How I became debt-free

I achieved a massive goal at the very beginning of this year.  I managed to pay off my student loan more than 6 years ahead of schedule and become debt-free!

How I became debt-free 1
Monkey looking about as happy as I feel about being debt-free.

Student loans are commonplace in Norway. They are offered by a state-owned organisation and easily granted, so they can get sizeable. And the repayment period is 20 years, so most people keep paying for them well into their 30s and 40s, depending on how long they’ve been studying for. By that age, they will have taken on car loans, credit cards and mortgages, and becoming debt-free is usually just some far-fetched dream.

Personally, I studied law for 3 years, then switched to French, then switched to English and then followed that track for 4 years, which included a compulsory year abroad.

In other words: my student loan was huuuge.

It didn’t bother me much, though. Like I said, student loans are commonplace in Norway. Also, the state-owned student loan organisation is very reasonable. They will reduce or pause repayments if you lose your job, or if your income drops below a certain point. You can also reduce your loan by living and working in certain areas of Norway. In other words, this is nothing like owing money to a bank or a credit card institution. These people can be reasoned with.

So yes, my student loan didn’t bother me much. It bothered my ex, though. He is British, and didn’t quite understand the situation. He was really stressed about the amount of money I owed. Unsurprisingly, this caused several arguments between us. Nothing new there, most fights between couples are about finances, so we were just a part of the statistic.

My debt is not why we broke up. Still, I find it kind of amusing that I managed to pay off the entire loan and become debt-free just a few years after we split up. Once I stopped spending money on our house and on dining out, I found that I was able to overpay on my student loan pretty much every single month.

Watching the monthly instalments drop with every overpayment was incredibly motivating!

I started putting every penny I could live without towards paying off my final debt (having paid off my credit card debt the year after I split with my ex).

The more I paid off, the more encouraging it was. And then I started benefiting from some sort of complicated interest rule – I had fixed my interest for three years, but as interest rates kept dropping, I was actually paying a little more interest than I would have done if I hadn’t fixed it. The student loan organisation benefited from this, but as they’re not a greedy corporation, they returned the profit to me by reducing my loan a little further. So the more I paid off, the more interest they returned, and the less I owed. And the more my monthly instalments dropped, and the closer I was to becoming debt-free. It was a very motivating cycle!

How I became debt-free 2
Confirmation that my student loan is gone.

My student loan was huge, but my income isn’t. There have been times when I could probably have had repayments suspended for a while due to low income, but I never applied for that. I hate being in debt, so I made sure I never missed a repayment, and as soon as I could afford it, I started to overpay.

So how did I find the money to overpay on a huge loan without an equally huge income? Well, I’ve always been fairly frugal, so it wasn’t too difficult.

Here are some of the many things I don’t spend money on:

  • TV – Who needs one? I watch my favourite shows on my computer via BBC iPlayer, ITV player, 4oD and My5, which is free. I don’t pay for Netflix, Amazon Prime or any other streaming service.
  • Hair cuts – I have cut my own hair since I was 18. Since then, I’ve been to the hairdresser’s twice, and both those times were birthday treats. I dye my hair myself as well.
  • Mani/pedis – Nah. I plonk some nail polish on my toe nails in summer, that’s it. And I never remove the stuff, I just layer on a new coat when needed. It’s not like anyone ever inspects how accurately the nail polish has been painted on my toeses!
  • Magazines – I have no subscriptions and I don’t buy any magazines regularly – or even irregularly. If I am going to the beach, I bring a second-hand book (I sometimes buy them at charity events) or read a free e-book on my Kindle.
  • Coffee & soda – I rarely drink anything other than water. I remember once reading that you shouldn’t drink your calories –
    Well, you probably shouldn’t drink your money, either.

    I have a cup of herbal tea in the morning, though, while I wait for my oatmeal to ‘cook’ (oatmeal is a very frugal breakfast, by the way).

