Hey All! Time for another interview for my Money Talk Series!
Today’s post is from Nicole at Budget Like a Lady, she’s going to tell us how she has managed her student loan debt while raising a family.
Here’s a bit about Nicole before we jump into reading her post:
Nicole knows a thing or two about personal finances – thanks to her MBA in finance. She is a busy wife and mother of two who has experienced her fair share of financial blunders and debt. She encourages women to take their money knowledge to the next level by providing money strategies to the everyday superwoman.
Managing Your Expenses
School is expensive. Kids are expensive. So what do you do when you have to manage these two expensive categories at the same time?
Managing student loan debt while you are raising (or planning to start) a family does not have to be challenging. Your student loan debt can be overwhelming but where does it fit into your finances? Now that you have a family, your financial goals may very well change.
When I was paying off my student loan debt, my husband and I only had one child. Since I was the only one with student loan debt, I felt guilty about having an extra debt obligation in the household.
Daycare was the biggest expense we had; it was more than our mortgage! According to the student loan payoff projection, I still had another four years of monthly payments to Mohela (my student loan creditor). Four years! That was way too long, so I sat down with my husband and figured out a plan to get out of student loan debt.
While we were trying to figure out how to manage my student loan debt and our family expenses at the same time, the same questions kept coming up. Once we answered these questions, things became clearer and our financial goals started to look much more achievable.
These are the questions I asked myself and you should ask yourself too:
Why Do You Want to Pay Off Your Student Debt?
Knowing why you want to pay off your student loan debt will keep you motivated to pay them off.
Do you want more money for family vacations, private school, or extracurricular activities? Find what motivates you and revisit your why every month. The more you see your reasons for getting rid of student loan debt, the better chance you have of reaching your goals.
If you are married/share finances, be sure that you are both on the same page about what financial goals you are trying to achieve. This will help you accomplish your goals together.
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How Much Student Loan Debt Do You Have?
You will be surprised how many people do not know how much they owe in student loans. Most Americans have student loans through various lenders, I know I did.
Figure out how much you owe, current interest rates, and minimum payments. With that information, create a student loan debt repayment plan. I recommend focusing on the smallest debt first.
You can read more about repayment plans on this blog post.
What Other Financial Obligations Do You Have?
Create a realistic plan for your student loan payoff. This is the time to look at all financial obligations, especially if you have children.
Are your big expenses car loans or daycare tuition? Some expenses that are often overlooked are extra school costs such as teacher appreciation week, field trips, book sales, gifts, and annual memberships – so don’t forget to plan for those.
If you have a budget, this part will be easy. If you do not have a budget, read this post to get started on one.
When Do You Want to Pay Off Your Debt?
Setting a deadline for paying off your student loan debt will help keep you motivated. Knowing that there is an end to this madness gives hope that this debt will not last forever.Track your progress and watch your debt decrease. Click To Tweet
Also, set celebration thresholds. An example would be to celebrate every $5000 paid off with a family trip to an ice cream shop (or something much larger if it’s in your scope of celebrating).
Not only will doing this motivate you, but it will get the kids involved too. Soon the kids will be looking forward to the celebratory moments. Think of the kids as your accountability partners.
Believe me, it helps.
Where Do You Want to Be in Five Years?
Talking about the future will put your student loan debt payoff into perspective. Do you still want to be paying off this debt in 5 years? What will be going on in 5 years that will affect your budget? How old will the kids be? Will you have more kids within 5 years?
There is so much to consider for the future and you need to figure out if your student loan payments have a place in that future. If it doesn’t, then you need to figure out how to get rid of them.
Managing student loan debt while raising a family can be challenging, but creating clear goals, plans, and deadlines will make it easier.
What techniques are you using to manage your student loan debt while raising a family?
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