Repaying student loans can sometimes take up to decades but a 24-year-old University of Michigan computer science graduate says he repaid his US$61,400 debt in one and a half years.
According to Forbes, Muneed Ahmad said he followed in the footsteps of his siblings who all raked up tens of thousands in debt from student loans, but paid them off in a short span of time.
“All my elder siblings finished their schooling in Pakistan and came to the US for university,” he told the magazine.
“They all racked up loans but were able to maintain a humble lifestyle and pay them off quickly. Following their path, from the beginning, I knew that short-term sacrifices would lead to long-term gains.”
On living within his means, Muneed said upon graduating, he moved into his brother’s one-bedroom apartment, where he slept on a mattress on the floor in his lounge.
“Moreover, working at BMW meant I got a hefty discount on a car lease and despite the fact most of my coworkers had a car, I chose not to keep one to save a few hundred dollars every month,” he said.
“I almost always took public transit, and if public transit was not available, I would take Uber Pool as it is half the price compared to the regular Uber.
“In the moment, it only seems like a US$4 difference, but over the months it adds up, and those are the types of recurring expenses one needs to watch out for.”
Muneed said he created a budget, but found that sticking to it was the difficult part.
“I maintained a separate Excel spreadsheet that I used to keep track of how my money was actually spent in the last month compared to what I had budgeted,” he said.
“If I came across any category on which I overspent, I would make sure I spent less in that category the following month.”
He also said he knew he wanted to pay off all his loans in two years, which was what drove him to stick to the budget, adding he got his priorities straight.
“For example, my health is extremely important to me and even though US$100/month on a gym membership is a lot of money, I knew that it was more important to me than going out to bars, restaurants and concerts like most people my age.”
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