I recently realized that I’m turning 30 in a few weeks. As I was reflecting on entering my 30s and the things I’ve achieved, one thing occurred to me – I must be in the minority of recent lawyers that will be entering their 30s with absolutely no student loan debt remaining.
This is sort of interesting when you think about it. Student loans have become so normalized in our society that we just expect everyone to have them now. This is especially true for most high-income professions that require many years of post-college schooling. When you include all the time spent accruing debt in grad school, it’s not uncommon for someone to keep their debt around for a decade or more. A lawyer graduating at age 25 could easily still have their student loan debt kicking around until they’re 35 or older. know of dentists that will be paying their student loans well into their 50s!
A common refrain is that you’ll pay more on your student loans sometime in the future. Maybe early on in your career, the money just isn’t there or you’re getting used to your salary or whatever other excuse you might make as to why you’re dragging out your student loans instead of attacking them hard.
Here’s the thing though. When you’re in your 20s, paying off your student loan debt (or really any type of debt) is so much easier compared to when you’re in your 30s or later. Why wait to pay them off when it’ll only get harder later on?
There’s No Expectation That You’re Supposed To Be A Baller
The main thing that holds most people back from crushing their student loan debt fast is the belief that they need to be a baller right out of school. (baller = looking and acting successful or otherwise having an indulgent lifestyle). It’s why most people graduate and immediately upgrade themselves to a luxury apartment when they were once perfectly fine living in a regular apartment.
The thing is, as a 20-something recent grad, there’s absolutely no expectation that you need to look like a big shot. This is probably the #1 reason that paying off your loans is so much easier in your 20s compared to any other time in your life.
Most people won’t expect a 20-something to live in a fancy place or foot the bill at a restaurant. When I went out for coffee or met mentors for lunch, all of them naturally paid for me even though I was making terrific money and probably had fewer expenses then they did. Heck, even when I went out to eat with my parents, they’d insist on paying even though I was making more money than they were! But it made sense. As a mid-20s young professional, no one expected me to be a baller.
This is actually maybe a small benefit with student loans. They’ve become so normalized in our society that even when you graduate and land your first real job, most people assume you must have student loans, and thus assume a big part of your paycheck is going towards loans. When you get into your 30s and older, people will begin to assume that you have money to spend. In your 20s, not so much. Use that fact to your advantage.
Your Friends Aren’t Balling Yet
This is the second fact that makes paying off your student loans in your 20s so much easier compared to any other time in your life. Most of your friends won’t be making a ton of money during their 20s. Sure, there will be some who are crushing it and will want to let you know. But you’ll also have a ton of friends who live completely modest and normal lifestyles out of necessity. If you want to succeed with your student loans, just live the way your normal friends are living.
A lot of how you spend your money comes down to the people you hang around with. Even if you’re not trying to keep up with the Joneses, the fact is, we all do it without thinking about it. But the great thing is that in your 20s, you won’t look weird trying to save money by living in a modest apartment and biking to work. Most people in their 20s already do that because they have to. But as you get older, living modestly starts to look weirder and weirder.
My advice is to try not to look like the richest person in your friend group. Just stay in the middle of the pack and use your extra money wisely.
Pay Off Your Student Loans While You’ve Got The Fewest Expenses Of Your Life
There’s no doubt that for most young professionals, your 20s are the time when you’ll probably have the fewest expenses of your life. You likely won’t have kids or a mortgage yet. At most, you have rent, some utility bills, and whatever other basic costs of living you have. For most of us, there probably isn’t any reason that we have to spend a ton of money each year.
It’ll only get harder as you start acquiring all the things grown-ups are supposed to have. People in their 30s have to worry about their kids. People in their 40s and 50s think about their mortgage and the cost of college for their kids. In contrast, in your 20s, you basically just have to worry about yourself.
With so few expenses early on in your life, why play around with your debt? Just get rid of it now when you don’t have all that much to worry about.
Pay Off Your Student Loans Now While It’s Still Easy
You’ve got the rest of your life to work and earn money if you want. Spending just a few years of your life living modestly and crushing your student loans will make the rest of your life so much easier. You’ll be able to move without as many worries. Or switch careers without thinking too much about it. Really, anything you want to do, you can do it.
Two or three years of investing less won’t destroy you either. You can easily catch up down the line. But keeping your student loans around adds risk and stress to your life that most people just don’t need.
