This chemical engineer, who has saddled a ‘terrifying’ debt burden, has reduced her six-figure student debt and is ‘loving life’ – Morningstar | CarTailz

By Jennifer Weiss

To expedite her debt payments, Siu-yee reduced her expenses, increased her income, and moved back in with her parents

Siu-yee graduated from a private university in 2018 with a degree in chemical engineering. But she also walked out of school in Pennsylvania with six-figure debts.

The 26-year-old got a job in her field and paid $66,000 straight out of school, rented a car and rented a one-bedroom apartment. When Siu-yee collected her first paychecks, she feared she would spend all her income on her debts forever and realized she had to make a change.

“I started making a decent amount of money for someone my age, and I made way too much money to just end up putting it in debt,” Siu-yee told MarketWatch. “It was really scary for me to think I was going to have all those payments.”

Read: How a Connecticut Pharmacist went from $230,000 in debt to $0 and changed his whole life

She totaled her debts and when she saw that she owed about $124,000 in student loans, she was horrified. Also shocking are the interest rates on some of their personal student loans, which have ranged from 7% to 11%. Part of her debt, approximately $21,000, was interest accumulated during her four years of college.

Meanwhile, she went into even more debt while paying off her federal loans. To maximize those loan payments, she took her monthly living expenses off of a credit card with an introductory 0% APR. She also used the card for other purchases, like her dog Percy and the accessories he needed.

“I was really embarrassed to be in so much debt,” she said. “I rarely talked about it with my friends.”

After adding up her debts, she got down to business. “The first thing I looked up was how to pay off a student loan debt,” she said.

She found Dave Ramsey, Graham Stephan and Aja Dang on YouTube and used the lessons from their channels to transform her financial life.

Siu-yee began budgeting, using what is known as a zero-based budget, which means she put every dollar of her income toward expenses or debt. That helped her focus. “I made sure I was budgeting for what I needed to spend on and drastically scaled back what I wanted,” she recalled.

In particular, she cut back on her spending on groceries, clothing, and eating out.

She said she’s reduced her grocery expenses to less than $50 a month by buying non-perishable or long-life foods like dried beans, rice, pasta, canned tuna, protein powder, and frozen fruits and vegetables. Back then, she was able to snag 128 ounces of Quaker Oats on Amazon for $11. (Recently the price was $15.)

Siu-yee stocked up on flour and other ingredients to bake bread, cookies, tortillas and pancakes, and she made her own oat milk and protein snacks. She prepared several meals each week. All of this meant she rarely had to do much grocery shopping.

While cutting costs, Siu-yee increased her income by taking part-time jobs. She drove for DoorDash and Postmates, wrote online book reviews, and began offering her services as a ghostwriter at Upwork. She used her extra income to pay for her personal expenses and tucked her 9-to-5 salary into rent and debt.

She also boosted her salary at her day job to $92,000 by negotiating raises.

She gave up her apartment and moved back to live with her parents in New Jersey to pay off her debts faster. Siu-yee was born in Ecuador to Ecuadorian immigrant parents, her mother a Spanish teacher and her father a machinist.

This helped her pay off her car lease and even bought the car from the leasing company.

In her quest to lower her interest rates, she consolidated and refinanced her student loans several times, eventually lowering her interest rates to less than 3%.

Inspired by the personal finance YouTubers she learned from, Siu-yee also started her own YouTube channel, Frugality & Finance, on the side to break down her budget hacks and share the lessons she learned.

One of the people Siu-yee helped was her mother. And after her mother budgeted her way out of her consumer debt, she began helping her daughter, eventually contributing $29,000 towards Siu-yee’s debt settlement.

Siu-yee has since retaliated by contributing to her parents’ mortgage, which covers half of her monthly payments for a total of about $3,800 to date.

If she could go back and do something differently, she would have applied to public universities in her state, she said.

“College is a business,” she said. “And it’s really important that you make an informed decision about who you want to do business with.”

Siu-yee calculated that her debt, including her student debt, car loans, credit card debt and interest, went from more than $159,000 to zero.

“And now I’m finally here,” she said, “debt-free and just loving life.”

Paul La Blanc contributed to this article.

-Jennifer Weiss

 

(ENDS) Dow Jones Newswires

11/17/22 1043ET

Copyright (c) 2022 Dow Jones & Company, Inc.

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