Tag Archives: debt

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You Have A Debt Problem

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If you have debt, you have a debt problem. Most people don’t believe this. They feel even if they have debt, so long as they are managing it appropriately, it’s not a problem. I’m not talking about careless people that only make the minimum payments on everything they owe, I mean the dedicated, want-to-get-debt-free people that are diligently putting 15%+ of their net income towards their balance owing. They have a debt problem. Why? Because all debt is a problem. If you don’t think debt is a problem, you’re in denial or you’re not in debt. Having debt should feel like your hair is on fire. Mr. Money Mustache even says your debt is an emergency. Most people don’t think of debt as an urgent issue, because they only think of it in the context of its balance and interest rate. This means the conversation in their head kind of goes something like, […]

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Personalize Your Debt and Pay It Off Faster

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Do you have a ridiculous amount of debt that doesn’t seem to be anything but a soul-crushing number you grudgingly throw a few hundred dollars at each month? I feel you, friend. When I had $20,000+ of student loans, it appeared to be little more than a big fat bill from the government. But YOU racked up your debt buying something. Why not remember what that was? To cope with my own balance, I allocated every penny of my student loan debt to the recorded costs of my education. This isn’t a crazy strategy. In fact, going back and figuring out exactly what every dollar of my debt bought helped me both to accept it and to pay it off faster. If you’ve been reading Money After Graduation for a few years, you might remember me writing posts like “financially I’m still in my first year of university” because I was […]

I’ve made over $5,000 in extra payments towards my student loans

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While I regularly keep track of how much I put towards my student loans, I sat down recently to calculate how much I was actually required to pay. My student loans entered repayment in March 2012, but I’ve been throwing money at them since September 2011. The result? I’ve paid nearly $5,000 more than I had to: um.. wow! I spend so much time looking at how much further I have to go ($15,000+! GAH!) that it’s easy to forget how far I’ve come. Five thousand dollars is a lot of money, and to think it’s money I could have spent instead of put towards debt makes me feel just a little bit proud of the self-discipline it took NOT to go on a spending spree. I mean, let’s be real here: there’s a lot things I would love to buy for $5,000. Another 3+ week European vacation. A new […]

Student loans: killin’ it

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Ok, I’m getting the hang of this debt pay-off thing. My first student loan payment of $208.48 was due March 31, 2012 and I managed to slip in $4,200 (some of it got eaten up by interest, but I swear to you, $4,200 went in!). Given that such a substantial number of graduates miss a payment or default on student loans, the government is probably like, “what the hell??” when they look up my account. That’s right, government! And I’m not done yet!! I’m feeling really great because paying down my loans means I’ve significantly reduced the amount of interest I’m being charged. I know this because I’m a spreadsheet-oholic, and I track it: Sometimes I find it easier to measure my progress in non-monetary terms. To get some perspective: My student loans cost me less per day than a Starbucks coffee! This is a big change from 6 months ago […]

All debt is bad, but can you have too much credit?

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I used to be a huge airmiles accumulator. I shopped regularly at sponsors (namely, Safeway, where I bought most of my groceries) and used an airmiles credit card to get even more points. I actually got enough airmiles to buy a KitchenAid mixer. However, when my accumulation rate dwindled and I learned the cash value of airmiles — less than 1%! — I decided to switch to a cash-back credit card. I redeemed my remaining airmiles for Banana Republic gift cards and closed my airmiles Mastercard account. I thought about keeping the credit card, but what did I need 3 credit cards for? It had the shortest credit history and the lowest limit, so I couldn’t think of any reason to keep the account open. After I closed it, my eyes then turned to my line of credit. Should I close that too? What about all the other kinds of credit […]