitting the rent with roommates. Get hand-me-down furniture. Keep driving the beater. Shop thrift stores for your professional wardrobe. Pack your lunch.

My husband and I married while we were still in college, but even after graduating we declared that we wanted to keep living like college students. Not in the sense of late-night partying and living on ramen noodles, but we wanted to keep our lifestyle simple and inexpensive.

We did “upgrade” from beat-up college rental homes with many roommates, to a 1-bedroom apartment. Our little place felt like the lap of luxury, but it was actually cheaper than the combined rents we’d been paying in a college town.

I remember our newlywed grocery budget was $30/week (not adjusted for inflation). We shopped at ALDI and Save-a-lot, packed lunches, and cooked dinner at home most nights. We still sometimes got fast food or went out to dinner. For entertainment, we often invited friends over, went for long walks, or visited free community events.

We bought a new bed and a bookshelf, and that was it. All our other furniture we bought used or got for free as hand-me-downs or gifts.

We continued driving our used cars, once of which Neil salvaged after the engine was submerged in water. We split Internet service with other friends in our apartment complex.

None of this felt like a sacrifice; we had plenty of fun, traveled, and still bought things we didn’t really need. In fact, we splurged big time after Neil graduated and went to a Europe for a month! So it wasn’t like we 100% froze our lifestyle or refrained from all extra spending. But we were able to save up the money from my first year teachers’ salary to take this big trip.

We didn’t take our own advice perfectly. We even bought our home right before paying off the school loans. In the end it didn’t matter, because it was simply of matter of timing at that point. We were bound and determined to pay them off quickly, and we did. I’m so glad we paid them off before starting a family, so we could start college funds for our kids.

Even with major “slip-ups” in pretending to be college students, we were able to set ourselves up for a more flexible future. An overall mindset of delaying lifestyle inflation helped us make financial progress I know wouldn’t have been possible otherwise. It’s also made it easier to live on one income while I’m home with little kids.

It’s really hard to deflate your lifestyle, so keep it simple out of the gate. You had a ton of fun in college without a big budget; the same is possible now that you have an income. As you focus on your new stage of life, don’t lose sight of your real financial position. If your net worth is still negative, pretend you’re broke. Because you actually are.

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36 Responses to “Pretend to Be a Student Until You Pay off Student Debt”

  1. Tonya says :

    I agree with your advice. As you get older you start to want those creature comforts that you didn’t worry so much about in college, for instance, I used to be able to sleep anywhere in any circumstance, which most older adults, myself included, can’t do anymore. You also want better quality food, living quarters, etc. Nothing crazy, but more expensive in the long run. As a young adult (that’s anyone in their 20’s anymore), you don’t have as high of expectations. At least that was MY experience.

    • Kalie says :

      Yes, I agree that we tend to require better accommodations as we age. That’s fine, but it means delaying those expenses for a couple years can help you afford them later!

  2. Brian - DebtDiscipline says :

    Great post Kalie! Such a simple idea, but easier said than done for many. The best step to get out of debt, stop adding new debt. If you can learn to delay the wants and properly plan for them it will make things so much better for you down the road. Isn’t this why kids go off to college to experience the college experience, live on their own, why not extend that for a few more years and dump your debt. 🙂

    • Kalie says :

      Thanks, Brian. It is sooo important not to add new debt. I can’t imagine where we’d be if we’d taken on car loans, bought a house sooner, or added credit card debt to our situation as new grads. That would have set us back a lot.

  3. Amanda says :

    Totally agree! My husband and I married in college as well and lived like college students for a few years, but bought a house way before the student loan debt was paid off.

    “When they were teenagers, the people they trusted most told them this was good debt.” – this is so true and I took this advice to heart, along with my dad’s statement “You’ll always have a car payment”. Unfortunately it took about a decade for me to figure out this wasn’t necessarily true. I hope graduating seniors take your advice, Kalie!

    • Kalie says :

      I think delaying the additional debt even for a while is huge. Any amount of time you can continue the college lifestyle is helpful. I know a lot of people believe that about car loans so you weren’t alone in that. We do know some college students and new grads so we hope they get something out of this 🙂

  4. Emily says :

    Great advice! I’ve seen the instant lifestyle inflation happen again and again. You make living the simple life sound fun and do-able! Josh and I both had scholarships / paid our way through college so we’re thankful that we both graduated without debt, but I think you’ve got the right philosophy for those with student loans!

    • Kalie says :

      We do find simple living quite fun–perhaps more fun in many ways! It keeps you creative and flexible. That’s AWESOME that you didn’t have to deal with student debt. I didn’t have student loans, so it helped a lot that we just had one person’s worth, and his were relatively reasonable. Still, we could’ve dragged them out a lot longer and I’m glad we didn’t!

  5. Hannah says :

    This is excellent advice!

    I’ve got a lot of friends who feel that they need to delay having kids for another 5-7 years (on the outer edge of fertility for many women) because they’ve got a lot of debt, and other friends lament that they can’t be more generous because of their debt, and other people can’t move across the country for a job offer because they are stuck upside down on a house, and they’ve got a lot of other debt besides. I think it is possible for most people to be at a 0 net worth within a few years of graduating provided that they don’t inflate their lifestyle, and they work as much as possible.

    The financial flexibility is worth it!

    • Kalie says :

      Those types of stories are so common and represent some really difficult situations. I hope these examples get through to new grads as they choose their lifestyle. The flexibility is absolutely worth all the hard word and delayed gratification.

