Welcome to another installment of iontuition’s Q&A series with personal finance bloggers. We have Millennial Money Man, Bobby Hoyt, sharing his financial tips with us today.
After graduating from music school with $40,000 in student loan debt, Bobby had no real financial knowledge to speak of. He received some helpful advice, which encouraged him to start throwing all of his extra money at his loans, a strategy that allowed him to pay them off within a couple years. He started MillennialMoneyMan.com to help other people with their student loans. With $3 in profit from the blog; he took a leap of faith and quit his job to run the site. Bobby also started a digital marketing company and now is your “average 27-year-old serial entrepreneur.”
What’s the best piece of financial advice you ever received?
This may sound a little like a no-brainer, but the best advice I ever received was to make the biggest payments towards my loans that I could after college. There is a lot of different advice out there now about managing your debt and using your extra money to invest instead of paying off loans, but I think the real answer to getting rid of debt is simple: Just suck it up and make bigger payments. If you can’t afford to do that, start a side hustle and apply that extra money towards your loans. Don’t ever make excuses if there is still more time in the day to make extra money.
What’s your advice for those who already have student loans?
It sucks for a while and isn’t an easy concept for a society that is so obsessed with minimum payments and being able to “afford” new cars and expensive houses. It’s actually ok to be really cheap (aka frugal for the people that think cheap is a harsh word) and not do all the stuff that your friends are doing for a few years after college. Put your head down, pay off the debt aggressively, and watch how fast you pass everyone else once the loans are gone!
How do you stay ahead on paying your student loans back?
Start paying them back while you’re in school or immediately after! One huge mistake I made was to wait until the 6-month grace period was up on my loans. It cost me a few thousand bucks extra in interest (nobody really tells you that your loans accrue interest during that time). I wish I hadn’t sat around on my parent’s couch waiting for jobs to come to me when I should have been out hustling to get started on my loans instead.
If you could go back in time and give your 18-year-old self a piece of financial advice, what would it be?
“DON’T USE YOUR STUDENT LOANS FOR LIVING EXPENSES IN COLLEGE!!!” I would probably yell at myself just like that too. One of the reasons I had $40k of debt when I graduated was that I wasn’t very strict on myself with loan disbursements. I worked two jobs in college, but I used that money to have fun instead of paying down my loans or paying rent with it. I used my loans for some living expenses, which was stupid at the time.
Would you go to a different school if you knew what you know now about student debt?
No. I wanted to be a band director, so that’s what I went to school for. It’s hard to transfer from a community college to a four-year university for some degrees like mine, so I don’t always recommend it. I think people can still jump into four-year universities and come out with a manageable amount of debt if they take out the least amount of loans possible and work to pay them back quickly after college. Everyone gets wrapped up in going to cheaper colleges, but the truth is that a quality degree from a great school is still a strong investment. In my case, I basically borrowed $40,000 to have a career where I would make $1 million plus over the next 30 years. From an investing standpoint, that is still a killer return.