A Monumental Moment

I never thought I’d be writing this this early in my life. I imagined I’d be writing this years from now, in my thirties. It took a lot of dedication and sacrifice but I did it. I paid off my student loans at the age of 26.

Upon graduating from college, I had approximately $80K in student loan debt which was comprised of primarily private student loans with high interest rates. I didn’t receive much from the federal government so after six months of being out of college, my monthly payments started kicking in and I was paying about $750/month. Fortunately, I landed a good job which allowed me to afford these payments and I figured I’d be able to make them for the next ten years when the loans were set to mature and I’d have them paid off with interest. My father, however, advised me to stay home and put as much money as I could towards my student loans. I eventually refinanced my loans for a lower interest rate with a higher minimum monthly payment of $830/month with no cosigner and maturation of seven years. I began doubling up on my loan payments and paying $1660/month in order to make that 3.5 years.

I was on a good track to getting them paid off early without incurring too much extra debt and to get out of what I already had accrued. I bought a new car that added to the debt amount but I thought, well, I could afford the monthly payments including my loans, therefore I could afford the car. It wasn’t until I read Dave Ramsey’s The Complete Guide to Money that I discovered how wrong I was. Dave explained to me that I was doing what many other people do which is make poor decisions with money. If I couldn’t afford to pay my purchase off in whole (outside of purchasing a home), then I couldn’t afford it. Being able to afford the monthly payment is how “broke people” think, according to Dave. So, after reading his book in a time where I was wholly accepting of his doctrine, I dedicated myself to paying off my debt and not accruing any more.

I began taking my entire paycheck, minus the amount needed for the car payment and basic necessities, and throwing it all at my “debt snowball.” I paid off my student loans in 3.5 years after I graduated instead of the ten I was originally signed up for and I saved thousands in interest by doing so. Next, I plan on doing the same to the remaining amount on my car and I will then be completely debt-free.

This wasn’t a miracle that was difficult to figure out. It was difficult to stick to and commit to, but I did it. The moment I got paid, I had my monthly expenses figured out and I would know that amount and anything left extra would immediately be thrown at my student loans so I couldn’t wastefully spend it elsewhere. It took sacrifice but it was incredibly worth it and now I got that massive weight off my shoulders. I was fortunate that I got a very good job, my dad wanted me to stay home to pay things off ahead of time and not make the same financial mistakes he had, and I read an incredibly important book at exactly the time I was most receptive to it. I’m beyond happy with my decision and I won’t go back to owing money to anyone.

“The borrower is slave to the lender” is a Proverb (22:7) Dave says repeatedly and it’s true. Another comes from Warren Buffet, “Only when the tide goes out do you discover who’s been swimming naked.” Well, COVID-19 took the tide out and many people struggled financially and for a long period of time, as more continue to struggle but had they committed to not financing things via debt and committed to only buying things they could truly afford, they may have been in a different situation currently. If you haven’t picked up a copy of Dave Ramsey’s book, The Complete Guide to Money, I highly recommend it and can say that it changed my life forever.

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