Ask Kate: Should I Pay Off My Student Loans Before Traveling?

This week’s Ask Kate question is actually the same question from three different readers — because I see it all the time. If you want to travel long-term but are carrying student loans, this question is for you.

Reader #1: I am seriously considering quitting my job to travel. My problem is….I have roughly $20,000 in debt due to college. Any suggestions as to how to manage this if I have no income coming in? I originally gave myself a goal of paying it off first (in 3 years) but I will not last 3 more years in my current job. I am not even sure about 3 more days.

Reader #2: My actual problem is this – I know I want to travel but where do I start? I also have $15,000 student loans to pay. My plan would be to pay them off at once and simultaneously save for a trip -is this viable?

Reader #3: What should I do? How can I break in to being a travel writer or find work abroad legally in say Spain or England or Australia? Or should I wait until I pay off my student loans (aka never do it)?

These three emails are from this week alone. That should tell you how often I hear this question.

First, know that I am not a finance expert or professional. I’m not going to give you the advice that you would get from most finance gurus (though after reading The Money Book for the Young Fabulous and Broke, I think Suze Orman would agree with me here!).

I’ve been chipping away at thousands of dollars worth of student loans for seven years and traveling the world for two and a half years while still making my monthly payment each month. I’ve found a way to make it work.

While debt is never a good thing to have, some kinds of debt are better than others. Credit card debt? Bad. High interest and it will wipe you out. Student loans or a mortgage? Not nearly as bad.

But even student loans have different tiers of debt here in the US. I have low-interest public loans and a $176 monthly payment. Some of my friends have hefty high-interest private loans, and they pay hundreds of dollars each month — often more than what they pay in rent!

I saved $13,000 in seven months. When I started saving, I had about $16,000 in loans remaining. Could I have used that money to pay off my student loans instead of saving it for travel? Absolutely.

But that would have left me $3,000 of debt remaining and zero savings. I saved that much money by taking on way too much freelance work, becoming a shut-in, and sleeping four hours a night during the week if I was lucky. I managed to do that for seven months, and the money poured in — but had I lived like that for any longer, I would have completely lost my mind.

Yes, you could save every penny and pay off your student loans as soon as humanly possible, saving yourself a lot of interest as a result. But does that mean you’ll be giving up bar nights with your coworkers, impromptu trips with your friends, fun new activities, living in a fun neighborhood, and all the things that make your twenties amazing?

You only get one chance to live your twenties. Believe me when I say that things change when you get in your mid-to-late twenties. People start getting engaged, getting married, having babies. Things change fast, and your circle of friends evolves to people who have more in common with you.

When I was 24, I would regularly go out until 4:00 AM and then go to work the next day. At 28, I can’t remember the last time I went to a club.

Carrying student debt isn’t the worst thing in the world. Even Barack and Michelle Obama didn’t pay off their own student loans until they were in their mid-forties — and that was only because his books became bestsellers.

Should you pay your student loans off in full? It comes down to evaluating the kind of life you want to have and how paying different amounts on your loans changes that. Maybe the ideal option for you is to pay off your loans quickly; maybe it’s to pay the minimum each month; maybe it’s somewhere in the middle. Only you can decide that.

So, you’re ready to travel? Read on.

My advice to everyone:

1) Pay off all high-interest debt before you start saving for travel. Pay off all your credit card debt; pay off or sell your car; pay off your crazy private student loans.

If that means you have to delay your trip by years, so be it. There is no easy solution when you’re buried under mounds of crippling debt.

2) If you have paid off your bad debt and have only low-interest debt remaining, save enough money to cover your monthly loan payments while away.

I worked my student loan payments into my budget — I made sure enough to add in my monthly loan payment for the seven months that I would be away.

3) However, if you are drowning in debt and will do anything to start traveling, there is another option for you: teaching English in Korea. Not Thailand. Not Japan. Not Spain. Korea.

While teaching English is generally a low-paying gig around the world, schools in Korea pay for your apartment as well as your flight — and the cost of living is low. While you won’t earn a stellar amount, you will have very low expenses. Some English teachers live very well in Korea while still saving $10,000 per year.

For more information, ESL Cafe is a great resource for teaching English all over the world, and Waegook Tom has taught English in Korea for three years.

Is teaching English the same as traveling at your own whim? Nope. But it’s a way to scratch your travel itch while responsibly paying down your debt.

Whatever you decide to do about your debt is completely up to you. I wish you all the best of luck.

Note (21 June 2015): Due to the amount of spam comments that this post receives, I’ve made the decision to close comments on this post.