  6. Dividend Diplomats says :

    I agree with your advice. Hold off lifestyle creep as long as possible because once you start spending more, it is hard to stop. Who wants to live like a college student when you have lived the life of an exciting young professional? At my job, I see a lot of people that get their first paycheck and immediately purchase a new car, rent a large apartment, etc. When you talk to them though, they are still swimming in student debt and have a zero percent savings rate. No thanks. Better to live the poor college student lifestyle you are used to while you can, put as much down on the debt as possible, and become debt free as soon as possible. But, not too many people follow our mindset!

    Thanks for taking the time to write.

    Bert, One of the Dividend Diplomats

    • Kalie says :

      Yes, we hear this trend a lot at work, too. Especially from young people who are making good money, but they haven’t taken care of student debt before adding car loans and consumer debt, sometimes even mortgages. It is hard to go back–better to keep it low-key for a few more years!

  7. Josh says :

    The book “Rich Dad Poor Dad” says that education is good debt. I read that in high school & like every other teenager thought it was true. It also doesn’t help that a teenager cannot fathom just how much $30,000 or $100,000 is until they have to start making payments. I knew it was a lot of money but still couldn’t entirely grasp how much.

    As you mentioned, lifestyle inflation is inevitable to a certain extent. The trick is not going clubbing every weekend, buying $30,000 car, or a giant house that took your parents 20 years to eventually move into.

    • Kalie says :

      It is very hard to fathom those sums, and I’ve found most students have no idea how much their monthly student loan payments will be after graduation. That is the only number that might be comprehensible.

      Yes, a little lifestyle inflation is no big deal. It’s the biggies you mentioned that just don’t need to happen right out of the gate.

  8. Our Frugal Escapades says :

    This is excellent advice for those who are just starting out in life! My nephew just graduated from college and I hope he makes the right decisions with his finances so he can get off to a solid start with his future. I’m sending him and email with this link so he can read this! – Mrs. FE

  9. DC YAM says :

    I didn’t think lifestyle inflation was a big deal until I started working in corporate America. It’s pretty incredible the lifestyle that some people have. I am trying to keep it simple and grind away at increasing my income – while at the same time keeping my spending about the same. I’ve been able to do it for about 5 years now so I hope to continue to do it another 5, 10 years (and beyond).

    • Kalie says :

      It’s amazing how delaying some of those extra expenses can help you realize that you don’t need them after all. That is another huge benefit of waiting till student loans are out of the way–that time gives you perspective on what is actually worth it to you.

  10. Our Next Life says :

    Oh how I wish that I had followed this advice! I definitely went straight for lifestyle inflation before I could afford to do so. My loans weren’t a huge deal compared to plenty of people, but it was still $10K in the red… plus the credit cards. All thanks to feeling like I needed to live a certain kind of life or project some image — it’s hard to remember anymore! I’m thankful every single day for having snapped out of that mindset! If only we could have had this coffee date a few years back. 😉

    • Kalie says :

      Ten years later, I can definitely see the wisdom of this advice better than I could at the time. I think we were fortunate to have a lot of friends who were not going for the major purchases and additional loans. That made it easier not to follow the pack or try to impress others. That’s interesting that it’s hard to remember why you went for the lifestyle inflation–just shows how fleeting it all is! So glad you figured it out when you did 🙂

  11. Alex says :

    This is the danger of having luxuries. Once you get nice stuff, it’s hard to go back. Thanks for the read!

    • Kalie says :

      Yep! The most dangerous part is that these things aren’t viewed as luxuries. A nice car, a new phone, and other upgrades are often seen as necessary or at least quite normal.

  12. Cash Flow Diaries says :

    I got really lucky in that I never really went to college. I mean i got an AA degree at a community college which was dirt cheap so I never had student loan debt.

    It has helped me build what I have today for sure.

    • Kalie says :

      I don’t understand why more people don’t go to community college. It’s such a good option for avoiding debt while still getting or at least starting an education. I’m so glad that degree has served you well!

  13. Melanie Lockert says :

    This is the main way I paid off my student loans. Lived in a small apartment, with used or free everything, no car, no gym, cooking at home, etc. You really do have to live like a college student a while longer if you want to make an impact on your debt.

    • Kalie says :

      A couple more years at a student lifestyle can go a long way! No gym is another good tip, and no car if possible.

  14. Frugal Millennial says :

    I love your advice and I like this quote “But the people telling them this—parents, teachers, school advisors—went to college at a time when you could pay for tuition by working in the summer! Times have changed, and some of us were railroaded into massive debt before we were mature enough to understand the implications.”

    I see so many trolls on the internet bashing people for taking on student loans and ignoring the fact that our culture treats college (and student loans) as something that is not optional. With the cost of school so out of control, it’s time to change what we tell our kids. Personal finance classes should be a requirement for high school students.

    • Kalie says :

      Yes! My high school actually did require a personal finance class, and while I didn’t absorb it all at the time, the teacher did try to pass on some practical pointers.

      I’m glad it’s become clear that the student loan situation got completely out of hand. I hope people can see that we cannot place all the blame on teenagers!

  15. Abigail says :

    Yep, it’s vital to maintain the lifestyle you need rather than the one you want. Extra income means nothing when extra expenses come due.

    • Kalie says :

      Good point–and one that too many of us have learned the hard way. There will be extra expenses at some point along the way, and being prepared for that with a simpler lifestyle can make a huge difference.

  16. Dividendsdownunder says :

    Good job for keeping such a lid on your expenses Kalie, I can tell it’s really helped you. Lots of good advice in there as well 🙂 Luckily neither myself or Jasmin (my wife) have any student debt. I hope in the long run that doesn’t disadvantage us having not gone to university.


    • Kalie says :

      I think it’s great that you have no student debt! At least in the States, there was a myth circulating when I was in school that you had to go to college to get a good job. Now it’s becoming clear that this isn’t true, and that saddling yourself with $30,000+ of student loans for certain degrees might leave you no closer to a job, and worse of financially.

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