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The Good ‘Ole Days
In your early 20’s, there was no worse feeling than waking up from a night out and then checking your bank account.
The anxiety level was comparable to checking your end of semester grades and having the server crash. It’s enough to give you a stomach ache.
Real Life Is Here
Flash forward 10 years and you still get that same feeling- but why? Surely you didn’t work so hard to have not gotten any more financially stable in the past decade. You aren’t that crazy college sophomore anymore, you have a job and a dental plan now. You’re officially a “grown up” but did anyone ever actually teach you how to “adult”? Sure, you can watch the news and know who you’re going to vote for every four years, but did anyone ever teach you about interest rates, IRAs or how to invest those little pennies? I’m going to assume not. We were too busy learning the square root of pi (which I’m sure we all use in our everyday lives).
Everyday expenses make it almost impossible to save for an emergency- or better yet, to retire one day.
As a teacher, I heard all the time from the other people that I worked with, “there is too much month at the end of my money.”
I would think, why is this? I am a professional. I went to college, got a job and yet, I seem to have even LESS MONEY than when I was a college student.
Then it hit me, I’m pretty sure I did have more money as a college kid. Why do you ask? Because of my then favorite holiday, Loan Dispersement Day. I’m sure you remember this day- you wake up, check your account and there is about an extra $1,000-$1,500 in your account, and you feel like you’re the richest person of all the other broke college kids.
Little did I know, that I was going to be paying for my favorite day of the semester for the next 20 or so years.
Bills, Bills, Bills
Now, Loan Dispersement Day has morphed into a thing called student loan payments, and car payments, bills, the occasional credit card bill and the biggie, rent. My paycheck would last as long as it took for everything to come out of my account. Then I would be back to gathering my pennies to go and buy some noodles to eat.
I had managed to bury myself in such a financial hole, that I was afraid to check the mail for fear of letters from all the people that wanted me to pay them. I was so stressed all the time, that it actually started to affect every area of my life.
As fool.com suggests, finances has major effects on a person. From your health- high blood pressure from stress can leads to heart attacks, it cramps your social life, and can make home life just as unpleasant.
Growing up in a single parent family, the struggle is real. Nothing was worse than coming home from school and the air conditioner has broken. With people strapped so tight that they have every dollar accounted for, a small unplanned emergency can quickly turn to a huge problem.
Well now what do you do? And out comes the credit card with the high interest rate to fix the problem. Not to mention, if you accidentally forget to make a payment one month, because let’s face it, life happens, then your minimum payment can double or even triple.
It is a vicious cycle, and if you don’t have someone to help you, either financially or even just some advice, the hope of figuring it out is slim to none.
Tips and Tricks to Tackle Tears
• When you call your student loan provider and they offer you to defer or pay less, DON’T DO IT.
It seems like such a great idea, right? WRONG. I fell victim to this trick… for years. It did not help me financially. In fact, it just accrued my interest, so ultimately I have more to pay back now.
• Those radio ads late at night offering to help you out of debt- again, NO. The old saying is true here, if it seems too good to be true, then it is. Again, I made this mistake too. “Pay us and we will take care of all your loan confusion.” Seemed like a good idea at the time, and I was being an “adult”. Looking back now, I could kick myself for making such a harebrained decision.
• Pick your credit card with the highest interest and highest amount owed to pay back first.
Think of it as a hiking trip, you want to get the highest and hardest mountain out of the way first.
This way, when that’s done, you have smaller mountains to conquer and you can definitely do it with that big one out of the way. (obviously make the minimum payments on each so it doesn’t affect your credit) and then you can slam the others with massive payments later.
This will also make you feel a little freer and like you have accomplished something- this is a huge help in keeping your debt burning self going.
• When you do get a credit card, make it worth your while. Get a card that will give you points towards something or some free cash back. Sure, we all want the discount with store credit cards, but do you really need 34 vintage tees? Rather, get a card that will help pay for a trip overseas or give you some cash back from your grocery bill. (Think of it as modern day couponing)
• Speaking of a credit card, don’t live on it. Paying off a shopping spree that you did so long that you don’t even wear those clothes anymore is not fun. Furthermore, if you have an interest bearing credit card, those jeans that originally costs $30 will actually cost you $35 or $40. That’s $10 just thrown out the window.
• Last, shop around for interest rates, especially if you have good credit. If you have a decent credit score, you should not be paying a high rate.
• High interest = throwing money away.
The End is Near
No matter what financial situation you are in, now is the time to tackle it. Your debt does not just go away, no matter how hard you wish. Imagine, months or a year down the line, you have no debt. It really can happen to you!
The toughest part is the initial step. It’s scary and if you are like most people, you have just come to terms with living a life full of student loan payments or credit card bills- but it doesn’t have to be like that.
Facing your finances is hard for everyone, but with a plan in place, and sticking to it makes a huge difference.
Day by day, then debt will go down and then one day, you’ll make that last payment and then YOU ARE DEBT FREE for the rest of your life.