Was his $120,000 college degree really a huge mistake?

Imagine graduating college already six figures in the hole.

That’s where Joe found himself at 22: about $120,000 in student loans, a starting salary around $65,000, and very little understanding of what he’d actually signed up for. Fast forward six years and he’s 28 with a positive net worth of about $70,000, a solid income, and a realistic path to financial independence.

Was his $120,000 degree a huge mistake? Maybe financially, yes. But his story is also a great example of how to recover from an expensive decision and still build a strong financial future.

Let’s walk through what he did, what he’d do differently, and what you can borrow for your own money plan.

The $120,000 decision: how he got here

Joe followed the script a lot of us were handed: go to a good school, get the degree, it will all work out.

He went to a private college in Boston for a graphic design degree and graduated with about $120,000 in student loans. No scholarships. No serious hunt for cheaper options. A little bit of loan money went toward living off campus for a year, but most of the cost was simply tuition and fees.

Starting salary out of school: about $65,000.

That’s a big mismatch: a six-figure degree with a middle five-figure starting income. On paper, that’s exactly how people end up feeling trapped by student loans for decades.

Looking back, Joe says he wouldn’t change his major or the experience itself—but he absolutely would change how he paid for it:

• He’d look harder for scholarships.

• He’d strip down lifestyle costs (cheaper housing, fewer extras).

• He’d be much more aware of the total price tag.

And that’s the first big lesson: the degree might be worth it to you, but how you pay for it matters just as much as where you go.

Step one: he didn’t rush out on his own

One of the smartest (and least glamorous) decisions Joe made was moving back home after graduation and staying there for years.

Did he want to? Not really.

Did it change his financial life? Absolutely.

By living with family, he avoided rent during those crucial early years when his income was still growing and his debt was at its highest. That gave him breathing room to:

• Start budgeting seriously

• Save a large portion of his income (around 40% at one point)

• Begin investing early, especially in a Roth IRA

• Make meaningful payments on his loans

If you’re graduating soon (or have a kid who is), this is worth sitting with. Living at home isn’t a failure; it can be a launch pad. If you can do it in a healthy way—clear expectations, some contribution to the household, and a real plan—it can shave years off your financial timeline.

How he attacked his money: budget first, then goals

Joe didn’t start with a perfect plan. He started with a simple one: decide what mattered most and work backward.

Here’s how he approached it:

1. He built his budget around his biggest goals

Instead of asking, “What can I spend?” he asked, “How much do I want to put toward my debt and investments?” Then he built the rest of his spending around that.

That meant:

• Choosing a target payment toward student loans

• Committing to maxing out his Roth IRA each year

• Letting everything else fit inside what was left

That’s a very different mindset than “I’ll save whatever’s left at the end of the month.” It’s also a big reason he made so much progress so quickly.

2. He embraced a high savings rate while he could

While living at home, Joe was saving close to 40% of his income. That’s huge.

He used that margin to:

• Max out his Roth IRA (tax-free growth forever is hard to beat)

• Build some savings

• Pay about $1,500 per month toward his student loans

That $1,500 wasn’t just covering interest. His loans were on a relatively short repayment schedule (likely around 10 years), so each payment chipped away at the principal too. Over several years, his total student loan balance dropped from $120,000 to about $76,000.

Is that still a lot? Yes. But that’s a $44,000 swing in the right direction—while also building assets on the side.

What he did "wrong" with his student loans (and why it still worked)

Joe admits he didn’t manage his student loans strategically at first. Once they were set up, he basically left them alone:

• He didn’t fully understand the interest rates on each loan.

• He didn’t prioritize the highest-rate loans.

• He mostly stuck with the standard payments and didn’t restructure anything.

From a pure math standpoint, that’s not ideal—especially when some of his loans are in the 6–7% range (which I’d absolutely treat as high-priority debt in your 20s).

But here’s what he did right without realizing it:

• He was actually paying a lot each month (around $1,500 total).

• He didn’t fall into the trap of interest-only or extended 20–30 year repayment.

• He didn’t let the loans go into default or ignore them completely.

