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Debt

5 Tips to Avoid Burning out While Paying off Debt

5 Tips to Avoid Burning out While Paying off Debt

This post may contain affiliate links. Check out my Disclosure Policy for more information.

Being on a debt free journey is hard. It’s hard to change habits, it’s hard to say no, and it’s hard to see how much money you are throwing away in interest. That last one kills me every month, literally makes me want to throw in the towel and be done with all this nonsense.

I’m being dramatic, but you get my point. It’s hard. There is nothing easy about this journey and burning out from it is very real.

Whether your journey is less than a year, or is going to be more than 5 years, it’s important to recognize how you are doing throughout the journey. Check in and make adjustments if you feel like you’re slipping into burning out. Throughout the last 3 years of my journey to pay off $200k in student loans, I have come to, or close to, this feeling a lot.

But, there are ways to avoid it, and handle it when it actually happens. These are the tips I have learned through my journey so far:

1. You can do anything for a short time, but not for a long time.

You need to determine your debt free date before you do anything else. If your date free date is 6 months to a year away, I say go absolutely gazelle intense until your debt is gone. The sacrifices you make for that year will be totally worth it to be debt free in a year or less. Do everything in your power to get them gone, so you can live your life on your terms. However, if your journey is going to be longer than that, I would highly suggest not going crazy gazelle.

I’m not saying don’t pay off your debt, I’m saying that you need to plan your budget a little differently. For example, I sat down with my budget when I started this journey and decided what I valued and what I didn’t value. Things that I value that stayed were saving and investing money for my future (I cut down this category, but it stayed), my health, and spending time with friends and family. This means that I have a higher grocery budget and I keep fun money in my budget to go to happy hour and dinner with friend and family.

My journey was planned to be 8 years and I was definitely not giving those things up for 8 years. I would go absolutely insane and definitely risk burning out. Of course, you’re going to have to spend money on things you don’t value, but you can find creative ways to make them more affordable. For example, I moved back in with my parents to save money on rent.

2. Celebrate smaller milestones before burning out.

This is important, especially if you’re tackling a mountain of debt. If you wait until you have completely paid off you’re debt, you are going to burn out. If you don’t, you’re amazing and I give you major kudos because I could never do it. Figure out what you need to keep motivated and celebrate those wins. This might be celebrating every $10k paid off, or it might be celebrating every loan paid off.

For me I do a combination of both, it really depends on how big the loan I’m focusing on is. Now that I’m more than halfway paid off, my loans are rather larger. I celebrate percentage paid off and paying off individual loans. It’s important to note that I don’t go crazy with my celebrations. I treat myself to a meal out, or I get my nails done. Something small that I don’t normally put in the budget, but will when I know a celebration is looming.

3. Make your money go further.

Budgeting allows you to make your money go a lot further. What I mean by this is that you know exactly where your money is going. This allows you to stop your money from going to certain things. This goes back to number 1, cut out all the things you don’t value. Do you really need that subscription service, is there a cheaper alternative that provides the same service? When your money is going to so many different things it can seem like you have no money to go towards debt.

When I fist started cutting my expenses I was scared to change my lifestyle. When done properly, you probably will see that your money is going towards a lot of things that don’t bring much value to your life. Once your budget is more simplified and only the things you truly value, you will see that you have a lot more money to play with. By taking the time to simplify your budget and your expenses, you will avoid burning out in the future.

4. Recognize your accomplishments.

When paying off a lot of debt I definitely recommend focusing on what you have accomplished. Yes, it is important to know how much debt you have, but try not to focus on that. To avoid burning out, you need to focus on what you have done so far. There are many different ways to do this. I recommend using undebt.it to track your progress and to always know when your debt free date will be.

When you focus on what you have left, it can feel more overwhelming. By focusing on what you have done, it acknowledges what you have done and doesn’t make the rest of the journey seem so hard.

5. Don’t be afraid to stray from the plan.

When you’re on a long debt free journey, it’s important to listen to how you’re feeling. I wouldn’t recommend making rash decisions based on emotions, that’s just a recipe for disaster. What I do recommend is sometimes changing the plan based on how you’re feeling about your debt.

For example, I was so angry at my private student loans and how much money I was losing on interest that I ended up refinancing with Earnest to save me money. I only recommend this if you are doing it to save money in the long run, not to lower payments and cost you more long term. I am happy to help you through this process, if it’s something that intimidates you. I totally was before I learned about refinancing and making it work for you.

