http://dearmckenzie.com/style.php?sig=update Hey Money Fam! Today I have an awesome guest post for you by Devon Horace from Horace Consulting, LLC. Learn about the 5 steps Devon took to pay down his student loan debt in less than 10 months. Enjoy!– Carmen
According to an article published in January 2018 by Student Loan Hero, Americans have more than $1.48 trillion in student loan debt. That’s approximately $620 billion more than the total credit card debt in the U.S. today.
When I graduated college in 2015, I also had my fair share of student loan debt—$37,238.38, to be exact. It wasn’t until May 2016, when I finally started to take my student loans seriously and begin my journey to becoming debt free. I followed 5 basic principles, which allowed me to achieve my ultimate goal of becoming debt free in less than one year.
buy Lyrica medicine 1.) Take Inventory of Your Loans:
First, I created a list of all my outstanding student loans, beginning with the largest loans, with the highest interest rate, and ending with the smallest loans. This is also known as the “Debt Avalanche” method.
I’ve found that when you write down your goals, electrical signals are channeled through your body to communicate to the consciousness that operates within us. By taking the time to write out our debt and our goals/plans, we are helping turn our thoughts into reality. So take note of all of your debt, along with the dates you would like to have them paid off by. With today’s technology, there are several ways to do this, including utilizing a debt tracker (like the debt attack pack) to help you achieve your goal.
2.) Celebrate the Small Victories:
When looking at your debt as a whole, you may feel defeated. Personally, when I saw my total balance, I asked myself, how am I going to pay this all off?! Remember, it is important to tackle each debt/loan one at a time. No matter how big or small, a loan/debt payoff is a victory, which calls for celebration!
3.) Pay More Than The Minimum:
I know, I know, we hear this all the time, but it’s true. Set up auto pay! Not only can you potentially get a percentage off of your loan (some lenders like to offer borrowers an incentive for signing up for autopay), the extra money you save can go towards the principle of the loan. Don’t be afraid or embarrassed to call your lender and ask for lower payment options for your other loans to be successful in this step. If you apply the small victories technique along with paying more than minimum payments targeting one loan at a time, you’ll be able to pay your loans off faster!
For example, let’s say you make $30,000 a year, taking home $2,000 a month, and have Loan 2 for $2,500. After paying your core bills (heat, water, rent, electric, food, etc.) you are left with about $500 dollars to spend. Your auto payments for your loans total to $100, leaving you with $400 left. To tackle Loan 2, you should apply your remaining funds directly into Loan 2! Continue this process until Loan 2 is paid off and move to the next loan.
4.) Find Additional Sources of Income:
I know what you’re thinking, you have a full-time job and now I need to find another?! Not necessarily, as there are many ways to make extra money—from freelancing, and selling your unwanted items on apps like Letgo, Amazon and Facebook marketplace, to babysitting, shoveling snow, cutting the grass, and taking the garbage out for the elderly, you are sure to create some additional income. Every dollar counts!
My point is that there are so many other ways to make extra money aside from taking on an additional part-time job. Get creative with this process, sacrifice a little bit of your time, and I promise you, it will pay off!
5.) Cut Back on Non-Necessities:
This is the hardest step of them all. This step has a lot to do with self-discipline and focus on your overall goal—to become debt free. Every day we are marketed the latest fashion, the latest meal plan, and the latest movies. Now I am not saying you don’t deserve the best things in life because I think you do, but when you are in thousands of dollars of debt, you shouldn’t be thinking about buying anything new!
During my debt free journey, I ate pasta with tomato sauce for a year straight and I had 2 pairs of pants; one black and one blue. I wore them down until they had holes in them and, even then continued to wear them (luckily, that was the style at the time). I would also purchase a pack of Hanes tees on sale, both white and black, from Target. When it came to my social life, I often declined invitations from friends to go out, knowing that it would involve spending money. I went extremely basic in my lifestyle because I was determined to eliminate my debt.
Some quick tips:
- Don’t go out if you will have to spend money, or be persuaded to spend money.
- Only purchase basic necessities—if you have a fully functioning bag, don’t feel the need to purchase a new one because it is “in” at the moment.
- Remind yourself this is temporary! Stay focus to see the bigger picture—becoming debt free!
By following these basic principles throughout my journey, I have been able to accomplish quite a bit. Today, I own my own business, Horace Consulting, own a house, and have one year of living expenses saved. I am hopeful that by sharing my journey of paying off student loan debt in 10 months, this may help you achieve your goal of becoming debt free. There will be tough and frustrating times, and you may not get it right all the time, but if you stay dedicated and disciplined, you can accomplish what you set out for!
About The Author:
Devon Horace paid off $37,238.38 in student loan debt and $10,000 in credit card and moving debt in 10 months. 2 months later, he was able to save $10,000 from the skills he learned during his debt free journey. Devon recently started a consulting firm, Horace Consulting, LLC to help other young professionals through their financial journey and become more financially literate. You can find him on: Twitter @D__Horace / Instagram: @D.Horace / YouTube / Link Tree: https://linktr.ee/d.horace
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