How I Wrote A Check For A $32,000 Student Loan
When I met my husband, I was a little over $32,000 in debt with student loans and I probably would have kept borrowing, had it not been for him. I learned to totally transform the way that I spent, through learning the methods of Financial Peace University, by Dave Ramsey(we are not afilliates, so this is not THAT type of post). Because of these methods, we were able to write a check for over $32,000, completely paying off my student loans, quickly. Oh, and the great part, we did not wipe out our savings to do so. With the cost of college so high these days, it is not unusual for graduates to still be hanging on to student debt 15 to 20 years after they complete their degree. However, this does not have to be the case. You can actually learn how to pay off a student loan in 5 years or less with a little planning.
1. Collect all the information on your debts and plug each loan into an amortization table using 5 years as a timeline. Add up the totals. This is the amount you need to pay each month.
2. If your current income and expenses do not allow for this type of payment, it is time to get creative. The first step is to find extra money. Chances are you are starting a new job so asking for a raise is probably not a good idea, but consider hanging on to your college job. These type of jobs are usually flexible and don’t require a lot of brain power. Even working an extra few hours a week can help. If that is not an option, look for this type of job.
3. Also, don’t forget about found money. Whether it is a birthday check from grandma or spare change, make it a point to put at least half of this money into paying off your loans. It may only be a few dollars, but over 5 years it adds up.
4. Unless you want to give up all your free time, earning more is probably not going to be enough. You have to spend less money. Yes you are now a grown up, but consider living like a college student for a little longer. This doesn’t mean ramen noodles and no fun, but consider getting a few roommates. Also, stick with the hand me down furniture, milk crates and mismatched silverware. In addition, keep the old car or better yet take the bus, walk or use your bike.
5. Bring your lunch to work and shop at consignment stores. You don’t need to live like a hermit or be anti-social, just be choosy about the invitations you accept. Go out to lunch with coworkers once a week, rather than every day. Stick to water, instead of the sodas and tea; your wallet and your waistline will thank you.
6. Find things you can sell and get cash for. Many times, there are extra hints of value that can be sold and really help put a dent in your loans. On the plus side, it helps declutter and pay down your debt.
Finally, if the task seems daunting, start by paying extra on just one debt don’t abandon the goal all together. You can always add more as you get more comfortable. Also don’t neglect other savings such as a rainy day fund and retirement. They should always be saving goals.