Dr. Samantha Tillapaugh was born in the Philippines but moved to the United States when she was 8. As immigrants, Tillapaugh’s Filipino parents stressed the importance of higher education and going into a respectable profession.
“A lot of this need to have a good career comes from the idea of the American Dream,” explains Tillapaugh. “People who move to the United States are kind of fed this idea of work hard, aim for a really good profession, and then you can have it all.”
With the desire for a secure future hovering on the periphery of her mind, Tillapaugh settled on a dentistry career in her early teens. But she was unaware of the financial implications associated with her decision. Tillapaugh applied for undergraduate scholarships but didn’t receive any due to her parents’ higher tax bracket status. And as a permanent resident, she realized she was ineligible for a good chunk of the financial aid available.
Tillapaugh turned down admission to a more prestigious school to save money. She remained close to home and commuted, receiving her bachelor’s degree in three years rather than the customary four. She applied for U.S. citizenship before dentistry school, the first in her family to do so, but was still unsuccessful in sourcing funding. However, even with these cost-saving measures and three part-time jobs, Tillapaugh owed $575,000 by the time she completed her education.
“I graduated in June 2016 at 26, completely shocked at how much debt I owe and thinking how difficult it is to pay that back,” she admits. “A lot of my family believe that is kind of a natural part of life because that’s how they were able to come to the United States and build a life for themselves here. To them, it was no big deal, which I couldn’t fathom.”
Tillapaugh remembers feeling intense “anxiety and fear” about the debt after meeting with the school’s financial aid office about debt repayment options. The suggested 25-year plan seemed excessive, so she decided to seek a second opinion when she started work in September 2016.
“The first paycheck I ever got working as a dentist, I paid for a financial planner, who I trusted, and he was the one who made me realize that I could pay it back quicker.”
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Start with a small victory
Notching a small victory when paying off debt can be a major motivator toward achieving financial freedom. To help Tillapaugh gain some momentum, her planner suggested first paying off her $10,000 credit card debt.
“We chose that because the interest rate was so high, and it was kind of an easy win for me,” she says. “And it was a way for me to prove to my financial planner that I had the motivation to be able to pay back debt in a strategic way.”
Create a budget
You Need a Budget is a popular personal budgeting program based on the envelope method of categorizing your cash for specific purposes to control spending. It was a tool suggested by Tillapaugh’s planner and one that she quickly grew to love.
“I like that it automatically brought in the transactions from our bank accounts into the app,” says Tillapaugh. “And then I like how the categorization is just very simple. It recalls how certain things are categorized so that the next month, it's just auto-categorized for you. The template is very simple so it just worked, and we just stuck with it.”
Consider getting a roommate
A few months after her dental school graduation, Tillapaugh and her boyfriend got married. They moved into a two-bedroom, two-bathroom loft. The couple lives in Southern California, an area known for high rental rates. A roommate would significantly reduce that cost.
“We were renting it at $2,800. And then, we talked to our landlord, who agreed to lower it to $2,600. When we got a roommate, she paid $700. So then we were able to lower our monthly rent to $1,900, which is pretty decent.”
The home’s three-story layout, with bedrooms on separate floors, offered the tenant privacy and made the arrangement comfortable.
Reevaluate your expenses
One of the simplest ways to save some money is eliminating unnecessary expenses. Tillapaugh and her husband started living frugally by canceling subscriptions to streaming services, making their meals rather than eating out, and avoiding outings like movie theaters. Instead, they increased their outdoor activities and found free things to do around the city. They did make one concession to avoid being overly restrictive.
“Every month, we each get a fun money envelope or bucket where we put a certain dollar amount into it, and the other person has no say about how the other person decides to spend that fun money,” she explains. “So by having that allowance from the get-go, I think we had enough grace to indulge ourselves as we pleased.”
Pick up one, or a few, side hustles
Tillapaugh worked multiple jobs during college, so she was no stranger to multitasking. To bring in extra income, she picked up a few side hustles. In addition to shifts at two different dental offices up to six days a week, her dog-sitting stint pulled in $2,000 a year. She also started wholesale directing, which entailed managing weekly coffee shop and restaurant orders for a bakery. That netted an extra $6,000 per year.
“I did take on an early morning baking job for a while,” she added. “I worked from 2 a.m. to 6 a.m., three days a week baking pastries and bread for a bakery.” After four months, she obtained a cottage bakery license and opened her own operation at home.
“I was baking bread in my kitchen and then delivering it to coffee shops and restaurants downtown.” This added an estimated $1,000 per month to her coffers.
Finally, Tillapaugh wanted to share her experiences and information about how hefty loans affect students post-graduation. With affiliate marketing, her blog earned $500 per month, including gifted products.
Leave room for flexibility
Homeownership was important to Tillapaugh’s husband. Since starting her loan repayment plan, the couple used the money saved from renting out their extra room to purchase a live-work loft, a housing unit that consists of both a residential and commercial space. When the market value increased during the pandemic, they sold it and spent the profit on a townhouse close to Tillapaugh’s job. She is now saving money on commuting.
“We’re not all or nothing,” she says. “We don’t put 100% towards paying back this debt because we believe that you can have other things that you value in life.”
The couple also took advantage of the pandemic-triggered paused loan payments and 0% interest rates for eligible federal student loans. Instead, they saved up as much as they could. As it stands, the debt is down from $575,000 to $420,000. According to Tillapaugh, when the savings are eventually applied to the loan, they will have a balance of $295,000—almost $300,000 down from when she first started repaying the loan in May 2017.
Despite the sacrifices, including distancing herself from relationships that were not supportive of her frugality, Tillapaugh is thankful for the lessons learned.
“I approach my debt with a lot more gratitude than people realize. It really has shaped who I am as a person and has given me a different perspective on how to approach life in a simpler and happier way.”
And she encourages others to be gentle with themselves on what can be an arduous journey.
“Sometimes you’ll slip. Sometimes you’ll spend money on something that you tell yourself you shouldn’t be spending money on. Sometimes you just get so tired that you need to take a break from work. That’s okay. Just try your best.”