Okay so before I get into this post I want to say one thing, so listen up: I am in no way an expert on student loans. This is how I am handling mine and how I understand them. This post is in no way shape or form financial advice, legal advice, or honestly life advice. This is just what I am doing to make my student loans less vomit inducing. Okay, with that out of the way, let’s get into it!
SO, student loan debt. It is one of my favorite least favorite things ever and the biggest thing that causes me stress and literal lack of sleep. But, it is something that I knew I would have after graduation before even getting to my first day of classes on campus four years ago.
For a little background, my mom is a single mamma of three kids all whom she put through school herself. To do this, we all had to file for student loans to be able to pay for the schools we wanted to attend. I joke with people that I “took out every loan under the sun to get to go to school”, and it’s true. Each semester we filled out the FASFA (a legal document and application many families fill out to apply for financial aid) and each semester I qualified for all loans offered by the government. Sadly, those loans were not enough to cover the astronomical cost of school so my mom (bless her) also filed for a Parent PLUS loan on top of the general federal ones I received. Outside of my loans, I also received two or three grants (different than loans, similar to scholarships) from my university that helped make the cost of school more affordable. When it was all said and done, I had a total of four loans per year I was taking out in order to go to school. Oh boy.
Now, I know I could have gone somewhere cheaper. Somewhere closer to home where I could save money by living with my mom. But you know what, I wouldn’t have the friends, relationship, the education, the life I have right now, so all of the heaping pile of debt is worth it to me.
So you’re probably thinking, okay we get it, you did what you had to do to get through school and get an education. But you haven’t gotten to how you are handling them now! Patience young grasshopper, I am getting there.
If you are someone who has student loans (either currently in school or post-grad) I encourage to get comfortable with them. Make them your friend, invite them to dinner. Stare at them on a Saturday night and know them like you know your first home telephone number. You can never be too comfortable with these. The more you are normalized with them, the less intimidating they are and the less they make you wanna sh*t yourself. Maybe.
I am not being dramatic when I say I have an intense, color-coded, excel spreadsheet with all my student loan information on it since I was a second semester freshman. Every few months I would log in to my financial aid account and read more about my loans in order to be more knowledgeable about them. I did this because I am much more comfortable with something and less afraid of it when I feel knowledgeable about it. The more I know, the better I feel. Same goes with my student loans. Below you will find a snapshot of excel sheet. This document lives on the desktop of my computer so I can see it every single day and by reminded of why I work so hard. Please, be kind in your thoughts when looking at this. These numbers are real and they are mine. I am not ashamed of my student debt and I know there are other people like me out there. If you are someone who doesn’t have to worry about this, I hope you find this post to be informational and help you get a better understanding of the hardship so many people face because of their student loan debt.
To explain, the first screenshot is a look at how much total I borrowed in certain loans for the entire year of school. In the first part of my excel sheet, I also noted the amount of interest these types of loans had and when they came out of deferment (a period after you graduate when you are not expected to start repaying your loans). Yes, my student loan debt is almost $150,000. And that’s before interest.
The second screenshot is a look at the loans broken down per semester. Typically, the loans you receive for the year are cut in half per semester. Half the loan for the fall semester and half for the spring. You can see in the second photo that the amount of some of my loans gradually increased and that’s because my college would raise tuition every year. It sucks, but that is pretty normal for college and universities to do. I am a VERY type-A person so making my excel sheet this way helps me to see where all the money was going. This might not make any sense and something might work better for you, that’s okay. I am just sharing what works for me 🙂
As I said, I would continue to make this document as updated as I could. I would take the few hours every few months and check myself to make sure I had a good understanding of what I was going to graduate with debt wise. At one point, my entire family sat down and had what we called a “student loan viewing party” where we talked through our debt and what belonged to who. It sounds really depressing, but it was actually quiet entertaining. I live in the mindset of if you aren’t laughing you are crying, so even with something so intimidating and scary as student debt, I always try and make light of it all. Because seriously, I would be crying if I didn’t.
So all of this backstory and explanation leads me to now. How am I dealing with all of this now that I am a graduate and my deferment period is quickly coming to an end. Well, I am planned and ready to attack it head on. I did what I had been doing all through school, but with a different objective: to figure out my monthly repayment and how to make it manageable for me.