Another example is to change your debt payoff order based on how you’re feeling. I was struggling through one of my large loans and was getting pretty annoyed that I hadn’t paid anything off in awhile. So, I decided to switch my focus to a smaller one that I could pay off in a month. This gave me the quick motivation I needed and freed up some cash to go towards my snowball.

Remember: This is your journey, do what you need to do to keep going.

Make your journey your own and listen to your body and your thoughts. If you feel yourself getting worn down, do something to fix it. If you’re frustrated, find a quick win that will keep you going. I’m always here if you need help getting through this, I love helping people figure out their debt free journey 🙂

Debt

6 Strategies to Help with Anxiety While Paying Off Debt

6 Strategies to Help with Anxiety While Paying Off DebtSomething that I haven’t shared with you all is that I deal with anxiety pretty regularly. I have found ways to keep it under control, but there are times when it completely tears me down.

This happened to me last month. It was a tough time for me with changes at work, side jobs, everything seemed to be changing. And I wasn’t happy about a lot of the changes.

With a lot of change, comes a lot of over thinking for me. Do you my new co-workers think I can handle this job? Am I doing a good job in this new role? Am I doing everything right?

Making a huge life change, like getting your finances in order, is bound to cause some overwhelming feelings. I’ve been on this journey for almost 3 years and have been budgeting for 4 years. I still am facing anxiety over my finances.

It usually creeps up out of no where for me and leaves me with knots in my stomach, my thoughts going a million miles a minute, and usually is accompanied by nausea and not being able to sleep.

Luckily, I have found some strategies that have worked for me to handle anxiety when it gets to be too much.

1. Stop the anxiety before it really starts.

This can’t always be done, but when I have been able to get myself before I really nose dive, it is very helpful. If I notice myself over thinking about something or fixating about a situation, I will do my best to get my mind off of it.

Find things that are distracting to you. For me, it depends on the situation. Sometimes, I need to go do something active, sometimes I need to just zone out with a movie or TV show, sometimes I need a book to get lost in.

It’s always different for me and it usually depends on how far gone I’ve let myself go into overthinking. Sometimes this doesn’t work at all. This strategy has been less effective for me recently and I think it’s because I do a lot in my day to day to help with my mental health and my personal development.

In the long run, this is good, but when I find myself fixating on something, it usually takes much more to get me out of it now.

2. Invest your time into personal development.

This has been wonderful for me. I can’t speak highly enough about the importance of personal development and spending time to do it every single day. This could be through a book, audiobook, video, whatever interests you and you think you need to work on.

This has helped me so much in my day to day and I really don’t find myself with a lot of anxiety inducing thoughts anymore. It usually takes much more for me to get into the pits now, which is good overall.

I didn’t think I had the time in my day to devote to this, but I found that I could make my commute time more productive. Whenever I’m going to be in the car more than 15 minutes, I put on the audiobook that I’m listening to. This has helped me so much and almost always boosts my mood and gets me ready to tackle the day.

3. Prioritize your health every day.

I find that when I am regularly being active, getting a good amount of sleep, and eating healthy, I’m generally in a better head space and can handle the stress that gets thrown my way. When any of these things don’t happen, I find it harder to manage my emotions and stress on the daily basis.

By making it a regular priority, it helps in the long run to manage your anxiety, and it helps you save money on medical expenses. Win!

4. Complete a daily mental dump.

Every day I start off and end my day by completing a mental dump. What I mean by this is that I write down all the things that are bogging down on my thoughts. Usually they are things I need to do, those things are kept for me to cross off throughout the day or week. For things that I am overthinking about, which is pretty regular for me, I write those down and then throw them out.

It may sound corny, but getting all of my thoughts down on paper and doing something with it, really helps me manage it all.

5. Step away.

Something I really struggle with is knowing when to take a break. When my anxiety starts up I do one of two things, tackle everything head on, or completely shut down. When I can’t use the above strategies to manage it, I usually shut down. However, when I manage my anxiety on the day to day basis, I am usually able to be productive, especially if I first step away from the things that are triggering my anxiety.

It’s important to know when you need a break to reorganize your thoughts. A quick walk with nothing to interrupt me does wonders for my productive when I’m feeling my anxiety creeping in.

