Struggling With Loans?
What has you the MOST stressed out? Is it your job, people around you, the situation you’re in, roommates, not being healthy enough, working too much and not having enough free time, the unknown, or something else? For me, it’s generally money. Not solely because I want to be a millionaire, but because with money, I could live the way I wanted to live. I could do the things I wanted to do. And I could do the things with whom I wanted to do them with. I wouldn’t have to put Carmen and me through certain situations that we either have already been through or will end up going through at some point. I agree that money isn’t EVERYTHING, however money is a means to do the things that you wish to do.
I have always considered myself relatively poor either because of my income or the amount of student loan debt I had accrued. Every since I was 8, I have had a job. Albeit, the first job I had was only a paper route but it allowed me to do the simple things that I wanted to do with my brother and friends without having to pester anyone else for a mere $10-$20. I could go down to the local convenient store and get a snack, drink, or even play an arcade game. I didn’t make thousands of dollars, however I made enough to be happy and put some extra money away for when I got older.
When I was 16, I bought my first car outright with my own cash. Shortly after, I bought a small Suzuki Enduro motorcycle the same way. Neither were high-end, flashy vehicles, however they were just enough to get me from home to school to soccer practice and to work. I didn’t need them to show off to friends at school, girls, or family. They were what they are, a vehicle to get me around. Shortly after this, my car’s frame rusted out and was unsafe to drive. I was upset, however had been smart with my money and stashed some away. I was able to locate another older vehicle that suited my needs and paid cash for it. Again, this wasn’t a fancy car, just a small Honda Civic Coupe. Soon after this ‘new’ car purchase and after learning to ride my small Suzuki, I decided to upgrade a bit. I wasn’t sure exactly what I wanted; however I was looking for something a bit more…fancy. I splurged a little on this next one, however I did the same thing as I did previously. I bought this bike with cash and am still enjoying it to this day.
Fast forward a handful of years to Valentines Day of 2014 (I think...?) and I got T-Boned coming out of the parking lot to my condo: the car was totaled and I had a ‘mild’ concussion. The good news? What good news could there be you may ask? I had a three-day weekend in which I told myself I would buy a new car by the end of it. Searching high and low I finally found one that fit my needs, albeit a little more expensive than I wanted to pay, about 1.5 hours north on Monday evening as I was about to give up my car hunt. I bit the bullet and again ‘splurged’ a little more on this car than I have in the past. I went the next day, handed the used car dealer an envelope with cash to purchase this car.
I am not telling you these stories to brag about having enough money to pay cash for vehicles. I am telling you this because you don’t need to be making 6-figures to pay cash for a vehicle. You don’t need to have a high end job either. You just have to tuck some money away and budget appropriately for such occasions. As Dave Ramsey says ‘live like nobody else does, so that someday you can live like nobody else does.’ For me, I didn’t go out and drink, party, and ‘live it up’ with friends or family over the past decade. Why? I had something a little heavier on my shoulders, a pile of college debt – which I’ll touch base on next. Living this way was not an easy decision, as I missed out on many experiences and developing more and better friendships. However, what it did get me was no lease, no additional debt, and a clear mind at the end of the night.
Because I did not take on any additional debts, I was able to target my school loans much easier and with greater success. Unknowingly, I’ve been following Dave Ramsey’s Total Money Makeover without ever reading it before. After reading it, I have entered around step 3 out of 7 and am on track to completion. He says these steps are essential to the path of becoming wealthy. This, my friends, has and will continue to significantly decrease the stress in my life.
How did I manage to tackle school loans and become debt free by 26? The actual steps I took was "snowballing" them. I dedicated all possible time and income to paying the monthly minimum on 2/3 of the loans. For the last, and smallest loan, I paid an extra amount that wouldn’t strap me too much in my daily living, but still make a sizable dent in the loan. I did this month after month, until the loan was relatively small and I had enough money in the bank to pay it off 100%. I paid it off and took the money I was dumping into the loan on a monthly basis and put that into the next smallest loan, loan number 2. Again, this load quickly dwindled and when I saw it reach a relatively low value, I paid it off in full with a good chuck of my savings. What next? You guessed it. I took the total figure of what I was paying for loan 2, and dumped it into my final loan, loan number 3. Again, when this loan became low enough in which I had enough in savings, I paid it off. It was an instant raise, and weight lifted off my shoulders. It was one of the most liberating experiences of my life.
However, I didn’t stop there. I then went on a journey of self-growth and development to be happy and do the things I wished to do. I quit my job and drove cross-country for over a month- this is where my new life began.
Here’s a look behind the scenes of how I became debt free by 26.
Don’t take out a loan – you won't have to pay back more than you borrowed. Interest kills.
Set financial goals – determine how much money you want to make or put into savings in what time frame. Take actions to get to this point.
Create a budget – By having a budget, it’ll be easier to tell if you are spending too much money in a particular area.
Be open minded – Keep an open mind to new opportunities that come your way, new job options, and different career paths.
Have vision – Have a vision of how you want to live your life, the color of house you want to pay cash for, where it's located, what car you want to drive and pay cash for, and what you want to do in your space, time, and with friends, etc. Draw out exactly how you want to live your life.
Self-belief - If you don’t have self-believe or self-confidence, how will others see that in you? Where will your next promotion come if your boss doesn’t see these qualities in you? If you’re struggling in this department, scope out this article on 7 Ways to Look Confident, Especially When You Aren’t
Before the age of 22, and honestly even after this age, I lacked numbers 4-6 above. I have been developing them over the years, however I still struggle on a daily basis. At the young age of 22, I never had vision or an open mind until I was introduced to a company. Honestly, I was at first closed minded, and later –after leaving a job I was miserable at – understood the importance of keeping an open mind. Six months later, I finally said yes to this company, which ended up sky rocketing me into my personal growth and development journey, as well as my ultimate goal of total life freedom.