My Mom’s Budgeting Advice Helped Me Pay Off My Loans and Buy a House

By Charlotte Cowles

| Photographs By Nina Leen, Getty Images

In the U.S., the median age of first-time homebuyers is 32 years old, and they’re a shrinking population: Per the National Association of Realtors, first-timers made up only 35 percent of home sales in 2017, down from about 50 percent in 2010.

As usual, you can blame student loans — the Federal Reserve Board found that an increase in student debt correlates with a decrease in homeownership. And given that the average student debt-holder is still paying off loans into his or her 40s, it’s not surprising that fewer people in their 20s and 30s are eager to dive into mortgage paperwork.

Which makes this story, about a 22-year-old college student who paid off her student loans and purchased a home before graduating, even more rare. Here’s how she did it.

This might sound psychotic, but in college, I started keeping spreadsheets where I itemized all my expenses, right down to the dollar, at the beginning of each month. I knew how much money I would make from my various jobs, so I would determine what to put into my savings account so that I still had enough for groceries and emergencies. Then, by the end of the month, I would usually have at least a hundred dollars left over, and I’d put that into savings too. I wanted every step to be forward, not backward.

My parents grew up with hardly anything, and watching them work really hard for what they could get made me value education and financial independence. I remember my dad telling me that if he could go back in time, he would have tried to buy a house when he was the age I am right now, 22. If he’d been building equity all those years, he would have had a lot more financial freedom, and wouldn’t have been stuck with rent and bad landlords. Meanwhile, I had other family members who had to rely on government assistance, or had a hard time getting a job because they’d been convicted of something. I never wanted to be in a position where I was limited or trapped or dependent on someone else.

I started working when I was 14, helping my mom in an antique warehouse near where we lived in rural South Carolina. My mom would get her check, and then we’d bring home the money and pay the bills and I would see how little was left over after that. I realized that I needed my own job if I wanted my own money, because there wasn’t enough for me to have an allowance. I got my first “real” job at 16 at the Augusta National Golf Club, in their shop. It was long hours, but it was a nice check.

My mom never missed a bill, and she taught me about credit very early. I remember her saying, “Good credit is how you get a house and a car. It’s imperative that you pay everything on time.” To this day, her credit is almost perfect. She also taught me that bills have to come first. Whenever I got a paycheck, my mom made me subtract my bills first, and told me that the remainder was what I actually got paid.

I was the first person in my family to go to college, so I didn’t know anybody who could give me insight on financial aid. Our high school guidance counselor was pretty awful too, so I had to dig in and figure it out on my own. I was up late a lot of nights, Googling everything on the forms. I also talked to my friends’ older siblings who had experience with it. Getting all the paperwork together took me ages — I had to find my mom’s old tax documents in the garage and make sure everything was complete. I called the financial aid office so many times saying, “I really don’t know what I’m doing. Can you please help me?”

I ended up going to a private college in Georgia with 100 percent need-based financial aid. Without aid, the tuition would have been about $62,000 per year, but I stretched every last scholarship dollar I could get. The financial aid office also helped me find extra grants that I could qualify for. Finally they were like, “That’s it. You’re at the end of the line. There’s nothing more to save here; this is your aid package.” I ended up having to borrow about $10,000 total for tuition, in federal and private student loans, and I was determined to pay them off as quickly as I could. I was so paranoid about what would happen to me if I didn’t — like, if the deadline snuck up on me and I’d spent all my money already and didn’t have enough.

I had a lot of friends in college who didn’t seem to be in touch with the reality of what they were borrowing, or how they’d pay it back. One of my friends took out $40,000 a year and then, when we were juniors, decided that she was tired of her job so she took out even more. She was almost $200,000 in debt by the time she graduated — and she had her sights on graduate school next. She didn’t seem to think much of it. She was just like, “This is what people do.”

I had all sorts of jobs in college. I love kids, so I worked in day-care centers. I also did Spanish translation, worked in the school library, and helped some of my professors with their research. One summer I worked at a law firm, which was miserable but it paid well. Another summer I worked in a children’s hospital, which I really liked. Between all of those things, I could afford to pay off my student loans while I was still a student. I never thought I’d get rid of them completely before I graduated, but I always wanted to make a big dent.

