A Few Extra Dollars

Student loans.. quite literally the ball and chain scam that was thrust upon the people that were born in the mid-to-late 80's all the way through today. The idea was to go to college and get some degree that was important however what was pretty fucked up was the amount of manipulation that occurred in terms of propaganda towards not only the students but the parents especially.

Fast forward graduating, getting jobs and all that. The loans are eventually about to become due, unless you'd like to go to school and get more loans and then get further into debt. What a fucking vicious cycle isn't it? What's done is done and I only know that in the future, there hopefully won't be as much predatory lending going on taking advantage of students and their parents at a pivotal point in their life.

I'm in that phase where I am paying back my loans, and although I am incredibly lucky and thankful that I have a good paying job where it's actually possible for me to pay back my loans, it's still a difficult endeavor because of the predatory nature of the process. They demand these insane payments every month so that you can pay it back in 10 years time or less but often times these days, we are barely able to save a few hundred dollars a month from the paychecks and after paying all of the other bills associated with life, owning a property and having a kid. I do know that I'm lucky to be able to afford to save a little bit extra per month so that we have a cushion and emergency fund in case we need it.

All of that information aside, I recently was able to get another job, which sadly these days is necessary even making a good living doing my primary job, and that other job gives us the extra wiggle room that we need in order to be able to do what I know is crucial for my loans: pay them down a little bit faster!

One of the good things that I learned from my parents was that it's always good to be able to add some extra money every month to any type of long-term bill like a car payment, mortgage or in this case student loans. The monthly payment that you send in mostly goes to cover interest on the loan balance which is a load of shit. Never mind the fact that they are also convincing people to consolidate their loans, which is an even more predatory practice these criminals in the banking sector are committing.. that would warrant an entirely different post but I will stick with the theme I've got with this one for now.

I am lucky to have loans separate out into a few different buckets, with most of them totaling a few thousand dollars. In total I am much better off than many other people where I don't have so much student loan debt that I would never be able to pay it off. The different buckets is an important element here because a good way to approach the loans is that you take the smallest loan amount and pay a few dollars extra per month, say 50 or 100$ directly to that loan. This bypasses the monthly payment that would otherwise just chip away at all of the loans but the interest would eat up most of that over time.

Being able to pay that extra per month takes direct hits at the loan and slowly dwindles it down to something more manageable and eventually you will pay it off, thus reducing your overall loan balance of course but also the amount of interest you pay in the long run. This is a huge saving opportunity for the borrower and of course doesn't only apply to student loans but to other types of loans as well.

The extra job that I've got allows me to throw that extra 50$ a month towards one of those loans, I have two that are less than 1,000$ in total so I will attack the smaller of the two first and every time I get a paycheck from the other job, I will take 50$ from it and throw it at one of my loans and 50$ at one of my wife's loans so that we chip away at them until they are gone. We may even take a bit of the tax "refund" that we get back at the end of the tax year and take 1,000$ from that and split it between our two loans and knock them out faster.

This is a strategy that many people have applied to all kinds of loans but we apply to any type of loan that my wife and I have of this magnitude. We add an extra 50$ to our mortgage payment every month so that we knock that down and over the life of the loan, it reduces the years we pay it back by 3 I think, and the amount of money we save is in the thousands by just taking a few dollars we wouldn't normally feel anyway, and add it to the principal balances to get out of debt faster. These are small steps of many in order for us to get out of the vicious debt cycle!