Under a standard 10-year repayment plan, I’d still be paying my student loans today and all the way into my mid-30s. I could have easily played around with my debt and given myself excuses as to why I was keeping it around.
But instead, paying it off right away, during the easiest time in my life to pay off loans, set me up for a much easier financial future.
Make things easier for yourself now while you have fewer things to worry about. It’ll probably only get more complicated down the line.
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More Recommended Ebike/Scooters
Check out these other ebikes and scooters I've reviewed:
- Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
- Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
- Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
- Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
- Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
- KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
- Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
- Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
- Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
- Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
- Varla Falcon Scooter – The Varla Falcon is an excellent scooter that offers a good amount of power at a lower price point compared to more powerful scooters. It’s not exactly an entry-level scooter, nor is it a high-powered scooter. I think it fits somewhere in-between those two categories – an intermediate scooter if I had to give it a category. Check out my Varla Falcon Review.
- Hiboy S2 Scooter – The Hiboy S2 is an excellent entry-level commuter scooter that's perfect for someone looking to save some money in transportation costs and improve their commute. Check out my Hiboy S2 Review.
- Hiboy S2R Scooter – The Hiboy S2R is one of the more interesting electric scooters I’ve been able to test out. It’s not a high-powered scooter, but for an everyday transport option, it’s very useful, especially given some of the unique features that it has. Indeed, for the price, the Hiboy S2R might be the best value scooter I’ve used. Check out my Hiboy S2R Review.
- Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.
More Recommended Investing App Bonuses
For additional investing app bonuses, be sure to check out the ones below:
- M1 Finance ($100) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
- SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
- Webull (20 free stock shares) – Webull's current promotion gives you 20 free shares valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free shares using Webull.
- Moomoo (15 free stocks) – Moomoo is a free investing app currently offering 2 different referral bonuses if you open an account using a referral link. Read my Moomoo referral bonus guide for more information.
- Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
- Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
More Recommended Bank Account Bonuses
If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.
- SoFi Money ($325) – SoFi Money is a free checking account from SoFi. They’re currently offering a $25 referral bonus if you open a SoFi account with a referral link and deposit $10. You can also make an additional $300 as well if you complete a direct deposit. This is a good bank that is also 100% free, so you won’t have to worry about managing this account. Here’s a post I wrote with instructions on how to earn your SoFi Money bonus: SoFi Money Referral Bonus: Step By Step Guide.
- Upgrade ($300) – Upgrade is a free checking account that’s currently offering a $300 referral bonus if you open an account and complete a direct deposit. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Here’s a post I wrote with more details: Upgrade $300 Referral Bonus – Step By Step Directions.
- Fairwinds Credit Union ($175) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
- Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
- US Bank Business ($800) – This is a fairly easy bank bonus to earn, since there are no direct deposit requirements. In addition, you can open the Silver Business Checking account, which comes with no monthly fees. Check out how to earn this big bonus here.
- Fifth Third Bank ($200) – This offer is limited to customers in the following states: Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, West Virginia, and South Carolina. If you don’t live in one of those states, you won’t be able to open an account online but you can still open an account in-branch if you happen to be visiting a city that has a branch. This is a fairly easy bank bonus to earn, especially since there are plenty of data points showing what will trigger the direct deposit requirement. In addition, you can open the Fifth Third Momentum Checking bank account, which comes with no monthly fees or minimum balance requirements. Read my guide on this bonus here.
- GO2Bank ($50) - GO2Bank is an easy bank bonus that I recommend people take advantage of if they have an easy way of meeting the direct deposit requirement. I like that it’s easy to open the account and that the bonus pays out quickly. Check out my step-by-step guide on how to earn your GO2Bank $50 referral bonus.
- Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
- Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
- Varo ($25) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $25 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
- 5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
- US Bank Business. US Bank is currently offering new business customers a $800 signup bonus after opening a new account and meeting certain requirements.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account.
- Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.
Feel free to send Kevin a message here.
It’s so true that folks look at modest living differently once you’ve reached a certain age and they assume you should care about X or Y.
Right! Once you start having kids especially, I bet the pressure to keep up and look a certain way mounts. But when you’re just some 20-year old, no one cares how you live. There’s not a lot of pressure to live large in your 20s except if you want to impress all your friends with how baller you are. Now, if you’re 30 with kids and living modestly, people start thinking you’re very weird.
