How a lawyer paid off $200,000 in student loans in less than 2 years – Business Insider

  • Erika Kullberg graduated from Georgetown Law with $225,526 in student loans and a well-paying job as a corporate lawyer.
  • After she joined the workforce, she maintained a frugal lifestyle similar to when she was a law student, dedicating over 80% of each paycheck to her loan payments —or about $9,000 a month — to pay all of the loans back in 23 months. 
  • From resisting unnecessary spending to refinancing her loans, Kullberg broke down the four key ways she budgeted her money for Business Insider.
  • Visit Business Insider’s homepage for more stories.

In 2016, Erika Kullberg graduated from Georgetown Law with $225,526 worth of student loans a well-paying job as a corporate lawyer.

But it wasn’t until a few months after graduation that she realized the gravity of her debt and the importance of getting rid of it as soon as possible. 

“It was only when I started receiving an onslaught of letters in the mail with unfamiliar terms, like “grace period” and “forbearance”, that I started to panic. That’s when it began to feel real,” she wrote in a blog post that relays her two-year journey.

Eager to become student loan-free as soon as possible, Kullberg set out to pay off the full amount in just two years.

To do this, she told Business Insider that she kept the “same frugal lifestyle she was living as a law student.” She dedicated over 80% of each paycheck to her loan payments, which came to around $9,000 a month.

Even with the good fortune of a well-paying job, the task of paying back over $200,000 in loans was both overwhelming and daunting. 

“I was embarrassed that I knew so little about my student loans, but I knew I needed to get control of the situation if I was ever going to achieve my goal of eventually starting my own company,” she wrote in a blog post. “That week that I had this panic-induced revelation, I spent over 60 hours scouring the internet for everything I could learn about student loans.  By the end of that week, I had formulated an action plan for how I was going to pay off my student loans.”

The process of paying off the debt included refinancing her loans, setting up a loan tracker, setting a pay-off date, and most importantly, budgeting and tracking expenses. By doing this, Kullberg was able to pay off her loans in 23 months and has since moved on to start her own firm, Plug and Law, which provides legal protection for websites, blogs, and online businesses.

In an interview with Business Insider, she broke down four key ways she was able to cut expenses and save money on a regular basis. 

1.  Unnecessary shopping was kicked to the curb

The typical family spends $1,700 on clothing every year, according to the Bureau of Labor Statistics.

While experts have told Business Insider that it’s okay to allocate about 7% of your income towards building a wardrobe from scratch, cancelling your next order could mean a big difference if you’re trying to save. 

“For two years, I didn’t buy any new clothing. That was probably what most people would consider the most extreme” choice she made, Kullberg told Business Insider.

2. She only traveled using credit card points

Points-only flying is common practice for travelers on a budget, and can mean thousands in dollars saved if you’re a frequent flyer.

“I didn’t do any out-of-pocket travel,” Kullberg explained. “I just learned how to credit-card point hack.”

Even in the pandemic age where flying seems scare, banks are adding non-travel benefits to some of their best rewards cards, which could mean long-term savings and future flyer benefits. 

3. She made lunch as often as possible

Using services like Uber Eats and Seamless, or going out to eat regularly can really add up.

Though the data varies by generation and state, Americans spend thousands of dollars a year eating out. 

“The problem that most professionals fall into is that right after graduation, you’re making more money, so you’re inflating your lifestyle, and suddenly you’re ordering Uber Eats, taking Ubers, and going out to more dinners, ” Kullberg said. 

A key factor, she continued, was making sure that the new lifestyle of spending more for these luxuries didn’t creep up on her.

4. She refinanced her loans with a variable interest rate

Kullberg told Business Insider that by refinancing her student loans, she saved thousands of dollars in the long run.

“I was very strategic about how I went about it in the beginning,” she explained. “I pitted the refinancers against each other. I basically got quotes from this guy, quotes from this guy, and then I would take those quotes and go to other person and say, ‘so-and-so gave me this rate, can you beat it?’ I kept pitting them against each other until I got a really really low interest rate, and that’s when I finally decided to refinance.”

Every time her interest rate would creep up a bit too much, she said she would renegotiate by sending some emails. 

“Since I opted for the variable interest rate, every month or two the interest rate would go up. Once it got to a certain threshold, I would go through the process of re-refinancing the loans to reduce the interest rate once again.  Throughout the two-year period, I re-refinanced my student loans three times, each time resulting in a significantly lower interest rate,” she wrote in a blog post.

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