Budgets are a Girl's Best Friend

Loans likely won’t disappear on their own. 

A girl could dream, though. 

So until I win the lottery I pay, pay, and pay those suckers. 

Here is a breakdown of what my month to month looks like for the last year and a half.

Every month I make roughly $2200.

You can see that the majority of my income goes to loans.

At 28, living with your parents is not cool, but it sure is helping me become debt free more quickly. I am blessed with parents who let me live rent free. I know that this is not a possibility for all. I highly recommend living with roommates and paying the least amount of rent as possible. If you own a place or roommates are not a possibility, I recommend cutting costs in other areas. (cutting cable, changing cell phone plans, strict grocery budgets, etc.) 

Car

I have a newer vehicle. I bought it in 2013 brand new and I signed up for payments for 75 months. In retrospect, I know that was not my best option, but at this point in the game, I am keeping it.  I plan on finishing out the payments, and holding onto the car for as long as I can. 

What I wish I would have done, bought a cheaper vehicle, kept my payments under $200, or no payments at all would be even more ideal with an older used car. 

Grocery

I buy my groceries at ALDI. If you don’t know this store, get to know it. I buy breakfast and lunch foods and only what I need. Another perk of living at home, food costs are also low. Again, I know this is not everyone’s reality. I will post more on frugal shopping, ALDI included, in the near the future. 

Credit Card

I really do not have credit card debt. I learned early on in my college career that credit cards are a slippery slope. I do, however, have a Chase Freedom rewards credit card. I charge my bills and some necessities on there (all in the budget) so I can get cash back rewards. Only consider this if you have constraint and you know you won’t charge excessively and unnecessarily. I allocate money in the budget in case of unknown purchases, or rollover balances. Credit card interest rates are typically higher than other interest rates so PLEASE do not abuse credit cards. 

Cell Phone

I have been grandfathered into the holy grail of cell phone packages. I get unlimited data and minutes for $70 bucks. I needed a new phone, so I also pay the $20 lease fee. Not ideal, but it's what I'm working with. If you haven't yet checked, you should google cell phone discounts. There are so many! I was able to get a student rate for having a college email account. You can find discounts for various jobs and unions as well. 

Personal 

Personal care encompasses a lot. It is for my hair, eyebrows, doctor visit co-pays, personal care and hygiene products, clothes (many future posts on shopping) and other personal necessities. This can fluctuate from month to month, but I always budget for it. Budgets are key. If there is excess at the end of the month, GREAT! If not, when the money is gone, it’s gone. 

Entertainment

Notice, my entertainment budget is low. Sucks. But, it’s the price I pay to secure my future. (More to come on frugal entertainment). 

This is another area where if there is excess, great and I carry it over to the next month, or when it’s gone, it’s gone. Also, this is an area where many people can cut costs drastically. 

Gym

I do not have a gym membership. I sometimes take advantage of going for free with family members or friends….okay, I do not actually work out all that much. But, if I did I could budget for $10 a month. $10 is a price many gyms offer for their basic package. I also can work out at home, or in the summer months, I like to run outdoors. There are options. 

Misc.

Miscellaneous is used for possible gifts, coffee (I have an addiction), cheap quick restaurant eats, and anything else. 

Do I ever blow my budget? I would be a liar to say no. But I try really hard to stick to it, and it helps me to stay on track. 

I have money saved in case of an emergency, or if on a rare occasion I go over my budget in a month. I try to take any money that is left each month (which you can tell is often little) to put aside for special occasions, dinners, or anything else that tickles my fancy. 

Anyone and everyone should have some sort of budget. Some have more wiggle room than others. You can download some ready to go budget templates here: Google Budget Templates

How do I plan on paying so much in a few months towards my loan principle? 

Well, any extra money I get goes to my loans. For example, my entire tax return will be applied to my loans. Any extra side hustle money (oh, we will talk side hustles!), and any gift money, etc. 

Also, being a teacher allows me to have summers off. I take advantage of that time off to work a few months for extra income. All of that money gets applied to my loans. Would I rather soak up the sun and hang by the pool, well duh! But, for the next few years, I plan to make that money honey and reach my goal of becoming debt free. 

Know Your Basics

Student Loans. A necessary evil for many students. Know your jargon. 

If you are a college graduate, currently in college, or applying for colleges, you may come across many new and confusing financial terms. Boring, but you can research yourself for a few hours, or read my nutshell versions.

FAFSA
AKA The Free Application for Federal Student Aid
is a form that can be filled out annually by current and future college students for both undergraduate and graduate students. This determines how much federal aid money you will get, which in turn is money that does not have to be paid for school.
More detailed information here.
https://studentaid.ed.gov/sa/fafsa/next-steps/how-calculated

Scholarships/Grants
This is a more common term. Scholarships and grants are awarded money amounts from various locations, that do not have to be paid back. Usually, scholarships take some researching and work on your behalf. You can do a search online for scholarships for almost any area. Examples; sports, academics, heritage, or even something like wearing glasses. Be prepared to write some essays! The more money you have from outside sources such as these, it is less money via loans, and less to be repaid.


