What Am I Fighting For?
I hate being in debt. Every monthly payment seems so minuscule compared to the principal balance. -$50,000. I’m very eager to be through with debt, but I know, realistically, I’m going to be in it until I’m almost 30. I’m 22, so that’s a long way off. There are still years ahead of me of making monthly payments and scraping together whatever else I can to put towards my debt.
It can be demoralizing to realize just how deep in debt you really are.
It’s helping me to focus on just one debt in particular. Right now, it’s my Stafford loans. All $15,482 of them. It’s still a large number, but at least it’s less than my yearly salary. I’ve chosen do to a “high-interest-first” style snowball rather than a David Ramsey-style one because it works better for my circumstances. My smallest debt is still $11,450, and it doesn’t begin accruing interest until May, so it doesn’t make much sense to pay it off earnestly now. My Stafford loans are already accruing interest, and the Perkins loan is large enough that it would still take about two years to pay off, not soon enough to provide a significant psychological edge over my Stafford loans. Since it’s going to take a long time no matter what I do, I’m preferring the method that’s more mathematically sound.
Still, I hate being in debt. I hate it. It makes me feel so trapped. Like Paid Twice wrote earlier this week, it’s hard to get back to zero. It’s weird realizing that I had a higher net worth when I was a child than I do know. I know my debt helped me to get an education and I’m grateful for the experiences that I had while in college. But college is over now. And I feel like there just isn’t enough money to pay down my debts AND save for retirement AND provide for myself AND save up for the memorable things in life. I know I can find a way to do it, I can find a way to become finacially free, but sometimes it just seems so hopeless. And it isn’t so much that being financially free would improve my material standard of life; no, I’d be as frugal as ever; but that it would improve my psychological standard of life. Instead of paying 30% of my salary towards debt, I would be putting 55% of my salary into my savings. (Of course, that’s just talking about my earnings as they are now. In the future, I could be earning even more money, and thus, saving even more.) I could do the things that I want to with ease.
The thought of financial freedom is the light at the end of the tunnel. To be able to go where I want to, to do what I want to, to be free of the 8-to-5 world and free to pursue my passions full time. In this life, two things I want for myself are to be well-educated and to experience financial freedom. So until the day comes when I send in my last student loan payment and see the balance fall to zero, I will keep fighting. For my freedom and for my life.
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Brooke said,
Wrote on January 5, 2008 @ 5:19 am
Don’t get demoralized! I hope you get there before you know it!
Eden said,
Wrote on January 5, 2008 @ 6:52 am
It’s rough. I can relate. I figure I have in the range of 10-12 years to be debt free, but I am most bothered by my credit card debt which should be paid off this year. Just try to focus on the small victories and don’t spend too much time looking at the big numbers.
alicia said,
Wrote on January 5, 2008 @ 9:45 am
I know how you feel–I just now got my school loans below $45K, and I’m 30.
I can’t tell from this post whether you’re planning to pay ahead on your loans, though in your other post you say you are still saving and investing. I just wanted to encourage you to keep that up. At your age, your absolute best investment is to throw some money toward retirement. Yeah, you’ve got debts. But you’ve also got something else that very few PF bloggers have, and that’s 40 years til retirement. Take advantage of it!
I know that big school loans feel suffocating. When I first graduated, 60% of my take-home went to my minimum payments. But your salary will get higher over the years and that monthly payment won’t seem overwhelming.
It’s taken me a few years to see returns on my investment in my bachelor’s degree, but I’m definitely seeing them now. I’m the only one in my family who went to college. I make five times as much as my dad, six times as much as my mom, and eight times as much as my sister. (My degree is in Ancient Languages, but now I’m a web writer.)
Knowing that this really was a worthwhile investment makes my monthly loan payment much more palatable.
Cheers.
sally said,
Wrote on January 5, 2008 @ 10:50 am
@Alicia: Yep, I’m paying ahead my loans. The set amount I pay per month only covers the minimum payments plus about $30, but any other money I have, like gifts, tax refunds, leftovers at the end of the month, and alternative income, goes towards paying them off.
At the same time, I am saving about $500 a month. I have an emergency fund of $2800 right now, my goal is $3000, so I’ll be able to start putting some of my savings money into a Roth IRA very soon. I guess part of the reason I feel frustrated about my debt is because I could pay them off a lot faster if I weren’t saving for the future so vigilantly. But this way I have a bit of money already saved up by the time I am out of debt.
I’m happy that you’ve been able to find a good job. My degree was in English (though I took Latin in high school and Attic Greek in college, so I sympathize with Ancient languages ^__^), but I took a lot of computer science courses too. That’s the field I’m in right now, so my salary is likely to continue to climb.
@Brooke and Eden: Thank you for the encouragement! ^__^
RaeLynn said,
Wrote on February 2, 2008 @ 1:34 pm
I to was in the situation that most of you are in with debt. After working for Corporate America most of my 42 years and discovering that no matter how many hours I worked, no matter the promotions that I received, I still was not seeing the light at the end of the debt free tunnel. Until, June 2004! My son was hurt very seriously which required me to take off work 3 months to care for him. My District Manager told me that was no problem, take all the time you need! You see, I was the only one that did my job in my State, (so you would think I was indespencible, right)? Well, think again. MY DM had a Store Manager call and let me know a week later that I no longer had a job! Being a single mom of two boys this was devastating news, especially considering my oldest sons injuries. I had to act fast and find something that I could do from home while I was caring for my son. I am happy to say that I was blessed with an incredible opportunity which assisted me in creating a consistent residual income for the past 4 years, an income that has given me financial freedom and time freedom, two things I thought I would never see in my lifetime! I now train and support others in being successful in their own business! It is a blessing! If your interested in creating your own financial and time freedom, check out my website or email me. This is not for everyone, only those who are serious about making a difference in their lives, NOW!
Make it an abundant and joyful day!
RaeLynn