How To Pay Off Your Student Loans

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In this Powerpoint, we share a method for paying off your student loans. This is probably one of the most common questions that we get in our Financial Building Blocks classes or when I talk with people about student loans, "What do I do if I already have student loan debt?"

Transcript of How To Pay Off Your Student Loans

  • 1. What you need to know about getting out of student loan debt as quickly as possible. Josh Lawson How to Pay Off Your Student Loans

2. Contents 1.3 Ground Rules / 3 2.5 Steps To Paying Off Your Student Loans / 8 3.Quick Calculations / 14 4.Should I Consolidate / 15 How to Pay Off Your Student Loans 2 3. 3 Ground Rules How to Pay Off Your Student Loans 3 4. 3 Ground Rules 1. There is no Silver Bullet 2. Sacrifice is King 3. Do Whatever It Takes How to Pay Off Your Student Loans 4 5. 3 Ground Rules 1. There Is No Silver Bullet Too often people want a quick fix for their student loan debt. At the very beginning of this process, you have to come to terms with the fact that there is no silver bullet that will solve your problems. You will have to do what it takes to get out of debt and there is no one that will save you. That is an entitled, spoiled-brat mentality and if you keep it up, you will be in debt forever. How to Pay Off Your Student Loans 5 6. 3 Ground Rules 2. Sacrifice Is King In order to get to do the things that you love, you will have to do the things that you hate. In the case of your student loans, in order to get to the point where you can do what you love to do with your money, you will have to do what you hate for a time. And for this season of paying off your loans, you will have to tell yourself no a gazillion times. Practice with me, No, you cant have that right now because you have a mountain of student loan debt. How to Pay Off Your Student Loans 6 7. 3 Ground Rules 3. Do Whatever It Takes What would you do if you had been taken captive as a prisoner of war? Think about it. You would be absolutely desperate for freedom. Each day you would be thinking and brainstorming of ways to get free. If someone told you to run 200 miles to get free, youd do it. Right now, you are a prisoner of your student loan debt. It is keeping you back from your dreams and hopes for the future, so you have to choose to do whatever it takes to get free! How to Pay Off Your Student Loans 7 8. 5 Steps To Paying Off Your Student Loans How to Pay Off Your Student Loans 8 9. 5 Steps to Paying off Your Loans 1. Stop Getting Into Debt If you are currently in school, stop taking out loans. If you are out of school, dont sign yourself up for a bunch of debt. You dont need that new car, house, sofa, or boat. You are in a hole of debt, so you have to stop digging. How to Pay Off Your Student Loans 9 10. 5 Steps to Paying off Your Loans 2. Get on a Budget I know what youre thinking, budgets are for old dudes who like pocket protectors. Well, that may be true, but its the only way that you can know how much money you have to pay down you debt each month. You can download a budget to help you get started here: financesrestored.com/resources How to Pay Off Your Student Loans 10 11. 5 Steps to Paying off Your Loans 3. Get on a Good Paying Job If you think that you are going to pay off $40,000 of debt by making $10 per hour, then you have lost your mind. Believe in yourself and go out and get a great job. Start by networking with people you know and find a job that you can actually start paying down your debt. A great resource to help you find that job is Dan Millers 48 Days to the Work You Love How to Pay Off Your Student Loans 11 12. 5 Steps to Paying off Your Loans 4. Establish An Emergency Fund Before you get started attacking your student loans, set aside a small emergency fund of $1,000 to keep you from going into debt when an emergency happens. This fund is only for emergencies. Dont use this money for that gorgeous purse or sweet laptop. This is for emergencies only, thus the name Emergency Fund. How to Pay Off Your Student Loans 12 13. 5 Steps to Paying off Your Loans 5. Start with the Smallest Now its time to start paying down your loans, but dont start with the $60,000 one first. That would be a pretty depressing process. Start with the smallest loan and build up some momentum. Then go to the next one, then the next, until you are finally debt free. The key with this method is to take your payments from the paid-off loan(s) and add it to the next loan. Dont spend this money! How to Pay Off Your Student Loans 13 14. Quick Calculations When you are starting out, set an ideal timeline for your payoff. That will give you an idea of what kind of lifestyle you need to live and what type of job you need to have. For example: If you want to be out of debt in 3 years and you have $30,000 in debt, you will need to pay $10,000 in debt. If you are making $40,000 a year, then you will need to be living on $30,000. How to Pay Off Your Student Loans 14 15. Should I Consolidate? How to Pay Off Your Student Loans 15 16. Should I Consolidate? Here are some simple rules to follow: 1) You can only consolidate once, so do it when interest rates are low. 2) Only consolidate to a fixed rate. Stay away from variable rates. 3) Only consolidate if your aggregate of all your interest rates is lower. 4) Do not consolidate you and your spouses loans. 5) Do not mix private and public student loans. Some people prefer not to consolidate and stick with paying them off one-by-one instead of facing one large mountain. The key is to simply pay them off of fast as you can whether you consolidate or not. How to Pay Off Your Student Loans 16 17. Conclusion The key to getting out of debt as soon as possible is desperation. If you are desperate to get free, you will do whatever it takes to get you there. Choose now to not just make a plan, but to actually follow through with your plan. The path to freedom will not be easy, but it will be worth it. The process may take a few years, and you will have to sacrifice sleep, fun, and other luxuries, but you will be free! How to Pay Off Your Student Loans 17 18. Worksheets Personal Cash Flow Form Business Cash Flow Forms Retirement Projections Forms Other Calculators http://www.financesrestored.com/calculators.html How to Pay Off Your Student Loans 18 19. Author Bio and Contact Information Josh Lawson serves as the director of Community Engagement at Antioch Community Church in Waco, Texas. He is passionate about seeing families set free from the burden of debt and financial stress, so that they are free to walk in the freedom that Christ has for them. In the past several years, he and his team have seen over 500 families go through their financial classes and several hundred families have received one-on-one financial coaching. If you are interested in inviting Josh to speak to your group, please connect through our website at FinancesRestored.com How to Pay Off Your Student Loans 19 20. Share this e-Book with Others! How to Pay Off Your Student Loans 20 21. For More Information Visit: www.financesrestored.com Budgets, Forums, Helpful Blog Articles, An All Around Great Time How to Pay Off Your Student Loans 21