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Making Sacrifices While Paying Off Debt

Making Sacrifices While Paying Off Debt

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

Paying off debt can be a scary thing to start. I know for myself, I was terrified of my reality when I hit my financial breaking point during grad school.

6 figures of debt and a teaching salary scared the living you know what right outta me. I didn’t know what I was going to do. I had dug myself such a massive hole and I had the absolute smallest shovel to get myself out with.

To this day I thank my grad school advisor for smacking some sense and reality into me when I was still in school and my loans were in deferment.

Without her, I would have been in a longer program, making less money in grad school, getting less scholarship money, making less as a teacher in NY, and paying for rent. The numbers literally didn’t add up and I most definitely would have been living on credit cards for my daily expenses.

Because of her, I made sacrifices so that I can build myself a much better future. I moved home after graduation to live rent free and get a higher salary in NJ. This allows me to reap the benefits of living in a high cost of living area (higher salary), while not paying the sky high rent in the area.

Sometimes you need an outside person to look at your situation and help you create a game plan. I didn’t think to actually create a fake budget at the time, I didn’t know anything about money back then. She got me to start being interested in personal finance and taking an active role to get out of debt ASAP.

If you’re someone that needs help with this, reach out! Find someone to help you. I’m always available to help and if you want something with more structure I have email coaching to help you.

The reality is that you’re going to have to make sacrifices while paying off debt, if you want to do it quickly. For me, I really enjoy my life now while paying off debt. Of course, I’m planning to move out shortly, but this journey has showed me what I truly value and enjoy. Most of which costs little to no money.

Here are some reasons why you should make sacrifices while paying off debt.

1. It can help you save money on high ticket expenses while you pay off debt.

The classic example is the money you spend on housing. This is always a high ticket expense in your budget and one that you should try to get as low as possible. By figuring out ways to lower your housing expenses, it will allow you to spend a little more in areas that may bring you more joy.

For example, by living at home with my parents I am making my housing expenses zero. This allows me to put a ton of money to debt, but also lets me still go to the gym, have a larger grocery budget, and occasionally go to happy hour or dinner with friends.

I’m not saying move back home with your parents. That’s not always realistic, but start thinking creatively about your housing situation. Can you get a roommate(s)? Can you find a smaller or cheaper apartment to rent? Recently, there have been people in the #debtfreecommunity on IG that are selling their houses to pay off their debt.

You need to figure out what you value and what you want to spend your money on. For me, the sacrifice of living with my parents is by far worth getting out of debt faster.

2. It can increase your income while you pay off debt.

I love a good side hustle and I think everyone should have multiple streams of income. It’s worth it to sacrifice a bit of time short term, for the long term gain of being debt free.

Currently, I work a lot of side hustles and it does take a decent amount of my time. Is it ideal? No, but I know it is temporary while I pay off my debt. Without a doubt, by working these side hustles it has brought my debt free date closer and there is no way I would have paid off as much as I have without them.

The great part about side hustles is that you have total control over them because they aren’t your main source of income. I always try out a side hustle and see if it works. If it doesn’t, then I figure out an exit strategy and stop that side hustle.

By making the short term sacrifice of working extra side jobs you will be able to increase your debt payments and ultimately save money in interest in the long run. Figure out what you can realistically manage and see how much you can make to move your debt free date closer.

3. It can create habits that you end up keeping.

When you’re paying off debt, of course you’re going to start doing things for the short term. At first they may be considered sacrifices, but I guarantee that you will eventually adopt some of these new things as habits.

For example, I know that I will always work multiple jobs. It’s just in my nature. I enjoy changing things up and doing different things. I think that’s why I like being a teacher, every day is always different. Eventually I won’t work as much, but I think I will always work extra jobs.

Also, at first my living arrangement was solely so that I could pay off debt. Now, I want to always make sure to live way below my means. This definitely means that I don’t plan on buying a big house, I enjoy small, minimal living now and I don’t plan on changing that.

The sacrifices at first that you create might just end up being habits that you create and end up enjoying. I am shocked by how much my life has changed since committing to paying off my debt. It’s amazing what you end up valuing in the long run when you have big goals.

Remember, the sacrifices you make are temporary.

Ultimately, the sacrifices you make are temporary and once you have reached your goal, you can change things again. What it comes down to is always having a goal you want to reach. This will help you to determine what you are willing to sacrifice.

