Debt Free!

How I manage to pay off my $20,000 student loan in 13 months

I graduated from the University of Toronto at Mississauga on June 9th, 2009 with a student debt total $20,000. I was pretty upset at myself for not having any saving from my part-time job during the school years.  It was depressing, knowing the difficult road that lies ahead.

For the first few months after graduation, I continue to work part-time at Wal-Mart. I was making $11.20 per hour and working between 20-25 hours a week.  I was only making enough to support my expenses, but not enough to contribute to the student loans. So, I continued to work part-time until the end of the year because I wasn’t able to find full-time employment.

A letter came in the mail for me; it was from the National Student Loans Centre.  My six months grace period has expired. I had to start paying my student loans with a monthly payment of $228 dollar. I couldn’t afford the monthly payment with the income I was making at that point. I decided to apply for the Student Repayment Assistant Program. It’s a program that assist student who have difficulty in paying their student loans.  To be eligible for the repayment assistant program, you have:

  • To be a resident of Canada
  • Have signed your consolidation student loan agreement
  • Be unable to afford the monthly payment (assess base on applicant financial situations and their income)

I looked at the requirements and I was easily approved because I met all the requirements. For six months, I did not have to make payments with interest free on my loans.

At the time, I was living with my brother and sister-in-law. I didn’t have to pay rent and which really helped me a lot. The only expense that I have to pay for was my internet and cell phone. Then there was my budgeting, I lacked the skills to budget. I spend nearly all my pay cheque on impulse buying (electronics, clothes, video games) and social entertainment (movies, dining out). I didn’t care about saving or having any financial goals, all I cared about was satisfying my needs. I know I have to make a drastic change in my lifestyle in order to be financial independence. I decided to be more responsible with my money from then on and had a mentality of save more and buy less.

I knew I needed more income if I was going to achieve financial independence. I aggressively applied to various jobs for months, but I didn’t get any call back. I was getting frustrated to the point where I convinced myself that I didn’t have the qualifications to land a good job.

In February 2010, a friend of mine recommended me for a job at FedEx Canada as an Invoicing Agent. It was a five month contract and I was pretty excited. I was getting $14 dollar per hour, it’s not what I was trained for, but it was a start. My total income from both of my jobs provided me an income of $2,400 a month after taxes. I decided to put $2,000 towards my student loans and $100 each in TFSA and RRSP. The rest goes to bills and personal spending.  I was determined to commit to this plan, but unexpected expense occurred.

On March 1, 2010, I made an appointment for a dental checkup. My tooth was in pain and I couldn’t bear it.  The doctor conducts an overall examination of my teeth and provided me with her analysis. She recommended that I remove all my wisdom teeth and also highly recommend that I get implants.  The word implants make me shiver for a moment, probably because the implants were going to be very expensive.  The doctor handed me an estimate invoice of the cost of the dental treatment. The total cost for the procedure cost $8,100. I was in shock and disbelieve. I kept telling myself that I wish I had taken better care of my teeth, but I realized I had to fix my teeth and it was not a choice. So for the next five month, all my earnings went to paying for my dental fees. I was very disappointed that I have to defer my student loan until my dental fees were all paid for.

On July 6, 2010, I finally paid off all my dental fees, but it was also the same day my contract expiry with FedEx. My manager had informed me that I did a good job and I have done everything that was asked of me, but unfortunately business was slow. The company had decided not to renew my contract.  I went back to work part-time at Wal-Mart until I find another full-time job.  With most of my earnings from FedEx use to pay for my dental fees, my student loan remained untouched. My income had reduced to $800 a month, so I decided to renew my repayment assistant program so I don’t have to make payment and pay interest toward my student loans. I was living pay cheque by pay cheque again and it was difficult for me to save with such a low-income.

On August 28, 2010, I got another contract job. It was for a company called Parmalat, an industry leader in producing dairy product. It was a one year contract for the position Data Control Representative and I was covering for someone who went on an extensive leaves. I was getting pay $14 per hour, pretty much the same as FedEx which would give me $2400 a month working two jobs.  Instead of budgeting to pay off my student loan, I decided to take a different approach. Since my repayment assistance didn’t expire until the end of the year, I decided to just save and utilize the repayment assistance.

I realized that in order to reach my goal to be financially independence, I needed to set a budget for myself and stick to it.  I created a monthly budget to keep track of my spending.

Monthly Budget

Monthly Income

  • Parmalat: $1,700
  • Wal-Mart: $700

Total Monthly Income: $2400

Monthly Expenses

  • Rogers (Internet & Cell Phone) :  $50 +$50 =$100
  • Groceries:$100
  • Personal spending (Entertainment, miscellaneous): $100

Total Expenses: $300


  • RRSP: $50
  • TFSA: $200

Total investment: 250

Total saving: $1,850 per month

After creating a budget, I found out that I could save at least $1,850 a month, so by the end of the year I save up approximately $7,200. My repayment assistant was about to expiry and I was not eligible anymore since I make over $1,800 a month.  I decided to wait until March to start tackling my student loan since tax season is just around the corner.  I needed to know how much I need to contribute to RRSP to not owe the government money since I worked two jobs which meant I would be taxed more. On February 20, 2011, I find out that I needed to contribute approximately $1,200 to RRSP to not owe the government money and to get a decent tax refund. I contributed $1,200 to my RRSP account and used the rest ($6,000) to finally tackle my student loan.

