How I’m Using My Entire Salary to Pay Student Loans
Alrighty folks, last Friday I mentioned how I decided to make a mental switch in how I view my income to help me increase my debt repayments. I’ve spent the weekend working it out, and I think I’ve come down with a solid plan. Below are the steps that I am taking to begin using my entire salary to pay my loans and use tip money/side hustle money for living expenses.
1. Re-organize my bank accounts.
Previously, I had one checking account and one e-banking account with Bank of America. I used the e-banking account as my savings and the checking for everything else (I’ve also used my credit card for expenses and immediately paid in full from checking to earn Rewards Points). What I’ve now switched to is having one Checking, one E-banking, and one Money Market Savings account. The Money Market will hold my savings and will earn .03% monthly (gettin’ crazy with the interest here), while the Checking will function as my living expenses account and the E-banking will be strictly for loan money. My salary will be placed in E-banking each month so that it stays separate from living expenses funds. All tip and side hustle money will be placed in the Checking to use for living expenses.
2. Keep a “Supply Stash” just in case.
Currently, I have about $300 in my checking account. Normally, I would put this money to my loans at the end of the budget cycle when I received my salary payment. This month, I am going to hang on to this money as a “Supply Stash” just in case the end of the month comes and I really need the money for something (tires, oil change, etc). Any huge emergencies (all I can think of now is terrible car problems) would be taken out of my savings.
3. Decide on Payment Schedule.
Salary Money: All loan minimums will be paid as soon as I get my salary. For the first month, I will save leftover salary money, just in case. On the last business day of the budget cycle the remaining balance will be applied to loans.
Tip Money/Extra Side Hustle Income: Will go straight to checking to use for living expenses. On the last business day of the budget cycle the remaining balance will be applied to loans.
4. Clearly Define My Budget.
I pride myself in being a good at budgeting, but to be able to live on tip money, I will need to have a very clear place for each and every dollar to go.
| Item | Amount |
| Savings | 250 |
| TollTag | 40 |
| Gas | 160 |
| Groceries | 80 |
| CrossFit | 72.25 |
| Arbonne | 100 |
| Misc | 50 |
| Total | 752.25 |
That above number is a little overwhelming at first. The reason I am keeping CrossFit is because it really is the only way I’ll actually work out. If I go home after work, it does not happen. I feel better, sleep better and enjoy the challenge that CrossFit always is to me. Additionally, it is a nice mental break to see friends at the gym. And, if I’m no longer going out with friends, this will be a necessary thing. As for Arbonne, I have very sensitive skin and Arbonne products are so far some of the only products that don’t irritate my skin (I also am a vendor, so I get a hefty discount on the items). To make all of this happen, I have to make at least $752.25 each month in side hustle. To ensure I have enough, I’m going to make it my goal to make at least $800 in side hustle each month to make sure I’ve got my bases covered.
5. Increase Income.
If I want to keep my gym membership and Arbonne products, I have to make sure that the side hustle is one of my top priorities. At the restaurant, I am currently guaranteed every Saturday night since I have been there for so long. I spoke with my manager this weekend and he has also guaranteed me a Friday night shift for as long as I wanted it (they hadn’t given it to me before because I have been so stressed with school).
My next endeavor is to pick up Thursday nights (I could have these if I asked) and to try and get a tutoring gig. Heck, I’m always looking for ways to make some extra money, so hopefully there will be more added to this list later on. I just have to keep my end goal of $800 extra each month my top priority!
6. Reduce Expenses.
STOP. EATING. OUT. I struggle with this more than anything!! Once I start this plan, eating out is NO MORE! I’m going to start with a 30 day challenge and then go from there.
Other items that will also be cut: new clothes, getting my nails done, movies, spending money out with friends, and really any other unnecessary expense. Not even in those extreme moments when I feel like “I really deserve this!“. NO.
So dear readers, here it is! I’m looking forward to this challenge and having your support the whole way!
Do you think I can do it? Any suggestions or anything you would change?
Debt Free Tejana 
I think you can do anything you set your mind to! Wow I’m original eh? 🙂 The stopping eating out challenge was pretty easy for me. Start by swapping a night out with friends and do a potluck instead. You still get the social aspect, but it saves a lot of money!
Haha, thank you Tonya! Maybe I can switch eating out with going to the gym more…? I love the potluck idea though! 🙂
Really interested in seeing how your grocery budget goes! I was never able to get mine under $100/mo 😦
Me too! In college my grocery budget was only $40 a month and I always made it (I also mainly lived off of pasta), but I’m really aiming to get this. Maybe I’ll just get smaller portions, but we shall see!
Looks great! I think switching your income like this will do awesome things for you. You will be super motivated on your side hustle! You can do this! Way to go!
Thank you for the support! I’m hoping this will start to kill my debt quickly!
Very organised! I love how you find the energy to teach then work weekends. Not sure how you do it. When I leave school on Fridays I’m smashed. I wish I had your drive. Keep up the hard work!
It’s been really hard but seeing debt go down has been hugely motivating!
I look forward to following this debt attack plan. Two years or so will fly by, and wouldn’t it be great to have the lion’s share of the debt paid? You are young, and then you can really make plans for your life with that debt slain! I think as you reduce more and more debt, you will be motivated to kick it all to the curb as fast as you can.
Thank you Isabella!! I’m hoping to have it all paid off by May of 2015 and then I can start SAVING it all!! Saving actual money will be lovely!!
Wow, that’s a huge goal! I personally think you should budget a little fun, but maybe that is the skin products and crossfit. I wish I worked as a waitress at night. I’ll look but many people here want experience. I think you are doing a great job and so very dedicated to paying off your debt.
Thank you! What typically happens is that I will save money in one budget category and use it for something else (like a night out). So if I only spend $130 on gas one month than I have $30 extra in “play” money.
This is really ambitious and it’s awesome you’re setting out to do it. You have a great plan in place and it seems like you’ve got the motivation down, so I don’t see anything stopping you. Good luck!
Thank you E.M.!
I would recommend building up your cushion/emergency fund a little more before putting everything towards your debt. I understand how much you want to pay it off and stop paying all that extra interest, but I would wait until you have at least $1,000 cushion.
That’s a great point Stefanie! I am also a firm believer in savings for all of the “rainy days” and “just in case” moments in life, which is why I transferred my savings to a more secure Money Market that yields some kind of interest. To make me feel more “secure”, my ER fund is more than $1k, but that was my initial goal when I started getting financially fit last January. My biggest fear is that something will happen to my car. I commute about 26 miles to work, so it would be KILLER! So, I made sure to allocate enough in my budget each month to have a savings that could handle those types of accidents.
Wow, that is impressive! Wish you all the best of luck in implementing this.
Thank you so much! Stay tunes for updates 🙂
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