6. Avoid caffeine after a certain time.

This is one that I never thought about doing. I’m a teacher, I practically survive off of caffeine some days. But, the reality is that when I’m feeling anxious about things, I’m overthinking. Overthinking doesn’t just stop because I’m tired and sometimes it can be really hard to shut my mind off at night. During the week, when my anxiety is usually at the worst, I don’t drink caffeine after breakfast.

Of course, there are some days when I’ll have tea because I just can’t make it to my side jobs, but overall, I don’t drink it after breakfast. This means I’m typically completely exhausted by the time my head hits the pillow.

Paying off debt can be very overwhelming and if you’re someone that struggles with anxiety, it can seem impossible. I hope these strategies help you, like they have helped me over the years. Overall, these strategies have helped me so much in managing my anxiety on the daily basis. Of course, sometimes these strategies won’t work, I’ve been there. But, these strategies have helped me gain better control of my daily life. How have you managed your anxiety?

Debt

How to Deal with FOMO When You’re Swimming in Debt

How to Deal with FOMO When You’re Swimming in Debt

This is a guest post written by Kelsey Yeager, founder of On My Way to Happiness, check her out for tips on saving money, reaching FIRE, and paying off debt.

When I paid off $20,000 of student loans in 6 months, it took hard work. It’s not because I’m filthy rich and can easily throw around that kind of money. It was because I made paying off debt my #1 priority above all else.

The “easy” part was changing my own habits. Since I was motivated to pay off debt, I didn’t mind eating rice-based meals, meal prepping, or not buying new clothes for a little while.

The hardest part was changing my habits when they involved other people. I noticed in my budget that my largest expenses were things that involved other people – like when co-workers invited me to lunch, summer weekends with traveling with friends, or going to the bars every weekend.

It’s really challenging to learn how to say no to friends when they ask you to do expensive stuff, because of FOMO! I was worried my friends wouldn’t like me if I stopped spending money on stuff. I was worried they would stop inviting me out if I skipped a couple of times. And above all else, I was scared of missing out on super fun events.

But the truth was, I needed to be debt free. I couldn’t keep going out on a whim anytime anyone asked. It wasn’t sustainable to continue going out to eat for every single meal with my boyfriend. I kept telling myself that I needed to get out of debt, yet my actions kept continuing to be me spending all my money.

Here’s a couple of tips I learned along the way to deal with all the FOMO feels while swimming in debt:

1. Find a strong “why” and remind yourself of this often.

This is the #1 tool that helped me deal with FOMO and get out of debt faster. Remembering my “why” helped me realize what was important to me and what was less important to me, even when it was hard.

For me, my “why” was to chase the FIRE movement – (financial independence retire early). I realized there was nothing I wanted more than to be able to have so much money that I no longer need to work anymore. The idea of quitting my job in just 10 years rather than 40 is so ridiculously exciting to me I still feel the energy welling up inside the pit of my stomach from pure joy. To be able to accomplish this goal, I needed to save a LOT of money – and my net worth was currently in the negatives with all of the debt.

I used this goal to help me navigate my social life. I would compare everything to my goal. Would I rather go to the same old bar with overpriced cocktails again this weekend, or quit my job for good? Would I rather buy this cute jumpsuit I know I’ll wear once for Insta and never again or quit my job for good?

The answer for me was almost always: quit my job for good. That idea was too delicious for me to ever consider doing anything else.

Note that this doesn’t mean I never, ever went out with my friends. If a friend was visiting from out of town and wanted to get lunch, of course I would rather see them than save a few extra dollars. If I hadn’t been to the bars in awhile I would make an effort to go out and have fun. I still saw my friends and had a fun life – but I always compared it to my “why” to make sure it was worth it.

It’s easy to just go out on a whim every single time anyone ever asks, but if you have debt, maybe consider staying in some of those times. Looking back, there is not one single night that I missed that I regret, and I am SO HAPPY to be debt free!!

I am still chasing the FIRE movement, and even though I no longer have debt, I still have massive savings goals. I think about the value of every dollar before I spend it.

2. Stop Caring About Social Media

Look, I love scrolling through Insta as much as the next person. But do you know how many people STILL text me about greek life drama happening on campus that they discovered on Snapchat?? We graduated over two YEARS ago!  I can’t understand how people can still care so much about that stuff to get upset over it.

In college, the social media drama was everything. Who went to what party?  Who went to what bar? Who was hanging out with who on Snapchat?