Federal Loans 
Funded by the government. The interest rate is fixed and often lower than private loans. You can see the current rates here:
https://studentaid.ed.gov/sa/types/loans/interest-rates
Federal Loans can later qualify for loan forgiveness programs and various repayment plans (more information later).

Unsubsidized Federal 
Your school determines the amount needed
You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods.
Must be enrolled in school half-time or full-time
Most times no co-signer is required. Credit checks are not needed

Subsidized Federal 
Government pays the interest while you are in school
Your school determines the amount needed
Must be enrolled in school half-time or full-time
Most times no co-signer is required. Credit checks are not needed

Private Loans 
(the devil) or given by non-federal lenders like banks and credit unions.
Can be a variable interest rate and determined based on credit and current bank rates (some of mine before were over 10% SICKKKKK)
Requires a credit check. Often need a co-signer
Interest usually begins at the start of the loan

If you already have loans, get to know what types you have. I have both federal and private. My private are the killers (or were…I recently refinanced and they are way more manageable). 

It is important to become best friends with your loan servicer website. I log in a few time a week on Navient and Firstmark. I know my interest rates for each type of loan and I keep them separate when calculating payback amounts. 

I have 44k in private student loans. Those had the worst interest rate. Whenever I have extra money to throw towards more of a loan payment, I pay more towards the higher loans with the higher interest rates. This cuts away at the principal (or actual amount of the loan minus interest). 

26k of my loans are federal. I know that being a teacher I can eventually and hopefully qualify for some special education student loan forgiveness up to 17,500. I can also hopefully get Public Service Loan Forgiveness (more info to come). So, my federal aren’t my first concern and seeing as the interest rates are lower, I am tackling my private much more aggressively.



Coming Next > Money Making Apps and Budgets 

The Beginning of the End

Go to college, they said. Fill out a FAFSA and apply for student loans, they said. 

70% of college students graduate with an average of 37,000 in loans. 

Now, like most other post grads, I am in the midst of a personal financial crisis. Or was. No, I am not debt free. Yes, I am still paying back my student loans. But, I am doing so much more wisely and I can finally see a light at the end of the endless tunnel that is student loans. 

          When making the choice to begin blogging about my financial woes, I realized that I would have to be painfully honest. I would have to publish my income, budget, loan amounts, etc. in order to help others with their student loans. 

So here goes nothing. 

       I am 28 years old and I am a special education teacher in a low-income school district. Making the big bucks, not quite. Backing up, I started by going to a local community college for two years and then transferred to a local (overpriced) private Christian college. My community college was paid for by my parents. The rest was up to me. Hence, taking out student loans. I commuted to school each day so I did not have to take out extra money for room and board. I took out enough in student loans to cover classes and textbook costs. At the time I had no understanding of borrowing money. 
It felt free. SIGH
Interest rates and lender terms meant little to nothing, and I just signed on the dotted line. 

I did not intend to attend the private college for four years. Some community college classes did not transfer, and some medical issues held me there longer than planned. At the point of graduation, my loans had amounted to 60 some thousand dollars. Add interest and some regretted deferments (I'll explain more in future posts) and at the age of 25, I was up to a grand total of $90,000!

      I landed a teaching job not much longer after graduating. I was set to make $39,000 a year. That's when reality sank in. Even if I were to pay my entire salary to my loans for two straight years, I still would not amount to the loan total. Panic ensued, and the financially uneducated version of myself decided to pay as little of my loans as possible.  I did not research, and I saved my money instead. (Saving to start was not such a bad idea, I will also explain that later). 

        
 I am now in my 4th year of teaching. I am employed at the same school I started with, and I am now making $42,000 a year. My loans are currently at $70,000. Side note: many of you will have higher paying jobs. I went into teaching because it's a passion, not for the money. So I plan to stay a teacher regardless of my salary. I am proof you can make it work on any salary.

         You're thinking, you only paid down $20,000?! Why should I follow your blog or listen to anything you have to say? Well, I did not start paying down my loans successfully and in an educated manner until about a year and a half ago. In a year and a half, I have researched loans like crazy, and I have made some excellent moves. I will be debt free in 4 years max, 3 years hopefully.  At the end of this summer I plan to have my loans down to $55k. $15,000 paid in 6 months is the goal, and writing about it will hold me accountable. 

      I plan to share the mistakes I made with paying (and not paying) my student loans. If you do not already know I will give you insight into different types of student loans, and how to manage them differently. I will give frugal living advice, budget plans, refinance options, and so much more. I do not claim to be an expert or professional, but I have become obsessed and quite informed. I am actually living through this loan problem. I am not debt free and out of touch with current student loans. I am real, and honest, and transparent. I have learned that I am not "a-loan" and you shouldn't be either.