If you want to reach your goal faster then going out to dinner, you may decide that night out isn’t worth it. The best part about personal finance is that it’s all up to you. You can do whatever you want and you need to decide if your goals are more important than certain things. What have you sacrificed to pay off debt?

Debt

Debt Free Update: $124,378 Paid Off!

Debt Free Update_ $124,378 Paid Off!

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

I feel crazy typing this, but now that I’ve been on this journey for roughly 3 and a half years, I feel so close to being debt free, even though I have $76,718 left. Maybe that isn’t crazy, but I know I’m no where close to being done, it just seems so much more manageable.

I remember when I hit my financial breaking point and absolutely freaking out about just affording my minimum payment on my teaching salary. Now I’m at the point where it’s no longer a stress in my life.

Of course, I still have about $1,100 as a minimum payment every month, but that’s a lot less than the $2,000 it was when I started. My monthly minimum payment would be $1,000 now, if I didn’t refinance.

Yes, I took about a $100 increase in minimum payment, sounds crazy right? But, this allowed me to get an interest rate of 4.97% instead of 7.05%, totally worth it in the long run.

Refinancing isn’t for anyone, but for me and my student loans, it was something I had been working to do for years. I am so happy to have a lower interest rate because so much more of my payment goes to the principal now. If you are considering refinancing your student loans, check out my post that outlines some questions to ask yourself before doing it!

Debt Free Update: Private Loans

I hate all of my student loans, but especially my private loans. I especially hated them when I had my old provider. I will say, I don’t hate them as much since I refinanced them with Earnest back in September 2018. They are awesome to deal with, listen to feedback and actually make the changes, and I am finally seeing actually movement in my pay off of them.

In September 2018, I refinanced $45k of my student loans, which was all of my private student loans. Now, I have $23,981 in private loans, I’ve paid off $21k in 7 months, just in my private student loans! This never would have been possible, if I didn’t refinance my loans, because I was paying so much in interest every month. If you are considering refinancing your student loans, you can use my referral link to get you $200 when you refinance!

Things are very up in the air for the second half of the year for me, my plan is to pay my private loans off by the end of the year. This goal will change depending on how things pan out after June.

Debt Free Update: Federal Loans

My federal loans are still on income driven repayment. I just renewed it and my payment is going up $50 to $300. This is actually a good thing because my loans accrue about that much in interest every month.

While focusing on my private loans, I have been paying the minimums on my federal loans, but making an extra payment every month to make sure the interest is paid off every month. The reason I do this is because I don’t want the unpaid interest to be added to the principal, making the loan increase. This will require me to pay even more in interest and even more in the long run.

This is why it is so important to understand these programs and stop making blind student loan payments. Your payment may be as small as $0 every month, which means your principal is going to increase on your loans. So, yes your loan is in good standing, but you are increasing your principal every single month!

My loan amount doesn’t really change much on my federal loans for now, I’m basically just paying off my interest every month. Right now my federal loans are $52,736. These are broken down in many smaller loans. Once I pay off my private loan, I plan to pay off my federal loans by avalanching the smaller loans based on their interest rate.

Debt Free Plan

I have been going very hard at my goal to pay off this debt as fast as possible. I’ve increased my income, moved back home with my parents, and cut my spending down. Currently, my debt free date is May 2021, which is incredible! It’s amazing what consistent choices over and over can do.

I’m not sure where my debt free journey will go by the end of the year. I have plans to move out, maybe get a new job, I’m okay to slow down my journey a bit to move out of my parents house. I have paid off so much debt, way more than I ever thought would be possible at 26 years old, that I’m okay with it all.

Right now, if I continue with my current plan, I will have just turned 29 when becoming debt free. My goal has always been to have my student loans paid off by my 30th birthday. Right now, I have a nice buffer of time on my side and I feel really good about where I am at with my finances. How is your debt free journey going?

Debt

Good Debt vs. Bad Debt: It Doesn’t Exist

Good Debt vs. Bad Debt_ It Doesn't Exist

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

You hear it constantly, people sharing what is considered good debt and what is considered bad debt. But, who ever decided what was good and what was bad? And I don’t know about you, but I tend to find different sources saying different ones are good and bad.

I also find that it’s bad in some situations, but good in others. Like, if you pay off your credit cards and never pay interest, then it’s good debt since you’re getting the rewards, but carry a balance and it is immediately bad debt.