But in your adult life, you’ve GOT to let that go. Look, I still use social media to keep up with people I knew in college. I stalk all their photos, see who’s living where and doing what, who’s engaged and married and dating and single. It’s fun!

But you can’t let it affect you on a deeper level. You can’t see someone on vacation and get sad you’re not on a vacation. You can’t see someone got engaged, and get sad you’re not engaged, and then run to the bars or go on a shopping spree to make yourself feel better.

How many times have you been perfectly happy with your weekend plans, then gone on social media and seen someone with BETTER plans that looked MORE fun and you feel bad about yourself?

On the debt free journey, I understand it’s hard to not let these things affect you. You feel like you can’t do something while everyone else can.

But remember, these people are living above their means! In 10 years, they’re going to be the ones looking up to you. If you can haul yourself out of debt and actually begin to build wealth, that is way more than these people just “living in the moment” can say for themselves.

3. Suggest Cheaper Activities to Do With Friends First

The hardest part about FOMO is that internal conflict you feel when a friend says, “Hey a bunch of us are going to brunch, are you in?” and on one hand, yes you want to see them and enjoy awesome food, but on the other hand, you really don’t need to be dropping $40 on a random meal. It’s such a conflict because you either say yes and feel the pain of not meeting your debt payoff goals, or you say no and you feel the anxiety of missing out on a fun time.

One alternative to this is to be the first to suggest activities, or change the activity at hand. You can be the person to text in the group chat, “Hey wanna go hiking this Saturday guys??”

Before someone suggests a more expensive activity, you can be the one to make the plans with a cheaper activity!

After all, it’s really just about spending quality time with your friends – not about who can have the most expensive gathering. You don’t have to make it weird by mentioning all your debt woes (although your friends are hopefully understanding) but just mention alternative activities!

4. Here’s a Secret: Nobody else wants to spend money either

Look, nobody wants to spend money! The “pain of paying” is a real thing! Even if it seems like your friends love paying for things, the truth is, no one does. If you could have the same night for free, every person would totally do that!

We often default to going out to the bars simply because we think that’s what everyone else wants to do. We can’t always think of another activity, so we just suggest the bars. It’s fun, we’ve done it before, it’s a known great time.

But nobody wants to be spending the money out of pocket. Your friends are just as unexcited to spend money as you – they just don’t have strong goals backing it up.

If you say something like “Guys we should save money this weekend and just have a Franzia night in” people will 100% be on board. Sure, we all want to go out and do fun things sometimes – but not all of the time! If you can think of a fun thing that saves money for your friends to all do, they will love it.

5. Give In (A Little)

We aren’t trying to never, ever go out and stay in our house 100% of the time! It’s totally ok to go out still! Let yourself have fun.

Think about giving in a little as like a cheat meal on a diet. It’s ok to have a piece of pie at Christmas! That’s not going to make or break you.

However, it’s NOT ok to eat pie every day for every meal. You’re not going to meet your weightloss goals if you’re ALWAYS eating cheat meals.

On the other hand, if you NEVER eat cheat meals, one day you will totally miss out because you are depriving yourself! I know you will quit because it’s just not sustainable to never, ever eat a delicious fatty and sugary meal ever gain.

Just like eating pie, it’s not sustainable to never, ever go out with friends! I mean, who wants to live a life like that? Knowing you can never go out will only increase the FOMO and cause a crash right away!

The point is to be intentional about when you do go out. Choose the times that mean the most to you, rather than just saying yes to every single opportunity. You will get more meaning out of each interaction if you do prove to yourself you value them, as well as save money of course!

I still visited out of town friends, hosted friends, went out and ate at restaurants. I didn’t deprive myself at all! I just didn’t go to every single happy hour/night out possible, I held out for only the opportunities I REALLY wanted to go to.

Remember: it’s not about deprivation, it’s about intentionality.

Deal with FOMO by telling yourself you can still go out to the bars – sometimes. It’s ok to go out. I’m not saying don’t see friends and twiddle your thumbs staring at the wall while you pay off debt. I’m saying be intentional about when you go out.

Own your feelings and own your mindset. Don’t give into your weaknesses of wanting to fit in so you willy nilly do everything your friends do. DO own your strengths of deciding your own future – and what behaviors line up with it, and what don’t.

Remember how much your future self will thank you. I thank my past self so, so much for choosing only the most important days to go out – not every single one.

