Praise the Lord! I have made it to my one year anniversary of being a full time employee and I could not be more proud of this accomplishment- this calls for a celebratory blog post! Not only am I proud of that accomplishment, but Ethan and I have managed to chip away more than half of my student loan debt. Beat that, 2nd leading form of debt in the USA!
Here is the background. Two years ago I was brave enough to sign into my student loan account to see how much I owe. After seeing it, I was scarred. The crippling amount of money I owed would not leave my mind. But that was what I was suppose to do, right? Go to school, put myself in debt, struggle to find a job in a market that is completely saturated, live off credit cards, and try to make my life look as pretty as possible while drowning. Ah, that's the American Dream!
If you too are in a situation similar to mine (which 70% of undergraduates are), here are some points that helped me make the decisions I made within the past year.
You cannot declare bankruptcy on student loans! You are literally stuck with it and it will not go away if you say "I have no money." If something happens to you, your next of kin will be responsible for it. I know this point feels hopeless, but that's why it's my first point! Let's keep going...
Making payments bi-weekly, rather than monthly, can significantly save you money in the long run BIG TIME!! Paying your loans when you get your pay check every other week keeps up with that interest that accrues daily. Yes, student loan interest accrues EVERY DAY! This can literally save you thousands of dollars during the duration of your loan. When I say bi-weekly, I mean splitting your monthly bill in half and paying one half of it every other week- Not doubling up the amount you owe (well, unless you can).
Put any extra income towards your payments. Hey, some months I'm feeling a little ambitious and I'll put a little more towards it than what I normally do. I know that that extra money will make a difference. Besides, that extra money would have either been saved or spent on something I didn't need. Unless I find a saving account that has a higher interest rate than my student loans, it's best to just put it to the loans.
Start with loans that have a higher interest rate. Or maybe just look into consolidation. Personally, I like having all my loans separated because I feel accomplished when one is paid off, but some people can get big savings from consolidation! It's worth looking into. It just wasn't best for us.
Another plan of action is that you could pay off the loans with the larger amounts first or you could pay smaller loans first. I have been paying smaller loans first (because mine have the higher interest rates) but it has been so rewarding to see those loans quickly go away.
All these are things that I have learned and I know someone out there needs this help. The world tells us to be quiet about our money and finances and that we should be ashamed of our debt. Let's stand up and do something about this. Let's talk about it. Let's help each other. Let's lead each other to truth. And let's tackle this mountain that started as a molehill.
Two years ago, I had a dream of who I wanted to be and what I wanted to do with my life. Now, tackling my debt at a young age will open more doors for me in the future than I could have ever imagined two years ago and there is SO MUCH FREEDOM IN THAT! More than anything, I want you to feel that freedom too.