This is what tends to bother me in the personal finance world, people creating these one set systems for people to use. Don’t get me wrong, I think it’s great to have a structure to follow when you’re first dipping your toes into your own personal finance.

It’s nice to have something to follow and guide you at first, but there is a very important word in the phrase personal finance, it’s personal! You need to create your own system eventually that works for you and your finances.

Why there is no good debt or bad debt.

Ultimately, the decision is yours to make what you consider good debt or bad debt. In certain situations, debt is a great way to achieve your ultimate long term goals. All debt is obviously not created equally and it needs to be treated that way.

Every person’s unique situation changes if a debt would be considered good or bad. In one situation the debt may be considered a good choice, but in another, it would be considered bad. This is why it comes down to you and your personal decisions related to your finances and your long term goals.

For example, I consider my student loans a bad debt choice. Most people would consider student loans good debt, but what it comes down to is if it was a good financial move. For me, my student loans totaled 4X the salary I got when I graduated, I couldn’t even afford my minimum payments and housing. If I lived in other places in the country, my salary would have been lower and my debt would have been 5X my starting salary.

This was absolutely a bad money move on my part. I didn’t know better and didn’t know how to manage my money or how to make college more affordable for me.

On the other hand, I recently bought a car and took out a car loan. The reason I did this was because it had a very low interest rate of 0.9% and I was able to put a significant amount down and had a trade in. The car is worth a lot more than my loan and the money I would have needed to cash flow this purchase will now be able to go towards my student loans.

You can’t look at debt as good or bad exclusively, rather look at it as a good money move or not to move you closer to your long term goals.

How to determine if it is a good money move to use debt.

What it ultimately comes down to is if it aligns with your long term goals and helps you to get there. If it’s going to be a burden on you and will not make financial sense for you, then it’s not a good move.

For example, I use credit cards. I have never carried a credit card balance and have always paid them off in full. I use them because it is easier for me to track, I can easily dispute charges and it’s not my current money I need (if I used a debit card and someone got my account info, those charges would take time to get refunded and ultimately be my own money I lost), and it gives me cash back.

I would consider this a good money move because I don’t pay any interest, I have the money set aside in my bank account before the purchase, and it gives me some cash back.

Another example is that I refinanced my student loans to get a lower interest rate. This made my monthly payments more, but it decreased the life of the loan and lower my rate from 7% to 4.97%. This ultimately saves me money in the long run in interest. If you want to check out Earnest, you can use my referral link to get $200 when you refinance!

Ultimately, it comes down to your values and how you view your personal finances. What I feel is a good money move, may sound ridiculous to you, and vice versus. You need to make each decision about your finances and make sure that it helps you to reach your long term goals.

If it prevents you or makes it more challenging to reach your goals, then maybe it isn’t a good money move for you. By understanding what your goals are and what you value, it will allow you to decide what are good and bad money moves. What are some of the big money moves that you have made? 

 

Debt

7 Secrets You Will Not Want To Know About Student Loans

7 Secrets You Will Not Want To Know About Student Loans

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

Every since I wrote my post about blind student loan payments, I have been getting a ton of questions about student loans. It is crazy to me that student loan providers are allowed to do the things that they do. It’s absolutely terrible, which is why I think student loans are probably one of the worst debts.

There are so many things people don’t know about student loans, but they let 18 year olds sign their lives away to them. It’s insane! And I was one of them that unknowingly did it! But, I want that to change, I want every person that gets a student loan to know the reality of them.

They can be a tool to use to better your future, but they need to be taken out with education about what these debts really are. Student loans are unlike any other kind of loan, which can ruin people’s financial future.

Related posts:

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

How Student Loans Impacted My Credit

A Honest Review: Round Up To Zero

How to Pay Off Debt on a Low Income

1. Minimum payments on student loans don’t need to cover all of the interest.

This is what separates student loans from most other loans. Most loans, you are at least covering the interest that accrues throughout the month. Student loans are completely different. You can be making your minimum payment, but not paying off your interest every month. This will cause your loan to grow and grow and you will never pay it off.

This is why you need to stop making blind student loan payments and check to see if you are paying off at least your interest every month. If you aren’t, you need to make a change in order to ever pay off your student loans.

2. Your student loan interest deduction on your taxes is making you lose money.

We all get wrapped up in tax deductions and sometimes it does financially make sense to make certain money moves that allow you another deduction. But, being able to deduct your student loan interest every year is not helping your financial picture.

