Getting Out of Debt

[The Emerald Archer]

I'm currently wrapping up my second to last year of college and since I'm about a year away from graduation (if everything works out as planned), I've been thinking a lot about my student loans and total debt that I've accrued, and how it will affect my freedom when I graduate. I was originally planning on doing a third and final internship for my major, but decided that I would rather get a part-time job and work that steadily until graduation. This way I'll have a steady source of income all the way until graduation and even after I graduate while I figure some things out if need be.

My job of choice is a barback/bartender. I have a few mutual friends in my fraternity who have experience bartending and I've been picking their brains lately. They've given me a few pointers on how to get hired and the fact that we're acquainted should help get my foot in the door. I'm currently looking now and hope to be employed within the next few weeks and really learn the job over the summer. I also know the owner of one of the popular college bars near my university, so that's another avenue I could potentially exploit.

Depending on how soon I can get hired and how well I do at the job, I'm hoping to pay off $5-6K on my loans by May 2018. If I can do that it would put me at about $18K in student loans, most of which would be subsidized loans. My major is civil engineering so the pay would be decent, but I feel like I would be limited in flexibility and freedom post-grad. I plan on moving out within the next year and cannot see myself living with my parents any further, especially working a 9-5 job. My goal is to move to a big city of at least 350K+ people and out-of-state.

How have any of you guys that graduated dealt with paying off student debt? Is it better to focus all your efforts to pay off the majority of it within the first year or , or drag it out over 5+ years? I ask because most people around me (family friends/acquaintances) reported finally paying off student loans in their 30s and some late 30s/early 40s. I think that's crazy and can't see myself carrying debt for the next decade+ but that's just me.

 

[Fuck This]

Frequently the interest rate on those Subsidized loans is low. If you have higher interest debt, pay it off first. Credit cards, etc.
Build a good payment history to raise your credit score.

One regret I had from my 18 years in the workforce was that I did not live leaner and actually save some money for Real Estate Down Payment. You can save quite a few points with a lower Debt to Value Ratio (under 70%). Over 30 years that makes a big difference in overall interest expense.

 

[The Emerald Archer]

TwoRocky,

Frequently the interest rate on those Subsidized loans is low. If you have higher interest debt, pay it off first. Credit cards, etc.
Build a good payment history to raise your credit score.

One regret I had from my 18 years in the workforce was that I did not live leaner and actually save some money for Real Estate Down Payment. You can save quite a few points with a lower Debt to Value Ratio (under 70%). Over 30 years that makes a big difference in overall interest expense.

Nope, no other debt just student loans and most if it is subsidized. I'm not familiar with Real Estate Down Payment and Debt to Value Ratio what are those exactly and how do they impact student loan debt?

 

[Mr.Rob]

The Emerald Archer,

I've never personally gotten out of debt before but I have met more than a few people who have successfully gotten out of debt by following Dave Ramsey's financial plan. He's been helping people get out of debt for 20+ years now.

I'd call in to his radio show, tell him your situation/plan, and see what direction he points you in. https://www.daveramsey.com/ I think the number to call into the program is 888-825-5225 and you have to call into the show between 1-3 Central time in America.

The call is free so it wouldn't hurt to give it a go.

Hope it helps man.

-Rob

 

[The Emerald Archer]

I've never personally gotten out of debt before but I have met more than a few people who have successfully gotten out of debt by following Dave Ramsey's financial plan. He's been helping people get out of debt for 20+ years now.

I'd call in to his radio show, tell him your situation/plan, and see what direction he points you in. https://www.daveramsey.com/ I think the number to call into the program is 888-825-5225 and you have to call into the show between 1-3 Central time in America.

The call is free so it wouldn't hurt to give it a go.

Hope it helps man.

You know, I was having this same discussion with a co-worker towards the end of last summer when I did my internships. He said that course helped him and his wife get their finances together right after they got married (he's 28 now and got married right after college) and he offered to lend it to me, and I foolishly declined haha.

I'll definitely have to check out his plan now, and thanks for the suggestion about calling in that sounds like fun. I'll update this thread after I call in within the next few days. I appreciate the advice Mr. Rob.

 

[Fuck This]

Ther Dave Ramsey recommendation is great. He has a good step by step solution on his web page...



https://www.daveramsey.com/blog/get-out ... =ZG0482399


List all debts but the house in order. The smallest balance should be your number one priority. Don't worry about interest rates unless two debts have similar payoffs. If that's the case, then list the higher interest rate debt first.

This step will make a huge difference in your everyday life. You'll use the debt snowball to knock out your debts one by one, from smallest to largest. Pay off the first one. Then add what you were paying on it to the next debt and start attacking it. When you start knocking off the easier debts, you'll see results and stay motivated to dump your debt. As each debt is paid off, your cash flow will increase and the bigger debts will be gone sooner than you think. Before you know it, you're debt-free!

 

[Parkour]

I can confirm the debt snowball works.
I got out of debt with a simple idea, find a way to make more money. I used spreadsheets to keep track of subscriptions bills expenses and all of my debt. Looked at total monthly interest being paid and focused on KPIs to track progress. Compared my situation after months to see how I was tracking. Just seeing consumer debt numbers go down and interest numbers go down was enough to stay motivated.
I kept the make more money goal in mind and went after raises and opportunities or took on side work of any kind until I had more momentum. I did things they would recommend against like used 401k early just to clear out debt. Once I got to the point where I had no credit card debt, no car loan, and all of my student loans were doing well my credit rating soared and that momentum built financial confidence.
I lived within my means, hustled, and eventually made way more than I needed to that it didn't matter if I prioritized convenience over frugality, I was always ahead. Now that I have a company I keep my salary reasonable and put almost all distributions into investments like rental properties. Hope this helps.
PK

 

[BetaBoy]

Look up credit of assent. It allows you to settle with a creditor for less than you owe.