Money Tip – Stop Eating Out So Much

October 1, 2014 | Posted in Debt, Money | By

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Also, visit www.250debtchallenge.com to join my debt elimination challenge.

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Money Tip – Review Your Cell Phone Plan

October 1, 2014 | Posted in Debt, Money | By

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Also, visit www.250debtchallenge.com to join my debt elimination challenge.

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How to Pay off Debt Faster – Part 2

May 30, 2014 | Posted in Debt, Finance, Money | By

You can watch part 1 of this video series here -> Click Here for Part #1

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How to Pay off Debt Faster – Part 1

May 30, 2014 | Posted in Debt, Finance, Money | By

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How to pay off $30,000 of student debt in 3 years (via Yahoo Finance)

May 6, 2014 | Posted in Debt, Finance, Student Loans | By

Piggy Banks

– By Hal Bundrick

If you are tired of having student loans hanging over your head, welcome to the crash course for debt elimination. Our syllabus is simple, the course objective has been plainly stated and grading will be based on a pass/fail basis. Let’s begin.

What’s the rush?

You may be wondering why we have defined such a short period of time to pay off a substantial debt. After all, The Institute for College Access & Success says the average student loan balance was $29,400, which is based on the latest data available for the class of 2012. With a supersized debt of that magnitude, you need a lot of time, right? Yes, but a lack of urgency can encourage complacency, and with time the debt will grow even larger.

This may light a fire: Calculate the amount of interest you will pay by only making minimum payments on your student loans. If you can’t put your hands on the statements for your loans, check the National Student Loan Data System to retrieve your loan information.

It’s quite likely you’ll be surprised by the big number you discover. You might even find you’ll be paying as much interest on your loans as the original principal amount.

Putting a short fuse on the debt bomb will inspire a significant financial turnaround. Once you retire the student loans, imagine the boost to your cash flow. You might even feel affluent for a change. With those monthly payments gone, you can focus on buying a home, saving for retirement, paying for a wedding and all the other good things in life. No student loan debt means you can kiss Sallie Mae goodbye. You’ll feel like a different person, with less stress and real financial freedom.

Debt limits options

While the task may seem insurmountable, consider the Harvard University alum who paid off $90,000 in graduate school debt — in seven months. Joe Mihalic is a supply chain manager in Austin, Texas now, but three years ago he was deep in debt and desperate to get out.

“I simply felt an overwhelming feeling of being trapped,” Mihalic, author of “Destroy Student Debt: A Combat Guide to Freedom,” wrote in an email. “I felt that the debt was severely limiting my options, and I realized I would never be truly free unless I became debt-free.”

By committing to a frugal lifestyle and squeezing every bit out of his annual salary, which was less than the balance on the loans, Mihalic accomplished his goal of rapid debt reduction.

“I didn’t start feeling weighed down by my debt until my self-esteem finally reached a level where I didn’t need to constantly spend money to feel good about myself,” he writes. “At that point, the negative feelings associated with my debt were greater than the positive feelings associated with consumption. Only then did I seek out a life of frugality and living below my means.”

A cash budget is key

And consider Jackie Ritz, a Paleo diet aficionado from North Carolina who blogs at ThePaleoMama.com. She and her husband paid off $50,000 worth of debt in 10 months.

“We sat down one night and wrote down all of our debt, including our student loan debt, which was the most baggage,” she wrote in an email. “My husband had carried his student loan debt the past 15 years, and we wondered how long we were going to let that debt keep following along with us. So in order to have financial freedom we knew we were going to have to be more aggressive in paying the student loans down and turn our minimum payments into the maximum amount we could manage in our budget.”

Ritz adds that sticking to a cash budget was the key.

“During this time, we made a budget for all our expenses and used the ‘envelope system’,” she explains. “You place the week’s worth of money in your envelopes and when the cash is out, it’s out! This was probably the hardest part of it all since we were so used to swiping our debit or credit card without even thinking about a budget.”

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Help! I Owe $150K in Student Loans and Make $36K a Year (via yahoo finance)

April 29, 2014 | Posted in Debt, Finance | By

money

By Gerri Detweiler

Money problems can be distressing and depressing. We recently heard from a college graduate who feels overwhelmed by debt:

What can I do about student loans? I owe about $150,000 and only make $36,000. I’m also looking for a new job that hopefully pays more. I feel stuck and miserable. I went to college to better myself but instead of feeling improved, I have this huge burden on my shoulders. All I do is work and pay bills, work and pay bills, work and pay bills. Help me, please!

We asked finance expert and writer (and contributor for Credit.com) Mitchell Weiss about our reader’s plight. Unfortunately the news wasn’t encouraging.

The writer may be entitled to some government-backed repayment plans, such as income-based repayment (IBR) or Pay As You Earn (PAYE) programs. But, Weiss cautioned, those are available only for federal loans; they are not available for private loans. If he works in the public domain, our reader might be eligible for the Public Service Loan Forgiveness Program.

“As far as his/her private loans are concerned, it’ll be case by case with the lenders,” Weiss said in an email. “Just know that any accommodation will come at a price — unpaid interest will be added to the loan balance (this is known as ‘negative amortization’), which will only make matters worse.”

 

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