As of March 2011, I have managed to trim my student loan down to $13,000.  I am expecting a profit-sharing cheque worth around $1200 from Wal-Mart on April 8th and a tax refund cheque worth approximately $900. So, that an extra $2100 that I will use to pay off my student loan. I am pretty much throwing every penny to my student loan and I am expecting to have my student loan pay off by September.

More good news, I got a $3 dollar raise from Parmalat as of March 28, 2011. Now, I am getting pay $17 per hour which increase my monthly income to around $2,000. So my monthly budget now look like this:

Monthly Budget

Monthly Income (After taxes)

  • Parmalat: $2,000
  • Wal-Mart: $7,00

Total Monthly Income: $2700

Monthly Expenses

  • Rogers (Internet & Cell Phone) :  $50 +$50 =$100
  • Groceries:$100
  • Transportation: Montly adult bus pass: $104
  • Personal spending (Entertainment, miscellaneous): $100

Total Expenses: $404


  • TFSA: $200
  • RRSP: $50

Total investment: 250

Total saving approximately: $2,000 per month

Since my monthly income increase by $300,  I can put $2,000 toward my student loan.  If I stick to this budget, I will have my student loan completely pay off by September which is sooner than I expected, YAY!.

During the process of achieving financial independence, I have been criticize many times by friends that I work too hard and that I don’t have a social life. I told them that I worked so hard because I wanted to be financially independence, I want to be free of debt, I want to able to do things I want without any financial restrictions, that why I work so hard. As for my social life, I still make time to hang out with friends and I am not afraid to spend money to have a good time as long as the activity is worth the price I am paying for.  The people that support me and understand my situation are the people I call true friends because they will support me no matter what.

Ever since I have decided to achieve financial independence, I have been following a particular personal finance blogger who have given the confidence and motivations to succeed. Krystral Yee, a personal finance blogger for Give Me Back My Five Buckshave inspired me to take a stand against my debt and make a better life for myself. I have learn how to save money on little things such as packing lunch instead of eating out, stop impulse purchases, and canceling unnecessary home services such as cable and phone lines. Reading about her blog of how she got into debt and out of debt really inspires me to do the same with my life. It is good to know that there are people out there that are in  similar situation as I am and reading how they achieve financial independence really inspires me to write my own blog to share my experience. Thanks Krystal for giving me the inspirations I need to achieve financial independence.

On July 28, 2011 is the day that I officially achieve debt freedom 🙂. I still can’t believe that it’s actually happening. I am completely debt free. All the earnings I make from now on will be mine instead of going toward student loans or credit cards. I can actually save and start planning my future like saving for my retirement, home ownership, and investments without feeling a heavy weight on my shoulders. I am so happy at this moment that my hand is shaking as I type this post. I am still shocked that I paid off $20,000 in student loans in one year. I literally threw every penny I had on to the student loan and let me tell you it was tough to swallow. I knew I had to do it, it’s the only way I can achieve debt freedom in the time that I wanted and let me tell you it feels great 🙂.

Paying off my student loan was a long journey. To be honest, I didn’t think I had it in me.  I remember telling myself many times that it was impossible and that it would take me many years to pay them off. Each time I looked at my student loan statements, my level of stress and frustration started to rise. The amount was so intimidating. I felt lost and I didn’t know how to handle the situation. I just wanted to ignore it and pretend I didn’t have any debt, but I was in denial. I was in debt, but I needed something to motivate me. Then I came across a blog about a 20 something year old women going through the same situation as me. Krystal Yee and her story of how she became debt free inspired me. From then on, I started to organize my life with a budget and think about how I can save money. Any extra money like bonuses, GST cheque, and tax returns, I threw towards the student loan because I was so motivated to be debt free just like Krystal. All I could think about was the day when I receive my pay cheque and know that I can use it for anything I wanted. The day has finally come. My journey of paying off my student loan has made me a better person and I have learned a lot of valuable lessons  in budgeting, understanding the differences between wants and needs, setting up goals, and most of all realizing that debt freedom is not impossible. Everyone can achieve debt freedom, all it takes is a little motivation. If I can do it, you can too 🙂.

Now that I am debt free, everyone probably thinks that I might go back to my old ways and spend money recklessly. If I learned anything from my journey to debt freedom, it’s that you should never spend beyond your means, always set a budget, and understand the difference between wants and needs. I will still live a frugal lifestyle to save as much money as I can and I will continue to be smart with money so that I can achieve my future goals even faster.

Achieving debt freedom means a lot to me and I couldn’t have accomplished this myself. I like to thank God for giving me the strength and blessing to overcome all the challenges that I have to face. I like to thank my family and friends for supporting me in my time of need. Thank you all 🙂.


Student Loan: $0


3 Responses to Debt Free!

  1. Hi, Victor, found your blog via GMBMFB… Great start and keep up the good work! What is your living situation? I am impressed by your low expenses, I assume you live at home since you have no rent, utilities, etc.? Also very impressed that you are being studious with your loan repayment, my wife and I are trying to do the same.


  2. Thanks for dropping by. Yeah currently I am living with my brother and sister in law and I didn’t have to pay rent which help me a lot in achieving my goal. All the expenses I have to pay is my internet, cell phone, transportation, and food.

    I been holding back to long with this student student and reading other people blog of being financial independence inspire me to do the same. Having no debt must feel great and I can’t wait for that day to happen. From my experience, saving and paying off debt is all about having the will and determination, if you want it badly you will do whatever it take.


  3. @AmbsAA says:

    That’s so awesome Victor, congrats, you’re a SMART young men! 🙂 Don’t worry about those “friends” who don’t support your lifestyle, there’s always going to be haters out there wanting to drag you down! 🙂

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