Tuesday, June 21, 2011
If you know about Dave Ramsey then you know that he calls people "weird" who are getting out of debt or who are debt free. I don't understand how people can think that someone is weird for trying to get out of debt. But I do see how it is normal to have debt. Most people have student loans, car loans, and credit card debt and that is just normal for our society. Well, I guess I am not normal because Hamilton and I have NO credit card debt, NO car payments and we are THROWING money at our student loans to get that stress off of our family! I have already experienced what it is like to have people call me weird and tell me that I should just enjoy life and not worry so much about money. But those people aren't thinking about their future... they are only satisfying their current desire to get what they want. These people don't know how to be content, patient and work hard for what they want. They are like a 3 year old in a store shouting " I WANT IT NOW!!!" and so they get it with DEBT!
When Hamilton and I first got married we took a look at our student loan payments and we about had a heart attack. We called and got them lowered as much as we could in order to just survive, and that still made them a MINIMUM of $400 a month! (Oh but that is "good" debt...right!? STUPID!) So we realized we had to do something or else we would be stuck with $400 student loan payments for 30 years!! So I got into Dave Ramsey and we set aside our $1,000 for our emergency fund and we began our debt snowball!! After that, we really tweaked our budget to perfection. We had every single dollar going somewhere and we controlled our money.... it didn't control us. Then we got all of our loans organized and we listed them from smallest to largest and just began throwing money at them. Money seemed to come out of nowhere once we really stuck to our budget .Then, we decided to quit our jobs and move to Georgia so we threw all of our money into our savings to prepare for the move. That really set us back in our debt snowball but it was worth it! Once we moved to Georgia we were able to pay off Sallie Mae which was $2,625. It was the best feeling EVER!! I did the math, and we only ended up paying $18.00 in interest. Which saved us $544 in interest over the 5 year loan span.
Our current loan is an Ed Financial loan that was originally $2625 and is now $690.97! We expect that loan to be paid off by the end of July... or maybe even sooner!!! Once that loan is gone, we have another one that WAS $4,500 but the interest has made it $5,277 (that includes our payments every month...crazy!) So those are our goals for the immediate future. We have plenty more loans and they only get higher and higher.... trust me.... very very high.
I made a spreadsheet of the loans and calculated how much interest we would pay on all of our loans if we paid them off on their expected dates: $48,887.99 .... in INTEREST!!! So who the crap said that student loan debt is good debt?? Think about if we invest that money! How much could we have in our retirement? Not only could we save, but we could actually enjoy life a lot better. We could go on debt free vacations (which by the way our cruise was paid in cash) and we could have a peaceful future knowing that we don't owe anyone anything.
In conclusion.... I work for a hospital in the Business Office and I help patients out with financial assistance when they can't afford to pay their bills. It is so sad to see these people come in and make a lot of money every month, but yet they still have no money at the end of the month because their car payment is $600 and their house payment is $1,500 and their credit cards are $900... it's ridiculous! On the flip side, there are old people that come in daily seeking assistance because they were not wise with their money and didn't plan for retirement... and living off of social security is a joke! So.... with that being said.... you might think that you need to finance a car or keep your student loan around, but every single cent that you spend on that debt is taking away from you saving for your future and keeping your family from having financial peace. Even if nobody is inspired by this blog, I at least hope it gets people off my back when it comes to my financial decisions. We may not go out to eat when people ask us to, we may not go to the movies, or go on shopping sprees. But we are so happy with the decision to make our future better and we are happy to be called "penny pinchers"
Article on why student loan debt isnt GOOD DEBT