Sunday, August 3, 2014

a milestone

My student loans are paid off.  Whew!  It feels like I'm officially an adult now.  :)  For those counting, I graduated college back in December 2002 so you can do the math on how long I've been paying them off.  And a bigger milestone - we are debt free(except for our house so I guess we're debt almost-free).  Again...I'm feeling like a grown-up now.

Joking aside, it does feel good to pay things off.  I always feel like I've lost a few pounds each time something is paid off.  My student loans, however, have been the item that I've paid on the longest so I feel it's quite a milestone.

My tips for managing your hard-earned cash ~>

  • If you put it on a credit card, make sure you have the money to pay it off right away or within a few months.  People who put things are credit cards and only pay the minimum are do realize you'll basically never get it paid off, right?  And probably will pay double, triple, to quadruple what the original price is.  Mike and I put everything on a credit card(for the cash back bonus) and pay it off every month.
  • Have a direct transfer set up to your savings account.  I transfer money twice a month into my savings account and then I don't touch my savings.  
  • Speaking of savings, make sure you have at minimum 6 months to 1 year of living expenses in case you come across hard times.  This may be $20,000, $40,000, or $100,000 depending on the person/couple but make sure you are making strides to get that amount save or already have that amount saved.  Frankly, it just gives you piece of mind and allows you to not think about or stress about money.
  • Have a retirement savings plan.  Both Mike and I invest in our company retirement...I'm not sure if we have a perfect retirement 'plan' right now(other than travel the world) but we both have significant investments going toward retirement.
  • Spread out bigger expenses, if possible.  For example...Mike and I travel fairly often and we are always looking at splitting up travel expenses when we can.  We're taking a Panama Canal cruise in early 2015 and we've already purchased our plane tickets but haven't booked the cruise or any excursions.  It's nice to spread out the expenses so we aren't paying for every piece of our trip at one time.
  • I would say a budget is something you should have but honestly, we don't have a budget that we write down.  I suppose we keep an outline of our budget in our heads and know where we're spending money but we don't have anything written down. 
  • If you're tight on money, don't buy stupid stuff. (skip the Starbucks, skip the candy, skip the eating out, skip the 12-pack of beer or pop, do you really need that shirt, etc)  When I had my house in Nebraska, things were pretty tight for me.  I would walk around stores and shop but would resist buying anything because things were tight, I knew they were tight, & I knew I had to adjust my spending habits. 
  • It's ok to splurge on big purchases occasionally but make sure you have a plan for how you will pay it off and how long.  If you buy a car or a motorcycle(ahem...Mike!), don't just pay the minimum.  Always pay more than the minimum if you can ~ if it's $15 extra bucks or $500 extra bucks, I recommend always paying a little more.  It'll pay it down faster and it always makes me feel proud of myself.
  • If you have multiple loans or credit card debt, then pay down the debt with the highest interest rate.  One of the reasons my student loans took the longest was because there have been other debt's with a higher interest rate.  Once those were paid off, I started putting $1,200 a month toward my student loans and they were paid off fairly quickly after that.
Those are the tips that work for us.  
So - I'm growing up folks.  My college student loans are paid off at age's to the next chapter!  :)