I have heard so many people tell me they aren’t rushing to pay their student loans off because they get a tax deduction. You get to claim $2,500 every year, but add up how much you lose every single month to your student loans. Think about how much you’d be saving in a year if you just paid them off. I know for myself, I’d be saving about $40k, way more than the $2,500 I get to deduct.

3. Your family will still be responsible for your student loans if something happens to you.

There are some programs in place for federal loans and some private loans as well, but most student loans are not forgiven in the event that the borrower passes. The crazy part about this is that with most other debt, there is a tangible item attached to the debt. For example, if you have a car loan, your family can sell the car to help with the debt associated with it, similar to a house and a mortgage. With student loans, your education will not help pay for that cost if you pass.

This is important to keep in mind, especially if your parents or other family member cosigned your student loans.

4. Your wages can be garnished, if you’re delinquent on your student loans.

This is a vicious cycle. You can’t afford your monthly payment on your student loans, your wages are then garnished. If a recent graduate has an entry level job and can’t afford their monthly payment, it will be hard to get ahead when their wages are garnished. This is super important to keep in mind if you’re struggling to make your payments each month.

If you are delinquent, they can also garnish any social security benefits, disability benefits, or federal refund checks.

5. In some states, you can lose your driver’s license for not paying your student loans.

This is different in every state, but it’s something to keep in mind. This is yet another vicious cycle. If you lose your driver’s license, it then may be hard for you to get to work, if you live in an area that doesn’t have public transport.

6. In some states, you can have your professional license suspended for not paying your student loans.

This would prevent you from working in the field that you took the student loan out for. Which would prevent you from making a payment on your student loans potentially. This would prevent you from turning things around and getting back on track to paying your student loans.

7. You can be sued for not paying your student loans.

In the event that you are not paying your student loans, you can be sued by the company. This happens much more frequently with private student loans because they don’t have programs in place to help borrowers afford their monthly payment. However, they also don’t have programs that can grow your student loans, like I mentioned in number 1.

I encourage all of you to get educated about your student loans. Ask questions, do research, know what your student loans mean. If you haven’t taken any out yet, but are thinking about it, understand the reality of them and consider alternate plans. If you’re struggling to make your payments, get on a budget and get on a better financial path, so you don’t have to deal with any of what I mentioned above. How have you helped yourself to learn more about student loans?

 

Debt

Why Tax Deductions Shouldn’t Change Your Debt Free Journey

Why Tax Deductions Shouldn't Change Your Debt Free Journey

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

This time of year everyone is figuring out their taxes, filing their tax returns, making sure they get all of their tax deductions, and waiting on their tax refunds. It comes with this time of year. There is a huge personal preference to get a large refund or a small refund. I outlined why I plan to make myself get a smaller refund, but I understand why some people like a larger refund.

Currently, I get a larger refund because when I originally did my paperwork at work, I had no idea what I was doing. If I’m being totally honest, I’ve just been too lazy to change it! I plan to change it when I get a new job though.

A lot of times people get wrapped up in the tax deductions and it can be overwhelming. Lately I’ve been getting asked a lot about my debt free journey, especially by friends and family. Most of the comments I’m getting are surrounding my student loan tax deduction and not getting it when I pay off my student loans.

I try really hard not to eye roll at this, but it can be very difficult. Yes, I’ll lose my tax deduction when they are paid off, but I’ll get to keep all of that money. My friend shared this article with me that does a wonderful job explaining the math behind this, if you’re into that kinda thing like me!

Why Tax Deductions Don’t Matter

Okay, that’s being a bit dramatic. But, it isn’t exactly wrong. Yes, tax deductions are nice, but they shouldn’t dictate how you manage your finances. You should never do something solely because you’ll get a tax deduction for it, or it will lower your taxable income.

If your money move that you are making adds something else to your financial picture, then absolutely go for it! But, I wouldn’t make a move solely because you get a tax deduction. For example, I’ve literally heard people say they don’t want a higher income because it will push them into a higher tax bracket. That’s insane!!!! Taxes and tax deductions should not dictate your money moves, keep them in mind, but don’t let it sway you this much.

Let’s go back to my student loan interest tax deduction and losing that tax deduction once I’m debt free. The tax deduction would lower my taxable income by $2,500, but I’ll then be able to pocket and invest the $40k a year I’m currently paying towards my loans. Even if I just put it in a high yield savings account, that money would give me a nice return each year.

What you should do instead.

