3 strategies to pay off $ 30,000 in student loan debt in 3 years
- Very young, Michel Valbrun experienced a financial trauma and made a commitment to do things differently.
- He was in student loan debt and was barely making any headway, so he started looking for money.
- He refinanced his loans, then started earning more and spending less until they were paid off.
- Read more stories from Personal Finance Insider.
Michel valbrun, a certified public accountant living in Atlanta and the founder of The Valbrun Group, is the son of Haitian parents who moved to the United States to pursue the American dream for their family.
At the age of 10, however, Valbrun had two traumatic experiences that had a significant impact on the trajectory of his life. “When I was 8 my family was robbed at gunpoint,” Valbrun told Insider. Then, two years later, Valbrun’s father was arrested for tax evasion. After a few years in prison, his father was deported to Haiti.
“These experiences taught me that desperation can cause people to do anything to make money,” he said. After going through this trauma, Valbrun was determined to create wealth “by making money legally and ethically”.
Valbrun attended the University of Florida, where he took out student loans to earn his bachelor’s and master’s degrees in 2012. For five years, he made minimum payments, then realized that his student loan balance hardly diminished. It was then that Valbrun decided to speed up the process of repaying his student loan.
In three years, Valbrun has paid off $ 30,000 of his student loan debt using three strategies.
Hhe refinanced his student loans to reduce interest payments
When a mentor encouraged Valbrun to invest in his 401 (k) at work, he didn’t fully understand the value of using this type of account. It was then that he started reading books by personal finance experts like Suze Orman to learn about personal finance.
This encouraged Valburn to take a close look at his student loans. It was then that he realized that he had several loans with different interest rates.
Valbrun considered refinancing his student loans and found he could save money on interest by consolidating the various loans into one loan.
Refinancing has reduced interest payments and facilitated debt management. After she refinanced her student loans, a larger portion of her payments went toward loan principal rather than interest.
After the refinancing, Valbrun decided to get rid of his loans faster and improve his financial health through lifestyle changes.
He cut his living expenses and created a student loan repayment fund
Valbrun started consuming a lot of personal finance content, which encouraged him to cut back on spending. At the time, his salary was between $ 50,000 and $ 60,000.
“I came back to live with my mother to reduce my expenses,” he said. “She allowed me to live with her and contribute a bit to the bills. It helped me increase my savings rate.” By reducing his living expenses, Valbrun had more money to apply to his student loan debt.
In addition to going home with his mother, he also improved his credit card habits. “In the past, I would use my credit card, carry a balance, and then make the minimum payments on the balance,” he said. But after learning about personal finances, Valbrun vowed to better manage his credit cards to reduce interest payments, which also gave him more money to apply on his loans.
He continued to repay his loans on time while creating a student loan repayment fund with the money he saved by reducing living expenses and interest payments on credit cards. “I kept saving for my student loans, and then once I had enough in the bank account to pay it off, I just made a big payment of $ 19,000,” Valbrun said.
He increased his income by starting a side activity
After volunteering as a tax preparer for years at Volunteer tax assistance program, Valbrun started offering paid tax preparation services in 2016; he was determined to get rid of his student loan debt to move closer to financial freedom.
“I wanted to speed up the process to put myself on the path to financial prosperity,” said Valbrun. His extra income from the side turmoil gave him extra resources to pay off debt faster.
The repayment of his student loans allowed Valbrun to invest more in his business and to become a full-time entrepreneur. Now, two years after paying off his student loans and a year after turning a side business into a full-time job, the Valbrun company has generated more than half a million dollars in less than a year.