Could he have saved more interest by using the avalanche method (knocking out the highest-rate loans first)? Yes. But consistent, decent-sized payments plus a high savings rate still moved him forward in a big way.

The fun stuff: shoes, gold, and crypto

This is where Joe’s story looks like a lot of real people’s finances: a mix of good decisions, emotional decisions, and “well, I like it” decisions.

The $4,000 sneaker collection

Joe has been collecting sneakers since high school—mostly 1990s Jordan retros, some never worn, with original boxes. The collection is worth around $4,000.

Is this a solid financial investment? Not really. He’s not actively flipping shoes for profit. It’s more like a hobby asset: something he enjoys, that could be sold if needed, but isn’t part of a serious investing plan.

There’s nothing wrong with that as long as:

• Your core financial bases are covered (emergency fund, debt plan, retirement savings).

• The hobby spending fits in your budget.

• You’re honest with yourself: it’s for joy, not for guaranteed profit.

The $10,000 in gold

On his net worth statement, Joe listed about $10,000 in gold—but it’s not something he bought as an investment. It’s family jewelry that’s been passed down.

That’s more of an inheritance/family asset than a financial strategy. It’s okay to count it in your net worth, but I wouldn’t build a plan around it unless you truly intend to sell it someday.

The crypto "hedge"

Joe also owns some Bitcoin through a regular exchange account. He sees it as a small hedge in case the way we use money changes in the future. He’s not trading, just holding.

My take: in his situation, this is speculation, not a core part of his financial foundation. When you’re still paying off high-interest debt and don’t have all your retirement buckets humming yet, crypto should be at the very top tip of the pyramid, if it’s there at all.

If you want a tiny slice of speculative assets for curiosity or fun, fine—but do it after you’ve nailed the basics. Your future self will thank you.

His current reality: moving out and shrinking his savings rate

After years of living at home, Joe is finally moving into his own place with a roommate. That’s a big life step—and a big budget shift.

Here’s roughly where he stands now:

• W-2 income: around $97,000–$100,000

• Side hustle income (graphic design work): about $10,000 a year, sometimes more

• Take-home pay from his main job: about $5,600 per month (after taxes, health insurance, HSA)

• New monthly expenses (including rent and loan payments): about $4,800

That leaves roughly $800 of monthly margin from his main job, plus whatever comes in from side work.

His savings rate will drop from around 40% while living at home to roughly 11% once rent kicks in. That feels discouraging to him—and honestly, that’s a normal feeling when your fixed costs jump.

But this is where strategy matters.

Using his side hustle as a secret weapon

Joe’s side work—logos, branding, design—isn’t just extra spending money. It’s the key to keeping his progress going even with higher living costs.

One smart idea for him (and for you, if you have irregular income) is to treat side hustle money as dedicated “goal fuel.” In other words:

• Build your basic budget only on your main, reliable income.

• Use side hustle income 100% for specific goals like:

  • Extra student loan payments

  • Maxing out a Roth IRA

  • Boosting an emergency fund

For Joe, making $10,000 a year from side work isn’t unrealistic. If he can consistently earn and direct that toward debt or savings, it dramatically speeds up his timeline.

Debt payoff strategy: should he go all-in?

Right now, Joe still has about $76,000 in student loans across several different types:

• Parent PLUS loans (some over 6%)

• Private student loans

• Direct subsidized and unsubsidized federal loans

Some of those interest rates are high enough that I’d treat them as priority debt in your 20s—especially anything over ~6% and his largest loan at 5.5%.

He has two main options:

Option 1: balanced approach (debt + investing)

In this path, he would:

• Keep maxing out his Roth IRA each year.

• Continue HSA contributions and invest anything above his deductible.

• Use his $800 monthly margin plus side hustle income to pay extra on the highest-interest loans using the avalanche method.

With this approach, he’d likely have all his loans gone in about three years while still building retirement assets along the way.

Option 2: full-on debt crusade

Here, he’d pause Roth contributions for a short window and throw every spare dollar—his $800 margin plus side hustle income—at the loans.