Pay off those pesky student loans! Put that money back into your budget because student loans are evil! I outlined why they are and how blind student loan payments will cause you to pay so much more on them, here. I encourage you to sit down, track your expenses, get that zero based budget going. Send all of your extra money to debt, after you have your emergency fund, and get those things out of your life for good!

If you need help with this, comment below, I love helping people get their budget set up and be sure to get my Google sheets template to help you get started with your own budget.

Don’t fall into the tax deduction trap.

It can be easy to listen to others when they are talking about finances. Don’t be afraid to be a little weird! If I listened to the vast majority of people, I’d still be drowning in $201k of student loans, instead of only $85k (HA!). But in all seriousness, the long term benefit of not having student loans definitely outweighs the small tax deduction I’d get every year, or not if my income increases. So, let’s get moving on freeing ourselves of student loans! I’d love to hear your experiences, have people told you not to pay off your student loans for the tax deduction?

 

Debt

When to Slow Down Debt Payments

When to Slow Down Debt Payments

When you’re paying off debt it can be difficult to slow down the process. I know for myself, I am so focused on paying off my debt that I sometimes need to be brought back to reality. It’s important to remember that a debt free journey is part of a bigger plan.

For myself, my bigger plan is to be able to live a life I love without having to think about money. But that also means that sometimes I need to not focus so heavily on my debt free journey and think about the reality of life. When you’re so focused on paying off your debt and the life you will live after your debt is gone, this can be difficult.

Sometimes, it’s important to slow down or stop extra debt payments all together. It depends on your life and what your goals are, but sometimes it needs to happen for what makes sense in the long term.

1. Unexpected life events would require you stopping extra debt payments.

This can be a long list and really depends on what your income is. But, any unexpected events, like job loss, or medical issues, could mean slowing down or stopping extra debt payments all together. If you’re single, this would definitely require you to stop making extra debt payments. But, if you have another income to rely on, it’s possible that this wouldn’t be the case.

My suggestion for any unexpected life events, is to stop extra debt payments and hoard any extra money. The reason this is important is because there is so much unknown in these events, for example, the recent government shutdown. Anyone who experienced the shutdown knows that the end is unknown. This means that you don’t know when you will be paid.

This is why it is important to stack any money you have coming in, even if you have a bit extra at any given time to throw at debt. That extra money will be there once you get through this unexpected event. Once things have settled down, then you can assess your finances and make an extra debt payment.

2. Any unknowns in the future could slow down your debt payments.

If you’re unsure about things in the future, you may want to consider slowing down or stopping your debt payments. This could be something like your job security being unknown, you may want to stop making payments or at least slow down.

This could also be something that you’re planning to do. For example, I am right now unsure of where I’ll be working and am planning to move this year. So, I am not stopping my extra debt payments, but I am slowing it down to put more money into my emergency fund to plan for it. This way I will have extra money to cover the unknowns of the second half of this year. Once things get settled for me, I can assess my finances and make an extra debt payment.

It is more important to plan for these unknowns when you know they are coming, then to simply hope things go according to plan. Hopefully the money you save up won’t be needed, but in the event that it is needed, it will be nice to have.

3. Needing to cash flow necessary expenses.

Life happens and sometimes you need to purchase things that wasn’t planned for, think car or house problems. It is better to slow down or stop debt payments to cash flow the purchase, then to go into more debt to purchase something. It’s pretty counter productive to being sending extra money to debt, but going into debt at the same time.

One way to avoid this is to cash flow the expense, meaning you send all extra money until you have the cash saved up for the purchase. If it is an expense that won’t be needed for a while, you can also start a sinking fund for it.

Everyone is different and decides what is considered a necessary expense, but it’s important not to go into debt for these things, if it can be avoided.

Keep in mind your long term goals when planning your debt free journey

Everyone wants to get out of debt quickly, but life happens and sometimes our plans don’t work out. It’s important to remember what you have planned for the long term, then to make extra debt payments. Sometimes, it makes much more sense to slow down or stop extra debt payments to get through a specific situation life has thrown at you. Just remind yourself of your long term goals in these situations. Have you had to stop or slow down extra debt payments?

Debt

Why You Need to Stop Making Blind Loan Payments

Why You Need to Stop Making Blind Loan PaymentsThis post may contain affiliate links. Check out my Disclosure Policy for more information.

