Apologize I have not posted any blog since October. Life have been hectic and stressful for my partner and I with our new house. We finally close in on our brand new home in February, woohoo. It's definitely a dream come true to finally live in a place we can call our home with no fear of increasing rents. Mortgage are consistent or can only go down while rents go up (assuming you maintain your minimum or pay more to principal and you're not on variable rate). I might post a blog on house budgeting sometime later since there's a lot to talk about there as well but for today, I want to focus on student loans.
I never had to deal with student loans since I hate being in debt. The only debt I ever carried was a home mortgage and a car loan that I paid off as fast as I could. As I get more and more new clients, I see almost all of them have student loans (on top of other debts). It makes me sad that after getting a good education, most of them will almost always have a 6 figure student loan debt and their net worth will be negative for awhile till the debts are paid off. I also realize a lot of them don't understand their debts. The companies loaning them money do not really care about helping them get out of debt. They sometimes make things very complicated so you will stay in debt. Below are some things I've learned and advices I'd like to give to people who have student loans.
First, even if they say there's no minimum or it's deferred, you usually will have a minimum, please find out how much interest you accrue per month and at least pay that at a minimum otherwise your principal will keep growing with the added interest. Your student loan is just going to keep growing and growing and you might not be able to afford the monthly payment later. If it's deferred but interest is still accruing, you have to pay the interest at a minimum if your goal is to get out of debt.
Second, the only way to be able to pay down debt is to get to a positive cash flow per month. There is no way we can move on to your other financial goal if you don't get a handle on your day to day spending. Yes, I get it, we want to live a certain lifestyle but if you will stay in debt forever due to negative cash flow per month. How and when will you attain financial freedom?
Lastly, I found two links that talks about student loans that I find interesting
https://www.ted.com/talks/sajay_samuel_how_college_loans_exploit_students_for_profit
http://www.daveramsey.com/blog/9-lies-college-student-loans
Remember, you don't have to be alone to tackle student debts or any other debts yourself. Please reach out to me (http://www.tehfinancialcoaching.com/contact.html) to set up a complimentary session and we can chat more about your financial situation and how I can help you. I am passionate about helping people navigate through their finances so they can live financially stress free.
Christine
I never had to deal with student loans since I hate being in debt. The only debt I ever carried was a home mortgage and a car loan that I paid off as fast as I could. As I get more and more new clients, I see almost all of them have student loans (on top of other debts). It makes me sad that after getting a good education, most of them will almost always have a 6 figure student loan debt and their net worth will be negative for awhile till the debts are paid off. I also realize a lot of them don't understand their debts. The companies loaning them money do not really care about helping them get out of debt. They sometimes make things very complicated so you will stay in debt. Below are some things I've learned and advices I'd like to give to people who have student loans.
First, even if they say there's no minimum or it's deferred, you usually will have a minimum, please find out how much interest you accrue per month and at least pay that at a minimum otherwise your principal will keep growing with the added interest. Your student loan is just going to keep growing and growing and you might not be able to afford the monthly payment later. If it's deferred but interest is still accruing, you have to pay the interest at a minimum if your goal is to get out of debt.
Second, the only way to be able to pay down debt is to get to a positive cash flow per month. There is no way we can move on to your other financial goal if you don't get a handle on your day to day spending. Yes, I get it, we want to live a certain lifestyle but if you will stay in debt forever due to negative cash flow per month. How and when will you attain financial freedom?
Lastly, I found two links that talks about student loans that I find interesting
https://www.ted.com/talks/sajay_samuel_how_college_loans_exploit_students_for_profit
http://www.daveramsey.com/blog/9-lies-college-student-loans
Remember, you don't have to be alone to tackle student debts or any other debts yourself. Please reach out to me (http://www.tehfinancialcoaching.com/contact.html) to set up a complimentary session and we can chat more about your financial situation and how I can help you. I am passionate about helping people navigate through their finances so they can live financially stress free.
Christine
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