Single mom goes from nearly $100,000 debt to savings
Free Press wire reports | 11/8/2018, 6 a.m.
When Takiia Anderson graduated from Boston College Law School in 1999, she was a single mom with a 2-year-old, nearly $100,000 in student loans and a new job as a government attorney that paid $34,102 a year.
She didn’t like that math.
“People are talking about 20 years to pay off a student loan, and my daughter is going to college in 16 years,” recalled Ms. Anderson, now 47 and based in Atlanta. “I didn’t want to be in a situation where I’m helping her pay for college while I’m still paying my student loan.”
Today, Ms. Anderson’s student debt is long gone. She has nearly $500,000 in retirement savings, and her daughter, Taje Perkins, finished her third year at Spelman College in Atlanta with no student loans to cover its nearly $30,000 per year in tuition and fees.
How did she do it?
She set a series of targets and kept a laser-like focus on them that, even though she later became a high-earner and has ridden a surging stock market, can serve as a lesson to others today.
“Any time I got a raise, a bonus or a tax refund, I put it toward my debt, my daughter’s education savings and then retirement,” Ms. Anderson said.
Many financial advisers would advise flipping those last two priorities: “The same way that airplane announcements tell us parents should put on their own oxygen masks before assisting their children, parents should prioritize saving for retirement and putting themselves in a good financial position before saving for their children’s education,” said Paul R. Ruedi, CEO of Ruedi Wealth Management in Plano, Texas.
Yet more parents like Anderson are prioritizing saving for college over retirement — 56 percent are doing the former versus 54 percent the latter, according to a recent survey by Sallie Mae, one of the nation’s largest student loan lenders.
“Although college wasn’t as expensive when I went in 1989, I know what it’s like not to have to pay those bills, and that’s what I wanted for her,” said Ms. Anderson, a Howard University graduate.
Ms. Anderson attacked her student loan debt first with single-minded determination.
“We didn’t have cable. No internet,” she recalled, adding that, instead, they watched old or borrowed DVDs and VHS tapes. “I was literally living in overdraft protection. But I was paying my bills on time. I drove the same car for 12 years, cooked at home and packed lunches.”
As her salary increased and she was promoted to roles with the U.S. Department of Labor in Maryland, Philadelphia and Atlanta, she pumped more cash toward her debt.
“Even when I was making low six figures, I was renting $1,200 apartments — a lot of money for some people, but much less than I could afford,” she said.
In the end, Ms. Anderson was able to pay off her $100,000 in debt in nine years rather than 20.
Ms. Anderson began saving for her daughter’s education when Taje was 3. She started small. Following advice she heard on “Oprah,” Ms. Anderson paid for daily expenses in cash and at the end of each day threw change in a drawer. After one year, she had $135 that she used to open a savings account for Taje. She later rolled that into a 529 college savings plan and began contributing $50 a month.