Hey guys!
This is Justin Goodbread with Financially Simple.
So, you probably feel like you will never pay off your student loans, right?
How do you get rid of them?
Let's talk about that.
Americans owe 1.4 trillion, "T", trillion dollars in student loan debt.
Whoa.
The average student loan payment is $351 a month.
That's like a car payment, which I don't like, but still.
The average doctor has a $161,000 student loan balance.
You know, they've gone to school forever.
161K!
That's like more than the first house I purchased.
So how do we deal with student loan debt?
NUMBER ONE - Find the exact details out of your current situation.
So you want to know the balance.
You want to know what your current interest rate is, and you want to know what your current
minimum monthly payment is.
In order to deal with it, you have to know what you currently have.
NUMBER TWO - Look for a possible refi.
So if you have not consolidated, in others words bring multiple loans into one, or refinanced
your student loans, now may be the time to look at that.
There's a couple of good companies out there right now.
SOFI, sofi.com is probably one of the most popular that people are using these days.
But what they'll do is they'll look at your current balance.
They'll look at your current interest rate and your current monthly payment, and they'll
help you decide whether you should refinance or consolidate and if you can pay the debt
off faster just by doing that.
NUMBER THREE - It's all about the budget.
It's all about the budget.
So in your budget, what you're going to try to do is minimize all ancillary expenses.
Everything that you don't need to spend money on, go ahead and just knock it out.
Don't spend the money there.
Instead, deploy your student loan payment as a necessity in your budget.
But more importantly, don't just pay the minimum.
Pay a little bit more.
So if you were used to eating out and buying pizza (like me) two or three times a week
(which I wish I could), maybe cut that out and go to one time.
I mean, I know it's a sacrifice, but go like to one time a week on the pizza.
Take the extra money that you would be paying for the other two pizza buys that week, and
apply it to your student loan debt.
NUMBER FOUR - Make bi-weekly payments to your student loan.
Well, you've probably never thought about that.
When you're dealing with mortgage reduction, oftentimes I'll tell clients to pay their
mortgage bill every other week.
And in doing so, they're able to reduce the principal faster and not pay near as much
interest.
And you can do the same thing on your student loan.
So what we'll do is if the payment is due on the 1st of every month, then we're gonna
pay (obviously) 200 bucks on the first and 200 bucks on the 15th.
Now, we're going to do that a little bit accelerated so we don't run into a late penalty, but by
paying that payment in two different times during the month, just like on a mortgage
reduction plan, you're gonna knock down your interest on your student loan a lot faster.
NUMBER FIVE - This is probably the biggest gratification in knocking down student loans.
Sell everything.
What?
Yeah, sell everything that you have that you don't need.
Need is the optimal word.
Remember way back when when we were in college and we could live on Ramon Noodles and bean
burritos?
Yeah, we're going to try to go back to those days and get rid of this debt.
So if you have an extra TV in the house, you don't need two; get rid of one.
If you have an extra car, and it's just sitting in the garage, get rid of one.
We can clean the closets out, make a big push, and take all the extra money we're going to
get from those proceeds and apply it to our student loan debt.
The sooner you get angry with the debt, the faster it's going to be dissolved.
NUMBER SIX - Take a job which offers student loan forgiveness.
So I have a client who's a medical doctor.
And he took a job in a rural part of the country in part of a four year commitment.
So he was there for four years.
He made a little bit less than maybe going to a private practice or a populated area
of the country.
By working there for four years, he totally wiped out all of his student loans with his
debt forgiveness program.
So you may want to look at a debt forgiveness program that's eligible in your particular
field.
NUMBER SEVEN - Create additional income.
If we're angry at the debt, we'll figure it out.
There's many apps on line.
There's many blog posts.
All you've got to do is type in "How to make extra money," and your feed will fill up.
If we'll create the extra money, don't increase our lifestyle, and take all the extra money
that we make and apply it to our student loans, we'll knock them out fast.
So guys, that's some seven helpful tips on how you can knock out your student loan debt.
This is Justin Goodbread with Financially Simple.
Let's continue to make your life, at least, financially simple.