Using around $3,000 per month toward debt (regular payments plus extra), he could potentially wipe out all of his student loans in about 27 months.

That’s just a little over two years.

He’d sacrifice one or two years of Roth contributions, but he’d enter his early 30s completely free of student loans with a good income and a clean slate. For some people, that psychological win is absolutely worth it.

There’s no one right answer here. This is where “personal finance is personal” really shows up. If the debt is mentally exhausting you, it can be worth going harder for a shorter period. If you’re more motivated by seeing investments grow, a balanced approach might fit you better.

His long-term vision: coast FI by his 40s or 50s

Joe isn’t trying to retire at 35 and move to a beach. He actually likes his work. His dream is more about freedom and flexibility: reach a point in his 40s or 50s where he doesn’t have to aggressively save anymore because his earlier efforts are doing the heavy lifting.

That’s essentially the idea behind Coast FI (coast financial independence):

• You save and invest aggressively in your 20s and 30s.

• By your 40s or 50s, you’ve built a big enough portfolio that, if left alone to grow, it can fund retirement at a traditional age—even if you stop contributing.

Let’s translate his numbers into something concrete:

• He already has around $100,000 in assets at 28.

• If he pays off his debt by his early 30s and then saves about 25% of his income (around $2,200/month) into investments from age 31 to 50, he could reach around $2 million by 50 (assuming a reasonable long-term return).

• If he then stopped saving entirely at 50 and just let that $2 million grow until 65, it could potentially grow to somewhere near $8 million without another dime contributed.

That’s the power of compounding plus a strong savings rate early in life. It’s also why delaying gratification for a decade or so can completely change what your 50s and 60s look like. If you like this kind of long-game thinking, you might also enjoy my story about delaying big lifestyle upgrades for over a decade in what financial freedom actually looks like after years of sacrifice.

How to know if you’re "allowed" to upgrade your lifestyle

One of Joe’s biggest questions was one I hear all the time: how do you know when you’re actually making progress versus just lifestyle inflating?

My favorite simple rule in your 20s and 30s: focus on your savings rate.

If you’re consistently saving at least 20–25% of your gross income toward long-term goals (retirement, investing, debt payoff that will free up future cash flow), you can usually loosen up a bit on lifestyle without guilt.

That means:

• If you’re hitting your savings targets, go ahead and move to the nicer apartment, upgrade your car within reason, or take the trip.

• If you’re not hitting your savings targets, lifestyle upgrades are probably coming too early.

Tools that estimate whether you’re ahead, behind, or on track for retirement can help here too. When you can see that your current savings rate gets you where you want to go, it becomes much easier to enjoy the money you spend today without second-guessing every decision.

And if you want to see how early saving for future goals can give you more options later (especially around college planning for kids), the strategy behind using 529 plans as a backdoor Roth IRA is another interesting example of long-term thinking paying off.

What you can steal from Joe’s story

Joe’s path isn’t perfect. None of ours are. But there are some really practical takeaways you can use:

• Before college: Don’t just ask “Where do I want to go?” Ask “What will this actually cost, and what will my likely starting salary be?” Community college, scholarships, and cheaper schools are not failures—they’re smart financial tools.

• Right after graduation: If living at home is an option and your family relationship can handle it, consider it a financial accelerator, not a step backwards.

• Budget around your goals, not your whims: Decide how much you want to put toward debt and savings first. Let everything else fit inside that.

• Use side income intentionally: Treat side hustle money as dedicated fuel for big goals, not just extra spending cash.

• Know your interest rates: List every loan, balance, and rate. Use the avalanche method to attack the highest-rate debts first.

• Let hobbies be hobbies: It’s okay to have a sneaker collection or something similar. Just don’t pretend it’s a retirement plan.

• Think long game: A decade of aggressive saving in your 20s and 30s can buy you decades of flexibility later.

Was his $120,000 degree a mistake? Financially, it was definitely expensive. But the bigger story is this: even if you start deep in the red, you’re not stuck there forever.

With a high savings rate, a clear plan, and a willingness to trade some comfort now for freedom later, you can dig out, build wealth, and give your future self options you can’t even see yet.