Guys, I’m *ahem* like old n stuff (40 ish) and still have student loans! It’s disgusting (and what happens when you go back later to get another degree). At the very least, pay off the first one before you get a second one! Finally getting around to crushing g it now.
Totally agree with paying off the first one before getting the second one! Better to not keep accumulating if you you can help it.
I have a vague dream one day that I might go back to school when/if I become financially independent and snag myself a library science degree, then try to become a law librarian. I don’t think you hear a lot of people talking about financial independence to then go back to school.
The best part of FI, from my perspective, is that you don’t have to follow any set of rules! It makes a ton of sense to me…going back to school while managing a FT career is extremely challenging.
I have a vague dream that I’d like to go back (again) someday and get my law degree! I’m in the pharmaceutical industry and there is a need for health/regulatory legal expertise. I’ve looked into it a bit…but unless it becomes possible to obtain a law degree on-line, probably not something I’ll actually wind up pursuing.
If you ever have any questions about law school, let me know!
People don’t realize when they’re buying these baller things and trying to be like these other people that those supposed “ballers” have $20K car loans and only make $26K (true story I heard yesterday.) So many people are trying to live an unrealistic lifestyle in their 20’s. That’s why I love read other PF blogs. I can vent about this stuff to people who understand. 🙂
Haha, I know, we’re always venting about this stuff with each other. I used to look at people with all the baller stuff and assume they were loaded. But the interesting thing is, now when I look at people with that stuff, I assume they must be broke. It’s the unassuming people that I assume must have some money in their pocket.
???? the 20k car loan on a 24k salary reminded me of “Bumblebee.” I deployed with him to Africa when I was in the Marines. We made pennies, but there were zero expenses out there so most of us came back with solid chunks in savings.
Bumblebee’s one obsession in life was ownership of a Cadillac CTS. Unlike most people’s deployment dreams, Bumblebee came back and made his dream a reality.
Unfortunately, it was repossessed in short order since he couldn’t make the extortionate payments. But for a time, he lived the baller dream.
You got it, FP! I wish I would have taken this advice. We were in our early 30s before we paid off our student loan debt. We should have taken the opportunity to live like students in our early 20s and paid down the student loans (and we shouldn’t have bought a house and financed cars).
Getting the student loan debt gone in your early 30s still isn’t so bad! Oh the house thing is another thing a lot of people do. Instead of paying down the debt first when its easy, people go ahead and get a giant house right away when they don’t need it. That’s basically a recipe for keeping your student loans around for a decade or more.
Exactly right. Like MMM says “pay off your debt like your hair is on fire”.
Curious if you’ve ever encountered friends who insist on having savings AND debt? When I asked them why they wouldn’t just pay off their debt with their savings so they don’t have to pay interest anymore, they tell me it’s because of “peace of mind”. Mathematically it makes NO SENSE, but I guess, this is an emotional decision for them? Any thoughts on this?
I can see where people come from with the peace of mind argument. Once you throw the money into the loans, it’s basically gone forever. And then WHAT IF something happens and you need that money.
The thing is, I think that a lot of us millennials overestimate how much we need for an emergency fund. When you’re in your 20s, with few responsibilities, you have so many ways to earn enough income to survive that a big emergency fund almost becomes unnecessary. Maybe keep enough to cover rent for a few months. But really, if you’re in your 20s and have some skills, you should 100% be able to either get a new job or make enough money to cover yourself while you get back on your feet. Heck, if I needed to, I could probably survive doing nothing but Airbnb and Postmates for a few months until I could get myself a better paying gig.
I think mathematically it depends on the interest rates. I do have savings/investments AND student loans but much of those loans are at interest rates below 2% and some slightly above it. I think I can earn a better return on my money at those rates. If I were just inflating my lifestyle and spending then paying off that debt is a much better use of my money. But if you are disciplined with your money and are frugal then the decision is different. I think many people who pay off debt at an ultra low interest rate do so as an emotional decision. They just want that debt gone. That decision is fine…different people have different mindsets and peace of mind is worth it.
The interest rate arbitrage idea makes sense to me, but I always wonder if people underestimate the impact of risk in their analysis. It’s not exactly just, compare interest rate on debt vs. compare rate of return, right? There’s risk of default, cash flow issues, etc. Not exactly sure how you quantify it, but I think there needs to be some thought put into for risk.