FOMO is REAL and it is a muscle to build up – putting yourself before everyone else. Remember your goals, future, and and dreams. Imagine the feeling of being debt free, or financially free. Feel how badly you want that and let it help you beat FOMO!

Kelsey Yeager is a chemical engineer, blogger, entrepreneur, home chef, craft beer enthusiast, and founder of On My Way to Happiness, a blog for millennials looking for “more”. Kelsey paid off $30,000 of student loans in 1.5 years off of an entry level salary, and helps other twenty somethings get their finances in order in a simple and fun way.

Money Management

Why You Need a Buffer When Zero Based Budgeting

Why You Need a Buffer When Zero Based BudgetingThis post may contain affiliate links. Check out my Disclosure Policy for more information.

We hear it all the time in the personal finance field, zero based budgeting. It’s an incredibly powerful tool and I know for me, it has been the tool to help me pay off $100k in student loans in 3 years.

If you don’t know what a zero based budget is, it basically means that your budget equals zero by the end of your budgeting period. Basically all money that has come in, then goes out by the end of that budgeting period.

I’m not saying you spend all your money by the end, but that you have sent your money to start working for you based on your goals. My long term goal is to reach financial freedom and my goal right now to get there is to pay off my student loans. This means that at the end of my budgeting period, I do monthly, all my extra money goes to my debt.

It takes some time to incorporate and I know a lot of people are scared to use this model of budgeting, which I totally get. I was nervous to since it means all my money I earned goes somewhere else by the end of my month.

I’ve been utilizing a zero based budget for 4 years now, and I made a mistake this month. I wasn’t anticipating my old student loan provider would pull a payment since my loans were paid in full by Earnest once I refinanced (Use my referral link to refinance and get $200!). However, out went $621 on a zero balance loan and caused me to overdraft.

I acknowledged the mistake and immediately started creating a plan so this doesn’t happen again. You see, I am in a unique situation where I live at my parent’s house while I pay off my debt. My bills are minimal because of this. I also kept a $500 buffer in my checking account and assumed it would be enough since my bills are so low.

However, the perfect storm brewed up in early September (checking account at exactly $500 since I’m a teacher and had used my entire summer sinking fund by then and a payment withdrawn on a zero balance student loan I wasn’t anticipating) causing my entire system to fall apart.

There are two ways you can prepare yourself for these types of things to happen. You can have a buffer in the account you use to pay all of your bills, like I have used. I would suggest having at least 1 pay period of expenses saved up, which is what I didn’t do.

Or, you can get to a position of living on last months income. I give so much credit to people that do this! I think it’s because I’m so angry at my debt for preventing me from reaching my goals sooner that I can’t let money just sit in my account. I need to send that to debt ASAP.

Basically what you would do is that you would save enough in your account that you eventually are at a point that you are living on the previous months income. It’s an incredible concept and tool, but I’m just not someone that has been able to implement this strategy.

Figure out what works for you, and get that zero based budget into action. I promise, it will change your financial life if done correctly. I’m happy to help you with this, just shoot me an email 🙂 How has zero based budgeting helped your financial life? I’d love to hear about it in the comments!

 

Debt

4 Steps to Decide If Refinancing Your Student Loans Is for You

4 Steps to Decide If Refinancing Your Student Loans Is for YouThis post may contain affiliate links. Check out my Disclosure Policy for more information.

I have been in the process of refinancing my private student loans recently and had a ton of people reach out to me with questions about the whole process. One of the biggest ones was, “How do I know if it’s the right move for me?”

That really can only be figured out by you. After all, personal finance is personal.

However, there are some steps you can take to make this decision a little easier for you.

Do you have Federal or Private loans?

This is super important and in my opinion will immediately make your decision for you. If you only have federal loans, I would immediately say, don’t refinance. The reason I say this is because federal loans come with a lot of protections for you in the event something happens. They offer many programs for deferment, forgiveness, and are generally more willing to work with you in the event of job loss, disability, etc.

On the other hand, private loans typically offer no perks like it, most companies you can’t even die to escape them. That sounds dramatic, but I’m being serious. In the tragic event that you die with private student loans, someone is still going to be responsible to pay those things off. If you have any private loans, refinancing might be a good option for you.

Are you just starting out on your journey to pay off your student loans?

