Brian Brandow says he stumbled through his 20s and 30s, never having a plan for his finances. He ended up in $109,000 in debt by constantly overspending on vacations, food and entertainment for himself and his family.
“We finally hit rock bottom when our debt was causing stress and fights in our family,” Brandow says.
The blogger behind Debt Disciple now shares how he eliminated his six-figure debt in 50 months (and how you can do the same). He also shares advice for parents and college students borrowing student loans as well as those dealing with student loan debt.
How He Eliminated Debt
Brian and his family’s first step in eliminating debt was educating themselves on personal finance. “We knew we had to find a better way of managing our money,” he says.
Brian and his family created a budget and stuck to it. He chose to pay down debt using the debt snowball method, which applied any extra money to his smallest debt first.
The family gave up items that were a “want” instead of a “need,” such as satellite radio. They stopped eating out and eliminated fast food runs, and instead cooked at home. They had to say no to events with family and friends, if it wasn’t in the budget.
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What People Need to Know About Student Loans
Brian recommends parents and their kids talking about student loans as soon as possible. “I believe it starts in the home with a conversation between parents and children,” he says.
He says it’s important for both parents and students to know the goal should be to graduate college with as little student loan debt as possible.
Brian suggests understanding the return on investment (ROI) of a degree, what the total cost of college will be, what they will be paid when graduating and the number of potential jobs in their career choice.
“Having this information might help prevent spending $120,000 on a degree that produces a $50K job per year and living in debt for years,” he says. Brian, and many other experts, recommend having a total student loan debt of no more than what you expect your first year’s salary to be.
Specifically, to parents, Brian warns not to sacrifice their own financial future to pay for college. “You need to find a balance and make sure your financial future is set first.
Dealing with Student Loan Debt
Hopefully Brian’s story of tackling his six-figure debt in 50 months can be inspiration to those dealing with student loan debt. The blogger says that if you have graduated with student loan debt, make it a priority to pay it off. He says continue to live below your means.
On his blog, Brian says one of the first steps in getting out of student loan debt, or any debt, is to figure out how much you owe. This includes the total amount owed on each loan, the interest rate, minimum payment and due date.
One main thing to do when paying off student loan debt, is stop taking on any new debt, such as credit card debt. Having an emergency fund will prevent you from needed to put an unexpected cost on a charge card.
He also points out additional strategies for paying off debt, such as refinancing student loans. Refinancing student loans gives you a new loan at potentially a lower interest rate, which saves money overall. Refinancing student loans can also potentially lower your monthly payment and since it combines multiple loans into one, it could make repayment easier.
“Imagine your future self and money per month without a student loan payment,” he says. “Once your debt is paid off, you will have excess money to save and spend each month.”
Keep in mind that refinancing federal student loans means a loss in many benefits – income-driven repayment plans, any federal forgiveness programs, generous deferment options, a death and disability discharge, and more.
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