There are so many terms with student loan payments and really anything financial. The real tricky part is usually a Google search doesn’t even really help you, at least not quickly. Most of the time, you need to have some background knowledge about student loan payments to navigate your way through the answers.

Unfortunately, this is why you hear stories all the time about people borrowing X amount of student loans and now owe 3X after making all their loan payments on time. The world of debt and student loans is scary misleading and filled with unknowns, if you don’t understand the small print.

That’s why I’m writing about this. I don’t want there to be any more stories like the one I shared above. I don’t want people signing up for different payment plans or forbearance or deferment and not knowing the whole picture. These plans all have significant implications to your financial future and need to be carefully considered from every single angle.

The main reason we hear those stories is because people sign up for forbearance, deferment, income driven repayment plans, or something of the like. These are usually offered when a person can’t make their minimum payment and a lot of times are used to solve a problem quickly. However, I caution you to use these quick fix options for your loan payments because they carry major consequences in the long run.

Student Loan Forbearance & Deferment

Student loan forbearance and deferment can be requested when minimum loan payments can’t be made. It can be used as a fix to avoid default on your loans. However, you may be responsible for all interest that accrues on your loans during the time of forbearance or deferment. You will need to find out the details from your loan provider to find out how it works for your situation.

It is super important to find out what happens with your interest during the time you are in forbearance or deferment. The reason this is so important is because if you are responsible, then you will either pay it each month, or it will be capitalized at the end. What this means is that your interest will be added to your principal, ultimately making your student loans larger.

If your interest will be capitalized at the end, this will increase your principal and interest will accrue on your new principal balance. This increases your monthly interest amount because more interest will accrue each day. This ultimately will make it even more difficult to pay off your student loans in the long run.

Income Driven Repayment Plans

If you have the option to do an income driven repayment plan, it can be an option to be considered, but you need to be sure you understand the implications of it. Every plan is different and you need to make sure that you follow your plan exactly and find out exactly what this plan means in the long run.

Some plans allow you to be on a plan for 10 years and after all on time payments, the rest is forgiven. However, this means that you will have a payment for 10 years and if your income increases significantly, you will need to have a minimum payment that reflects that.

The other issue with income driven repayment plans is that most plans do not pay off the interest each month. Your interest will capitalize and your student loan principal will get bigger, similar to what I explained with deferment and forbearance. This needs to be carefully used because it can end up costing you so much more down the road.

However, income driven repayment plans can be used as a great tool. I currently have my federal student loans in one while I pay off my private loans. The reason I did this is because my minimum payments were going to be $600 and my loans accrue about $300 in interest every month. Even though my payment currently is $250, I always make sure to pay off the interest on them while I focus on paying off my private loans. This allows me to pay off my private loans faster and keep my federal loans from getting larger.

Refinancing

Refinancing your student loans can be a great tool to use, especially if you are struggling to make your payments each month. Of course, you need to make sure you understand the implications of refinancing though. If you need help deciding if refinancing is for you, I wrote a post that walks you through deciding, you can find it here.

Typically when you refinance you are changing something about the terms of your loan. The principal is staying the same, but your length and interest rate is typically changing, which changes your minimum payment.

If your credit score and salary has increased significantly since you took out your original private loan, I think it’s a great idea to look into refinancing. The reason being that chances are you will qualify for a better interest rate, which may lower your payment each month and total amount you pay in the long run.

For example, I refinanced my private student loans to save me money in interest. I did this by lowering my interest rate, shortening the life of my loan, and increasing my minimum monthly payment. Refinancing can be a great tool to save money in interest when done properly. I refinanced with Earnest and recommend them, if you would like to refinance your loans, you’ll get $200 with my referral link when you qualify!

However, with refinancing you need to be careful that you don’t end up adding more to what you are going to have to pay in the long run in interest. If you need to lower your monthly payment, this may be an option for you, just know that you may increase the amount you pay throughout the life of your loan.

Changing habits, tracking expenses, and budgeting may be a better option when you can’t make your loan payments.

These are all options when you can’t afford your monthly payment, but they all carry some pretty signifiant baggage that can hurt you financially in the long run. I highly suggest reflecting on your spending habits, tracking your expenses, maybe adding a side job and getting on a budget instead of utilizing some of these to lower your payment. If you need help setting up a budget, I have a template for you! The reason I suggest this is because you will allow yourself to change your financial future in a positive way by doing this. By utilizing some of these, you potentially hurt your financial future. I want to hear from you! What are your thoughts on these student loan programs?