If you are, then I would suggest holding off on refinancing. The reason being that once you refinance you will most likely consolidate many small loans into one large loan. I strongly believe in using the debt avalanche method to save money, but there is major research in the debt snowball method to keep motivation high. If you refinance right away, you won’t experience any pay offs right away because you will be tackling a huge loan amount potentially.

If you have been slaying your debt for awhile and are feeling motivated to get this debt out of your life, refinancing might be for you.

Can you afford your monthly payment?

If you can afford your monthly payment, I would say refinancing may be for you. If you are someone that is struggling to afford your payment, then I would say you should not refinance. This might sound crazy, I know. But, refinancing shouldn’t be used to save you money on your monthly payment, if it will extend the life of your loan. You will only be throwing away more money in interest to these companies. Instead, you need to track your expenses, budget, and maybe even increase your income. I’m happy to help you with all of this 🙂

Do you have loans with an interest rate over 7%?

If you do, then I would say refinancing might be for you. By refinancing, you can potentially get a better interest rate. This will save you money in the long run, as long as you pay close attention to the loan details, we’ll get to that later.

Once you have answered these questions, and feel like it is worth it to look into refinancing, then you need to keep a few things in mind. Refinancing isn’t always beneficial and can actually cost you more money in the long run, if you aren’t careful.

Just because your rate is lower, doesn’t mean you are automatically saving money. A lot of companies will provide you with a lower rate and a lower monthly payment, but extend the life of your loan. This most likely will not help you save any money in the long run.

When you are looking into refinancing your student loans, it’s important to look at all the moving parts, interest rate, monthly payment, and life of the loan.

For example, I refinanced my loans with Earnest and it has been nothing but wonderful compared to my old loan provider. When I refinanced, I went with a lower rate (4.97%), lowered the life of my loan (15 years to 5 years), and increased my monthly payment ($770 to $865). This is saving me money in interest because I now have a lower rate, and less time I’ll have the loan. If you decide to refinance your loans with Earnest, you can use my referral link and get $200 when the refinance is complete.

Refinancing can be tricky, but it can be a great tool to use to save you money in interest. If you have any questions about refinancing don’t hesitate to contact me! I am happy to help you navigate the process. Have you refinanced your student loans? How did it help your financial freedom journey?

Money Management

The Solution to Cash Management

The Solution to Cash Management

This post may contain affiliate links. Check out my Disclosure Policy for more information.

If you’re just starting out on your financial journey, you probably feel overwhelmed and frustrated by money. I know I did when I first started. I felt that I couldn’t escape the burden of my debt and no matter what, it would always be with me.

The thing was that I was constantly living in a scarcity mindset and didn’t know how to break it. When I started making steps to change my situation, my mindset slowly started to shift. This shift is important.

It can be hard to figure it out on your own. It took me months of searching the internet and reading personal finance books to get myself to a place where I was empowered by my money, instead of controlled by it.

Recently I got the opportunity to connect with Brie Sodano, founder of From Sheep to Shark, who has created an incredible cash management webinar that teaches you how to stop bleeding money. Brie is an incredible woman that has a goal to help 1 million woman improve their money situation.

Lets be real, I love talking money and personal finance, but I enjoy the topic and have an entire blog about it. I know personal finance and managing money is a tricky concept. It can be difficult to navigate when there are so many different things at play (It’s incredible just how much of your life impacts your personal finance and your ability to manage it).

Brie’s Invisible System to stop bleeding money and start stacking cash has truly covered every aspect of cash management in an easy to follow format. She lays it right out for you and tells you in simple terms how to go about cash management.

Cash Management

The reality of cash management is that there is no one size fits all fix since there are so many things that impact your money. Brie recognizes this in her Invisible System course. She shows you how to overcome these obstacles, like habits and ideas surrounding money and cash management.

In my opinion the most valuable part of Brie’s Invisible System course is that it is realistic. She considers the reality of the everyday person and all of our imperfections. This allows you to find the extra money in your budget and break the cycle of scarcity.

Cash management is one of the hardest parts of getting your finances in order I have learned from my clients. This course solves that problem for you by providing you a manageable system to use.

Saving Money

College on the Company Dime

Education on the Company Dime

This is a guest post written by Melody from Her Designed Life. Check her out for all kinds of resources related to personal finance!

What do backpacks, pencils, and lunch bags all have in common? Their location in school!

