After paying off our car loan and only $700 away from being credit card debt free, my next plan is to tackle my student loans. For some reason, paying off my student loans doesn’t give me that same “Yay I’m paying off debt!” feeling.
On March 9th, we will be completely debt-free except for student loans. We’ve come a long way in our journey to be debt free, and have paid off approximately $15,000 in credit card debt and car loans in the past two years.
But the student loans loom.
With $20,000 left to go, it’s no laughing matter. According to the student loan calculator, it could take up to 16 years to pay off my loans if I continue with just the minimum monthly payments. Sixteen years?!
I have three options to pay off my student loans:
1) I could go on my merry way and continue to pay the minimum balance every month, pay thousands in interest and not pay them off for another 16 years.
2) I could go hardcore and pay off my debt within the next two years, putting every penny I have toward debt, forgoing all discretionary spending to lower my debt, and essentially eliminate any social life for the sake of being debt free.
3) I could find a balance and transfer all the money I’ve been putting toward other debt and now designate it toward paying off my student loans within the next three to four years. This would allow us to almost triple the minimum monthly payment but also allow us to have a life as well and still splurge every now and then and enjoy the years we have to ourselves before we have children and they suck us dry of any fun money.
Hmm—the options are difficult, right?
It’s really hard to get the motivation to pay off student loans because it just feels like eternity. However, I don’t regret my education, which truly opened a lot of doors for this young Latina from the ghettos of Orange County—yes, even white-bred filthy-rich Orange County has ghettos.
When it comes to paying off student loans, you need a plan. And I think we’ve found our plan. We will become much more aggressive in paying off my loans, but we still plan on living our lives. Yes, sacrifices will be made, but it won’t be as bad as say…living in a shack for 1.3 years.
I can also see us needing to buy a car within the next few years, since who knows how much life is left in Eric’s car.
The whole point is paying off debt is a journey. It’s not something that happens overnight, unless you have a filthy rich relative who dies and leaves you an inheritance that makes Warren Buffett jealous. Paying off debt takes time.
I’m willing to make sacrifices to pay off my debts much faster (three to four years as opposed to 16 years), but I’m also not willing to give up things that are important to us, such as traveling, saving for a down payment on a home, and living in a place bigger than a shack.
You need a plan when it comes to paying off debt and student loans. This is our plan.
And considering we’ve paid off $15,000 in debt the past two years, which included living on one income for 5 months AND paying for Eric’s fire academy –heck, I think our plan is going pretty well.
Do you have student loans? How are you working to pay them off?
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