  • Clothing – I am a minimalist and not fond of owning things just for the sake of owning things. Neither am I fond of shopping. I am actually in desperate need of new hiking boots, trousers and tops right now, but I make do and mend. Quite literally. To be perfectly frank: clothing is overrated. Don’t worry about what other people think about your clothes. Most people are far too worried about what other people think of what they are wearing to actually notice what the anyone else is wearing.
  • Makeup – I hardly ever wear it. I own three lipsticks, a mascara and a few eyeshadows, but I probably only apply makeup twice a year, for instance when I’m invited to a wedding.
  • Beauty products – Coconut oil is pretty much all you need. Though I prefer rosehip oil or argan oil on my face. All my beauty products fit into a CD storage box. And that includes my perfumes and cotton buds as well.
  • Hobbies – No expensive leisure activities for this girl. I used to have a gym membership, but I quit and now I go for long hikes with my monkey instead. I also used to have a lot of expensive photography equipment, but I sold it and took up iPhoneography, which is a fun and frugal alternative.
  • Parking – I always try to find a free place to park. Usually I can avoid parking fees when I go hiking simply by starting the hike in a slightly different spot.

This may not seem like much, but I can assure you that it adds up as the months go by!

Reducing the number of goals I focus on per year has also helped a lot. Having just 3-5 goals per year helps me keep them in mind all the time. This way, decision making becomes a lot easier. Should I join a gym so I have access to pools, jacuzzis, saunas and steam rooms during the dreary British winter? Or should I pay off an extra £1,000 on my student loan? Oh, the jacuzzis were very, very tempting, but becoming debt-free was my number one priority. The answer was obvious.

How I became debt-free 3
Autumn hikes don’t cost a thing.

Now that my student loan is a thing of the past, I am able to put the money into savings instead. Once I became debt-free, I realised that 70p of every £1 I make are mine, mine, MINE!!! 😀 (Just to be clear; I don’t pay 30% tax, but when I deduct all the national insurance contributions and my accountant’s fee, 70% is roughly what I am left with.) As I’m a self-employed freelancer, this little factoid has given me the motivation I needed to work harder than ever before. At the beginning of each month, I pay my rent and set some money aside for regular outgoings. Everything else goes straight to my savings.

New year, new goal

In other words, I remain every bit as frugal as when I was overpaying on my student loan. I have a clear goal for how much I want to save this year and what I am saving up for, which is just as helpful for keeping me on track as the goal of becoming debt-free was. Although now that I can keep the money I save, and therefore am motivated to work harder, I am able to save even more than I managed to put aside for my student loan last year. In fact, so far this year, I have saved twice as much per month as I had hoped (despite selling my van, buying a ‘new’ car and all the expenses that entails). Let’s hope this trend continues!

What am I saving up for? Well… I am hoping to get a deposit together so I can get a mortgage and buy my own home! More debt, you ask? Aren’t you writing this blogpost to celebrate that you’ve become debt-free? Yup – but by fulfilling my goal of paying off my student loan more than 6 years early, I have realised that my frugal lifestyle will help me pay off a small mortgage fairly quickly as well. Having my own little home is a BIG dream, and I’m determined to make it a reality.

Watch this space. 😉

Your friend in frugality,

Neens Bea xx











4 comments Add yours
  1. Congrats from me too. Having been debt & mortgage free for many years – although significantly older than you – I know that feeling – actually have only ever had mortgage debt but I’m from an age where you got a grant to go to university in this country. I’m still frequently surprised by peoples willingness to take on new debt, especially for depreciating items such as new cars. Marketing types have convinced many that it’s the norm. By the way I’m not sure iPlayer is free anymore, still it’s well worth the license fee IMV (esp Radio 4 which is free anyway lol).

    1. Thank you, Geoff! Yes, it is surprising how willing people are to take on debt – I absolutely hate the feeling of owing money and always do my best to avoid it! I think you’re right about iPlayer, fortunately my landlords’ TV license covers me so I can still enjoy it – though lately I think the only thing I’ve watched on iPlayer is University Challenge, lol!

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