If you are someone with student loans, you will (or would have already) gone through something called “Exit Counseling”. It is an online webinar that you have to take in order to graduate must places and it essentially breaks down how you will repay your loans, when your loans come out of deferment, who you will be making payments to, and more. PAY ATTENTION DURING THIS! I did not and had to do it again…oops. Take notes during it, write down the important stuff, you will face it again.
After getting through the summer I had and FINALLY figuring out what I was going to do to make money to put towards said loans, I sat down with myself (I have a lot of these, clearly) and looked at what my monthly payments would be as soon as they came out of deferment. I had two big goals before this date: 1) pay off my credit card bill. I knew I wanted this COMPLETELY paid off before touching my student loans because one form of debt is more manageable than two. The second goal I had was to pay off all the accrued interest from a type of loan before they came out of deferment. And you know what? I accomplished both of those things! It took a lot of dedication and self-control, but it’s totally do-able.
With both of those things tackled, I moved on to getting to the principal of my loans. If you don’t already know, the principal of the loan is the whole amount of money borrowed. Interest is was accrues when the loan is in repayment or isn’t being paid at all. When you are in deferment, some loans will not accrue any interest while others will. It just depends on the loan.
When looking at my monthly payments, my heart sank. One set of loans was $228 a month, another $120 a month, and the Parent PLUS loan would be stealing a little over $500 a month from me. YEP! $500 A MONTH. Scary, right? I might have let that number stress me for a day or two, and then I remembered that I can work these numbers down to make them not so scary.
Here is my number one tip when handling your loans…
Consider making weekly or daily payments instead of one giant payment at the end of the month. I took all my monthly payments and broke them down into monthly, weekly, and daily payments. Yes, daily. I don’t do this as it didn’t feel comfortable to me but it is nice to see the smaller number versus the big one. These numbers are written down on a piece of paper that hangs from my wire rack behind my desk so I see it every. single. day. I decided to make weekly payments on all of my loans to make them more manageable for me and my lifestyle.
Then, every week when I get paid, the first thing I do is make these payments. Seriously, I wake up, sit down at my laptop, and log in to my accounts and make my payments. Once I do, I track it in my budget spreadsheet so I can keep tabs on how much I have paid so far. Each week, I get this feeling of satisfaction watching the big number get smaller. I take so much pride in the fact that I am doing this, repaying these loans, all on my own. It is so satisfying, I swear.
Another big thing I am doing to pay my loans off ASAP is putting as much money as possible towards them. When Monday rolls around, after buying groceries and paying other bills, I put more money towards them. I leave myself enough money in case of an emergency but I don’t spend money on things unless I absolutely need them. I don’t shop that often, if at all, and I don’t spend money on food unless it’s groceries. Currently, the only saving I am doing is for our wedding and that’s it. I see putting as much money towards my student loans as the best place for my money right now, so I am sticking to them. If you don’t think you can not shop, try for a month and you might be surprised how much money you save.
The last thing I do in order to conquer my loans is I track every dollar I come into contact with. What comes in, what goes out. I have a spreadsheet for every month and each month is divided into spending, income, and budget. At the start of each month I budget for the entire month and account for new bills, my pet’s grooming, any new payment I will have to make, and calculate how much I have to make in a month to get by. Then, every transaction I make gets tracked on my spending spreadsheet. I list the dollar amount and where I spent that money next to it. Some categories I have are food, groceries, gas, shopping, pets, rent, etc. There are apps who can do this for you, but I prefer I do it because it holds me more accountable. Finally, I have a sheet for my monthly income. I technically work three jobs so it is super important I keep track of my income for tax purposes. I also include any money given to me in this sheet, as it is a form of income to me. Then, at the end of the month I see how I did with spending compared to my budget and income. I am not perfect, some months are better than others, but doing this is SO HELPFUL to be a financially responsible person.
And that’s what I am doing to tackle my student loans. Again, I am not an expert. An expert might see this and tell me this is the dumbest way to go about it, but it works for me and it helps me understand all of it. If you also have student loans like me and have any fun tips, leave them below! I would love to hear them!