I don’t think I missed out on that much by trying to save money. I’m introverted, so I wasn’t into going out to clubs and stuff. I was okay just staying in my room. Sometimes I’d be on Instagram and see all these girls from my class in Cancun, and I was like, “What? How do they have that much money saved up?” Then I found out that they were just putting everything on credit cards. I would so much rather have peace of mind and sit on the couch during spring break, knowing that I’m not going further into debt. 

Sure, there were times when I got jealous of people who didn’t have to worry about money at all. They were just walking around, all debt free, and I’d think, “Oh, you have no idea.” I had a roommate whose parents owned a yacht club, and she had no worries. I was like, “Mom, you won’t believe this. My roommate’s parents own a yacht club.” And my mom said, “But she doesn’t know how to manage herself like you do. You started from the bottom, and you’re way ahead of her.”

Keeping scholarships was hard, especially ones that had a B+ cutoff for GPA. It’s stressful to study for a test and know that if you don’t get a certain grade, you’ll lose $5,000 a semester. I actually did lose one scholarship and had to regain it. It was stress city. I had friends who took time off from school for mental health, which I respect, and I wish I could’ve done that a few times. But if I had, it would’ve messed up my scholarships. The consequences were just too heavy.

I knew I wanted to be a homeowner, but I didn’t think I’d be able to do it in college. I graduated a semester early, so my fiancé and I started looking for a place in Atlanta while we were both still in school. As soon as he started talking about us moving in together, I was like, “Okay, what’s your credit score?” If his score was shot, I know that certain things would be out of reach. I wanted to make sure that he had money saved too, which he did. It was important to me that we were on the same page, financially. I’m better at saving than he is, though. He falls for temptation more easily. He’s like, “Look what I found on Amazon! It’ll be here tomorrow.” I do treat myself every once and awhile, but to small things, like a milkshake or a new dress for $30.

We were about to rent an apartment when we found this program that would allow us to pay a really small down payment on a home because our credit scores were high — at the time, mine was 745 and his was 742. Around the same time, we saw a listing for this particular house, and the owner took a liking to us for some reason. Our credit was so good that she said we didn’t have to make a down payment at all. We were able to talk her down on the price, too. She had it listed for $130,000 and we got it for $90,000. In the end, getting a mortgage was cheaper than trying to rent — we pay $650 a month, and we wound up paying about $2,500 up front, for the attorney and closing costs. I had saved up about $3,000 at that point, and my fiancé and I split the expenses. Then we used the leftover money to buy a car for $1,900. The car is over 20 years old, but it gets us from A to B.

It was always a dream to have my own space. My mom helped flip properties sometimes when I was growing up and we would watch HGTV together and talk about how we wanted to decorate. After living in a dorm for almost four years, I wanted my own kitchen. I wanted to bake pies and have a garden and create a home. When my fiancé and I got the keys and walked into our house without the realtor with us for the first time, it felt unreal. Like, “We own all this?” I was super proud.

When we told people we bought a house, most of my friends were shocked. Some people were also a little bit bitter about it. It’s pretty unusual to have a house before you graduate, you know? My mom was surprised, too. She knew I’d been saving up, but she didn’t know how much. She was suspicious, like, “Where did you get that money?”

It really is true that having good credit makes it easier to buy almost anything. People trust you, and are often willing to lower a price because they know you’re good for it. I bet that between the house, the car, and the mortgage rate we got, having good credit has saved us about $50,000. Now my score is over 750, which was my goal. My fiancé’s is a little bit lower. We compete; he’s trying to catch up to me.

I started grad school for health-care management last month. It’s a two-year program and I took out a $10,000 loan for it. I think I’ll be able to pay it back quickly because my current job offers a loan-forgiveness program. I was saving up before I started, and I got scholarships, too. Also, now that I have my bachelor’s degree, I get paid more at work, so it’s even easier to put away extra money.


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