Happy Thursday friends! I hope everyone is having a great week.
I’ll get straight to the point today – I wanted to do a post about debt. Drew + I just paid off my student loans from my nursing degree on Monday. We started repayment 2 years ago, and now the $34,000+ has been paid in full 🙂
It felt SO good! We celebrated by dancing around the kitchen! Today, I’m writing and Drew is editing/contributing to a blog to tell you how we did it. We were both a little hesitant because we didn’t want the message to come across as boastful. However, we’re aware that so many of us struggle with money and debt management that this post could help others benefit from our experience.
Our church did a sermon about finances last year. One thing I took away from it was that part of the reason people get into such trouble with their finances is because they keep this topic stashed away in privacy. It is valuable to have mentors, friends, or family that you can talk to about big financial decisions or your current financial situation. This can be a helpful strategy to hold yourself accountable.
If you are new to the blog and interested in this topic, Drew + I did another blog called Financial Health that also talked about our personal financial strategies. I was very candid in that one about how I’m a reformed spender, so if you currently aren’t great with money…you can improve. Financial health is a huge part of health because if you aren’t financially healthy, you are adding a ton of stress to your daily life.
Here is how we paid off our loans:
- Made a goal: We have specific and time oriented goals to pay off both our short and long term debt (yes, even the date we want to pay off our house). Our goal for the student loans was August 2016. Of course when we started, this seemed like a long way away. Goals will help you to prioritize and make a plan to know how you are going to pay off debt.
- Paid the highest interest loans first. This seems like common sense, but you should take a close look at how much interest you are paying on each loan. Initially, the interest rates on our loans were anywhere from 3.15% to 11%. We paid more than the minimum payment each month, and then each quarter we picked the loan that had the highest interest and paid a larger sum of money toward it. A lot of times this meant each quarter we would pay back a loan in full. The small victories of paying off a whole loan kept us focused and driven to get them all taken care of. 🙂
- We had no credit card debt: Credit cards have the highest interest rates and the average American household has $15,355 of this type of debt. This is the first debt that needs to go, even before your start focusing on your student loans. During our financial church sermon they played a funny SNL skit, watch is here: http://www.nbc.com/saturday-night-live/video/dont-buy-stuff/n12020. Don’t buy stuff you cannot afford. SAVE for something you want to buy. It isn’t cute to just “charge it”. Drew + I pay our credit card balances off in full every month (no exceptions!). I added this point in here because I know a lot of people are walking around with credit card debt that should be focused on, paid off, and then not re-accumulated.
- We were on the same page: If you are in a long-term relationship, it is important to be on the same financial page. This is one way to avoid added stress and disagreements. As we talked about in a previous blog called Financial Health, we meet once a month to talk about finances. We sit down, pay all of our bills together, and talk about where our account balances are and how we are doing on our goals. This makes us accountable to each other and we both have a vision of what we need to do the next month. We’ve made this into a non-negotiable part of our lives and actually look forward to it. We also share all of our accounts, which for us represents that we are a team. Drew did a tremendous job of always reminding me that the student loans were ours when I felt burdened by them. Thanks babe 😉
- Be smart with bonuses /(since it’s the season) tax refunds/other incomes: I’ll be honest here, when I lived in Chicago and received a tax return I thought of it as “fun money”. For some reason, I didn’t feel as bad blowing through $1,000 if it came in the form of a refund or bonus. I also used to do this with any money I made through AdvoCare because it was on the side of my main income. It was something extra I was doing, so why shouldn’t I get to spend it? In my older, wiser years I’ve realized that is not a successful financial strategy. Money is money my friends, so you shouldn’t treat it differently just because it comes “easier” than the income from you regular J-O-B.
I hope that at least one or two of these tips helps you! I’m always talking to my sweet, younger nursing friends about their finances because it is one of many topics that comes up in the middle of the night, and I want them to do better than I did. 🙂 It feels so great to be done paying these student loans, and now we can focus in on the next goals. It is also important to say that we accomplished this without feeling deprived of life and have definitely enjoyed the fruits of our labor along the way.
See you next week! Have a safe + balanced weekend! Love, Ames (+Drew)