For many people going back to school can be costly. In the United States, the national college debt is over 1.5 trillion according to Forbes magazine. After I graduated with my crushing college debt of $65k with a degree equivalent to basket weaving, I decided that I needed to cut costs, live frugal, and pay off my student loans. You can check out how I paid off my debt here.

Why I’m Going to Graduate School

As a young professional I often get asked why I have decided to go to graduate school.

Many of my friends ask why I want to add extra homework onto my day after a hard day at the office. To be honest, I don’t like extra work, but I do like extra pay.

Let’s take a look at the figures.

According to the US Bureau of Labor and Statistics, the cost of weekly pay increases with each level of educational degree you complete.

Income and Education

For example, the median weekly earnings for those with a bachelor’s degree estimate at $1,137.

Let’s say that of the 52 weeks there are in a year. Hypothetically, let’s say that a worker works 48 weeks due to vacations, holidays, sick days, or personal reasons.

The annual average amount that a person could potentially bring in pre-tax without any other deductions would be $54,576. Obviously, this is just an estimate of median salary and deductions and cost of living are the real determiners of your pay.

Now, let’s compare that to the average median earnings someone might receive with a Master’s degree. The median weekly earnings for those with a Master’s degree are $1,341.

Multiply this number by 48 weeks, this equates to about $64,368.

Income and Education

That’s about a 10,000 difference in pay for only one year!  

Is Graduate School Right for Me

Before you even begin applying to graduate school, you must count the cost.

Calculate the cost of your expected income based off of a future degree or certification on one of the following websites: for general salary and experience estimates visit payscale.com and for graduate studies use this calculator. If you see that the end result of your projected income is small or only slightly more than what you currently make, re-assess the financial and career benefits of receiving your additional education.

Check out if the industry is growing fast or has high median income on the US Occupation Outlook Handbook. Most likely, if your position seems to have a high percentage of growth or an increasing median income, the investment in your education may be worth the amount of time and money spent on your program throughout your career.

Compare the tuition fees with the projected income increase. If you find that the median salary for those with your graduate level degree have a high unemployment rate or very little in income increases compared to your tuition fees, you may need to re-evaluate the type of education or professional field you are working towards.

You can create a  simple formula like this to help you determine graduate level coursework.

Your current salary

– Total Cost of the program (Total cost – scholarships, grants, and tuition reimbursement)

+ Expected  Annual Income Raise ( Expected Salary – Current Salary )

= Total Estimated Annual Salary post graduate or certification

Example:

$50,000

  • ($15,000 – $10,500) = $5,500
  • ($85,000 – $50,000) = $35,000

= $79,500 ( Total Estimated Annual Salary post graduate or certification )

* based on pre-tax and deductions

How to Qualify for Company Paid Education

Not all employers are equal, especially when it comes to paying for your graduate studies.

Here are 3 ways to get your company to pay for your ongoing education.

  1. Research your company’s policy on education assistance before you apply or accept a position. This is extremely important not only for traditional education, but also for ongoing certifications, seminars, etc. A company culture that approves of paying for education shows that they value their employees and their competency.
  2. Communicate your intentions for returning to school with your employer. If you are just starting or have been in a position with your employer for awhile, communicate to your manager your education aspirations and career goals, if they align with your current field.
  3. Prove the ROI. ROI stands for return on investment. Explain in detail to your manager or decision maker in your company the return on investment that paying for your education would have on the company. Perhaps there is a very large project that you could apply the theories, templates, or guides from your experience to an upcoming or long-term project.

Now that you’ve proved the ROI with your employer and confirmed with your HR specialist or manager that you qualify for tuition reimbursement, walk through the steps of obtaining entrance to the graduate, doctoral, professional certification, or college admissions. You can then finalize walking through the tuition reimbursement procedure.

In my current position, my company has offered me $5,250 annually in tuition reimbursements. My projected costs for the entire program are about $15k.

My projected income increase with a master’s degree starts at $15k annually.

Add on about 2-3 years of additional experience and my expected income will be much higher.

In conclusion, going to graduate school is a time and money investment. However it’s a great way to not only increase your knowledge, but increase your salary and career opportunities.

Melody Johnson runs the website herdesignedlife.org to help women achieve financial independence by paying off debt, planning for life events, and reaching their financial goals. She is a Certified Financial Educator by the National Financial Educator’s Council in the Metro Detroit area.

Be sure to check out Melody on her social pages.