I was having a conversation with one of my accounting friends and we were chatting about finances post-graduation. We were both grateful enough to have been on scholarship and didn’t have to worry much about who was paying for school. Well I did, but that’s another story. Even though I received a scholarship, I still took out loans to cover some of the differences. I, like many millions of students across the world owe the banks some moolah.
So back to the conversation, my friend is big on being frugal and “conserving” is money, he lives on about $400/month and that includes his bills and necessities. Pretty great concept if you ask me! So I told him I wanted to pay off my student loans in the next 3 years. This has to happen by the way. I’m blogging about it, so it’s definitely going to happen.
Anyhow, he informed me of a new form of slavery called debt peonage. Basically you are enslaved to creditors until you pay off your debts. Some people think that they will never pay it off. But I definitely know it can happen.
He encouraged me to pay off my loans ASAP. He says it is vital to your life when you’re thinking of purchasing a home, car or even marriage. I definitely don’t want to marry anyone with terrible credit and neither should my partner.
A friend of mine (via social media) Natalie McNeal got a hold of her debt issues and paid off her debt in a couple of years. She is known as the Frugalista. She highlights various frugal activities and items on her website http://www.thefrugalista.com/ . She’s pretty great at answering questions about frugality life or just life in general! I would strongly suggest reading her book, The Frugalista Files. She breaks it down for those of us who have a bit of a shopping habit and/or need to pay back loans.
Follow her: @frugalista
Find her on Facebook:Frugalista on FaceBook
So you’re asking what I plan to do about my loans? Pay them off. I am more than likely going to consolidate the largest loan and pay it off over time. (3 years) I am not the accounting/finance person so I still have a lot of questions and gray areas about my next move on my loans. But what I will do is get my financial life in order.
First, I want to continue to live within my means. I have kind of gotten the hang of this my last few years of college. I used to work, but couldn’t save enough to save my life. Now I pay myself first. I take about 10% of my monthly checks and put them into a long-term and short-term savings account. The long-term account: I don’t plan on touching for the next 5 years. Short-term? Eh, I need to get better at not touching it.
Second, I need to budget better! I need to BUDGET! I will be starting my new job in a few weeks and I am very thankful. But I want to make sure I am financially prepared. I bought a budget workbook that I will USE once I get the details squared away.
Lastly, I am going to refresh my life plan. I want to buy a house, car and go on a few trips in the next few years. I need to make sure I’m prepared for all of these investments.
1. Live within your means. You don’t always need the newest pair of jeans, skirts or shoes. Look in your closet to revamp your style. Try Goodwill for discounted clothes. Make sure to go during sale days: college student and/or military discount days
2. Don’t incur more debt. Those credit cards in your wallet should be for emergencies. Contact your bank for financial advice.
3. BUDGET, BUDGET, BUDGET! Figure out a plan and execute.
4. Pick up a hobby. I read a lot and blog. It eats up time so I am not out at Target, the mall, or online shopping spending money.
5. Find friends who are trying to save like you. Maybe encourage your friends to start saving. I keep hearing it’s better to start now rather than later.
6. Try Natalie’s No Buy Month. Plan a month where you only buy gas, groceries, and necessities. This means no eating out, no movies, and no sudden mall splurge.
New Information about Loans!
If you have federal loans I would encourage you to see if you are eligible to apply for the Special Direct Loan Consolidation Program. Now through June 30, this program is open to eligible students. In a nutshell, the program consolidates your existing loans to a lower fixed rate! This is amazing. Read more information here:
See if you’re eligible here. You need to sign in with your social security number, birthday and FAFSA pin. Once logged in, you will see if there is an alert. This is on the right side of the screen. It will say if you are eligible or not.
Let me know if you have any questions and/or concerns.
Please share with your friends and family!
Let’s be on the road to debt-freedom NOW .