Really though, in my opinion, the vast majority of people who say they aren’t paying down their loans because their investing more are fooling themselves. Most people I think just end up spending the money somewhere else.
My other thought is that it’s not so hard early on to play catch up. If you’re in your 20s, take 2 years to pay off all your debt, you’re only 2 years behind. Early on, it’s not all that hard to catch up. It’s when the amount invested starts getting really big that it gets much harder to catch up.
Absolutely agree that most people end up spending it elsewhere, but I think for many of us personal finance blog addicts, we’re are pretty disciplined with our money. So as for the majority of people, I will say that paying off the loan is the best thing you can do.
As to your other thought, for someone on the other side of the pay off debt versus invest debate, you can say if you’re in your 20s, if I had taken 2 years to really max out my investments, that with compounding, I might be really ahead now. How about as a compromise…do both! =)
Hey, I can’t disagree with doing both! It’s sort of funny, we PF addicts basically argue about which good thing to do. It’s like should I eat broccoli or should I eat brussel sprouts. I think either one will probably get the job done in the end.
Great points. I especially agree with the “fewest expenses” part. Most young professionals in their 20’s don’t have the other expenses you mentioned, like a mortgage, kids, or maybe even health-related expenses. These can really eat into one’s budget.
Exactly right. Life can be so cheap when you’re in your 20s, and the great thing is that it doesn’t look weird at all to be living pretty humbly as a 20-something year old. Trying to cut back and live on less when you’re balancing a family, kids, mortgage, and societal pressures is way, way harder.
Hey FP!
I agree with your instinctive hatred of debt. I left the Marine Corps Reserves when a supervisor tried to bully me into going into another unit. Since I still had a year of unobligated time left on a bonus to the Marine Corps, I had to repay the 5k at a 1% interest rate. Stupidly I wanted to pay it off for years, but of course prioritized everything with a higher interest rate. It was still paid off in good time, but emotionally I’d rather have had it gone from the get go.
At just 5k, I would have totally bit the bullet and just paid them off quickly. Optimizing finances is fun and all, but none of us can perfectly optimize everything.
Oh, if only. I had twice that in 6.8% loans from UCLA. That got the attention. I’m still unsure how, but my wife got hers consolidated into a 3%. One by one the dominos fell. Next task, the mortgage!
Amen, FP!
There is pressure these days to keep up with the Joneses; have a nice $20-30k car, buy a house, and posting FB pictures humble-bragging about the new purchase or trip.
When I tell people I’m attacking debt and paying ~50% of my income towards payments most of the time the first thing they say is their excuse why they cant pay more (too many bills, kids, Christmas, not enough money, etc.).
I ‘m determined to lift the Student Loan debt weight off my back soon so I can focus on bigger and better things in the future.
Will be great when your student loans are gone! And the great thing is that it’s not really all that weird to just live humbly as a young person. I could probably eat Ramen every day and it wouldn’t look that weird. But if I’m doing that when I’m in my 30s or 40s, it’ll look so much weirder. We don’t need to be big shots just yet.
Hey FP, welcome to your 30s!
I agree with the underlying concept of your post. Live below your means in your 20s. Fight the urge to be like everyone else and buy bigger houses, cars, etc. So many of my friends moved into big houses during their 20s. It made no sense to me. They didn’t have any kids, yet felt like they needed this huge house for just the two of them. And I know they had (and probably still have) big student loans.
We paid off my wife’s student loans as quickly as possible. She didn’t have a ton, but I hated having it around and wanted to get rid of them. At the same time, I did focus on paying myself first and saving for my future before I allocated any money towards loans. I think that’s the most important habit to get into once you leave school. Come up with an amount to save each month, and then an amount to allocate to loans. Then automate it. If you never see it in you’re paycheck, you’ll never miss it.
Thanks for sharing!
Automating is definitely key. It’s the only way I’m able to save to the extent I do now. If I was thinking about it after the fact, there’s no way I’d pull it off.
I think this is true with basically all financial goals. Just do it. Right now. Because it really doesn’t get easier just because you get older. If you let them, your expenses expand over time to fill all available space and you’ll never feel like you have enough to pay more on loans or save more in your retirement accounts.
Exactly true Ellie. We always think we’ll be able to do it tomorrow, but something else will always come up. I think that with student loans especially, its just so much easier to pay them off right away, before all the really big responsibilities come into play.