Paying Down $25k in Student Loans Fast Working a Restaurant Job
I was lucky enough to get my old housemate and good friend, Lucas, to share his kick ass story with student loans last week.
Lucas paid off $25k in student loans fast — in 1 year — while working as a server/bartender.
Three years later the guy is paying all his bills through his own cocktail shrub business. Absolutely amazing.
How'd he do it? Let's find out!
What's your story? Tell us a bit about you.
I am not a finance person or very great with numbers, but I’ve managed to do a pretty decent job staying on top of my income and budget since college. Enough that I was able to start my own business right away, and grow it to a point where I’m now supporting myself almost completely, doing something I love, and that allows me ample time for the things that really matter in life, like going to the beach on a Tuesday.
Amen, man! How did you end up with student loan debt?
I knew I would end up with student loan debt long before I was accepted to UC Santa Barbara. While filling out college apps, my parents pushed me to follow my heart and apply to the schools I wanted to consider, but they were careful to admit that what they could afford to pay for was less than most 4-year university programs.
They said if I started at community college and transferred to a larger university after completing general education courses, they could pay the full ride. But if I wanted to spend all 4 years at a radical school on the beach in Santa Barbara (heck yeah I did), I would have to contribute a portion of it, which would present itself in the form of loans.
What were some feelings you had when you thought about it?
To be honest, at that point in my life I had a very naive understanding of money and what it meant to work, spend, and save. So I sort of shrugged off the concept of loans and said whatever, I would figure it out in 4 years or so.
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I remember watching you pay them back fast. Why did you decide to pay down your student loans so quick?
I remember that in my last quarter of college, I felt this sort of impending doom and resistance to the future. It had less to do with student loans than it did the end of the “best 4 years of my life” — but it made me stop and reconsider my priorities. At that point they were sort of drifting between the spaces of Dreams, Fun, Finals, and Future. I was having the time of my life, but the external world was telling me to fix up and look sharp for graduation, fine-tune my resume, and hit the pavement looking for a “real job.” Apparently it was time to start getting pale and fat and addicted to Netflix, and I was scared shitless of that narrative.
So I shifted my priorities from deciding on a career path to paying off my loans, which meant working as much as I could in the industry that would pay me the most money straight out of school: restaurants. Specifically the bourgeois farm-to-table restaurants that dot Santa Barbara's coastline like freckles. I knew from colleagues that if I worked full-time in this scene I could make $30-$60/hr and pay off my loans a lot faster than what an entry-level job in the tech industry would afford. I happened to love food and cooking, so I was a natural in the front-of-house, and I genuinely enjoyed the hustle of fine wine and expensive cuisine. The best part was that I would still have my days free to figure out what the hell I was going to do with the rest of my life.
That was the funniest part — you were still surfing on weekdays then! Pretty good way to pay back a loan. What were some of the most helpful actions you took?
I think the most helpful action I took to paying off my loans quickly was just being honest with myself and choosing to work in an industry that made the most bang for my buck at 22 years old. Deep down I felt pretty embarrassed that I had just graduated Summa Cum Laude from UCSB and was waiting tables in restaurants, while most of my friends were landing tech jobs in San Francisco, Los Angeles, and New York. But I kept reminding myself that I wanted more time to figure out where I was heading in life, and that for now money was the means, and my student loan debt was the end.
Besides maximizing my income, another helpful action was practicing extreme discipline with spending and saving. I paid my loans off within a year of graduating, and during that time I didn’t take a single vacation. I didn’t go out as often as my friends were, I wasn’t dating anyone, and I resisted the urge to purchase the usual toys like new surfboards and bike parts and clothing and whatever the hell my friends were buying. I made sure I spent under $1,500/mo. And I basically took a vow of prodigal silence that year, and it taught me a lot about how to budget and relate to money.
What'd you learn from doing that?
After paying off my loans I had a totally new relationship with my finances. For the first 21 years of my life money was just a prize, a green light, something to be celebrated and used to satisfy my wants and needs. But after I learned how to discipline myself to earn, save, and spend money in ways that made my life easier, I realized that money could indeed be treated like a prize, but it could also be used as a vehicle to personal freedom.
I had taught myself how to be clever with money, how to save way more than I thought possible, and in a shorter window of time. I saw it as more of a game than a struggle. And now that I had paid off my loans, I could play the game and have the end goal be whatever I wanted.
What have you been up to since? How has life changed?
After giving myself that year to focus on saving money and relax into a career path, I realized that none of the career paths I had been considering in college were things that would truly make me happy. I realized that if I wanted to reach my full potential, I would have to work for myself and do something that I deeply loved. That’s a pretty hard thing to do in modern times. But I knew that if I could continue being clever with money, saving carefully and spending intelligently, I could slowly chip away at crafting my dream career, even if it didn’t make any money for a long time.
So that’s basically what I’ve been doing for the past 3 years. I started a business making bottled shrubs, which are basically fruit and vinegar based syrups for cocktails and sodas. I spent my days developing the products and a rough business plan, and my nights working in bars and restaurants, maximizing my cash flow while networking and leveraging connections/skills in the industry that my products would be sold in.
What was the moment you knew you wanted to build your own business?
I remember having an “a-ha” moment one night while working in a bar. I realized that, although the path I was on now was strange, unpredictable, and unorthodox, it might be more clever and smart in the long run than it looked on paper.
That moment came when I realized that I was being paid to make and sell cocktails which contained a product that I had sold the bar earlier the same day. So I was being paid for two things at once. And the best part was that these two forces weren’t in conflict - they weren’t competing. They were working together. And I was having fun.
Now I’m basically supporting myself full-time with my business. I still have to work odd jobs in bars or restaurants every once in a while to pay some bills, but I am in complete control of my schedule and have a relatively healthy income for my age. I spend most of my time making cocktails or products to be used in cocktails, so even though I work a lot, it very rarely looks or feels like “work.” I’ve also managed to remain debt-free since paying off my loans, which feels good.
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