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Don’t Let Dave Ramsey Kill Your Confidence: Being in Debt doesn’t Mean You’re Stupid.

Since I decided to get a super practical degree in English and go to a private liberal arts school, I ended up with a lot of student loan debt. I loved college, but I’d rather not spend half my income every month for the next 12 years paying it off. And I was lucky. I found a job where I write and get paid a decent amount. If I was making minimum wage, I’d probably not need to be making loan payments, but just keep accumulating interest.

Spending most of my days online, I find a lot of interesting information. I was writing for a client in the debt sector last year and I found a lot of articles about strategies for getting out of debt. Of course, I came across the name Dave Ramsey a lot. Lately, I’ve been coming across the name Suze Orman, who no one seems to like.

Dave Ramsey on the other hand, is very popular. Read the rest of this entry

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Give and Take

This year is already shaping up to be great- I have a lot of fun plans with friends, and some solid plans for paying off my student loans. I’m finally going to see my best friend after over two years of living in far-away states. So far I’ve approached this year organized, motivated, and optimistic.

My main focus in my planning has been paying off my debt without making my life focus “money”. I’m going to lessen miscellaneous expenses, but not at the cost of not spending time with the people I love. I’ll just seek to do so in budget-friendly ways. Read the rest of this entry

52 Week Savings Wrap Up

This last year, I really put a focus on saving money for my student loans. My goal was to pay $5000 on top of my minimum payments. This $5000 was to go to my loan with the highest interest rate.

As a strategy to get me in the habit of saving, I decided to do the 52 week challenge. It went pretty well- I made it until june before saving got difficult. Then, it got really hard to do as a weekly thing. The 52 week thing also wasn’t going to get me anywhere close to my goal of $5,000, so I decided to speed things up. I started putting any extra money from my paycheck toward my savings, but still kept track of the weeks. So when I got paid, I’d look at what week I was at, say, 35. Then I’d see how many weeks I could afford to pay. If I had $150 extra. I’d pay weeks 35-38 for a total of $146. This helped me finish the challenge early, and save some extra money.

As it turns out, I saved about $4000. Not quite my goal, but still pretty great. My goal this year is to pay off that high-interest loan, which has about $6000 left. My strategy is going to be different, based on what I learned this year.

At the beginning of the year, since I was only saving a couple dollars each week, I had a lot of extra spending money, which I spent, since I’d reached my weekly saving goal. But that wasn’t helping me reach my end goal. So this year, instead of having weekly goals, I’m going to make it a race to pay off that loan. The sooner I can do it, the better. This “sprint” method is motivating me to plan ways to get extra income now, rather than waiting til june to get strategic.

As far as how to get extra money, I have three main assets right now:

  • my writing
  • my editing skills
  • my craft-savvy

I tried this year to hire myself out as a freelance editor. I got a couple of jobs, and flaked spectacularly on them. I am still going to try to wrap those up and salvage the situations, but basically it boils down to me not prioritizing my freelance work, meaning (rightfully) unhappy clients.

As I finish up these long-overdue jobs, I’m also going to be submitting my writing to websites that pay for articles. Since most of these are direct-submit or sites you pitch too, I’m more confident I can just get the articles written, and not worry about putting things off and making people unhappy for waiting on me.

I won a pretty cool looking planner in a contest recently, so once that gets here, I plan on jotting down all the sites I’ve bookmarked that I want to submit to. I’ll set out a day to send pitches to all the sites that want them. Then I’ll set out a day to write each article, as well as a day to edit each piece. With this plan laid out, I’m less likely to just let the sites sit as an un-utilized resource.

This year, I’ve finally allowed my crafty side to shine. I’ve done a few great projects (which I’ll be posting pictures of soon), and I recently organized my craft room so that I have a work-space. I have a lot of work I want to do on it- adding shelves, and a bottle-rack for all the bottles I’ve accumulated (most of which will become lamps.)

Most of what I’ve made so far has been as gifts for friends. I’m thinking that I need to make some items that are worthy of sale and start up an Etsy store. I still need to look into how I want to do shipping- and how taxes work, but I definitely think I can get something going. I think I’m going to aim to get 10 items done and ready for sale before I open up a shop. A big item will be the bottle lamps, but I’ve also got some cool ideas for mirrors and other decor.

Anyway, that’s a little bit on how my savings goal went this last year, and my plans for 2015. Thanks for reading, and let me know what savings strategies have worked for you, and also if you have any experience with freelancing productivity tips, or how taxes and Etsy work.

My Debt

Last week I talked about my resolve to pay off my student loans as quickly as possible. I don’t want to be paying over $800 a month for the next 14 years just to pay off my education. I want to be able to save money and travel and that’s just not very realistic with all that money coming out. Luckily, if I pay it off in bigger chunks, I’ll save a lot of money on interest. But before I get into that, I want to go into how I got into debt in the first place.

I’ve never had credit cards. I’ve never overdrawn a bank account. All my debt is student loans (with the exception of a line of credit for car repairs that I’m on track to pay off before interest kicks in).

I went to a small private school in Portland, Oregon. I’m from Idaho, so there was no in-state tuition, but that wouldn’t have applied since the school was private. I graduated four years and had the time of my life. I loved the small classes, the professors who kept me accountable, and the relatively small student body. I chose private school because I didn’t want to fall through the cracks.

From a financial standpoint, it’s smarter to go to an in-state public school. If there is one that has the program you want, I would recommend forcing yourself to have the self-control to keep yourself accountable and not fall through the cracks.

That being said, there’s more to life than money. I don’t know if I would have graduated if I’d gone to a large school, and then any money I had spent, though significantly less, would have been wasted. I also loved going away from home, and having experiences I never would have had otherwise.

So, if you’re set on a small school, or an out-of-state school because you think you’ll enjoy it more, go for it. Just be smart about your finances. I got some scholarships, but mostly just the ones I qualified automatically for. I kept procrastinating on external scholarships until the deadlines were past.

I also didn’t pay off any of the interest that accumulated while I was in school. This is a couple thousand that is now gaining interest, that I could have paid off while still in school. If I had been making payments while in school, I would have had more of a mind about my finances and probably would have saved a lot more.

The main point of all this is that going into debt is easy. And getting out takes a lot of time and effort. So even if you don’t have to make payments for a while, make them anyway. Think about the payments you’ll have to make in the future. Yes, go out and have fun. I wouldn’t trade my college experience for the world. But I still would have loved it if I had eaten out a couple fewer times a month, and been more financially conscious.

So, that’s my debt story. The next post will focus on what I’m currently doing to leverage my current income and save money to pay off my student loans

Resolve

I didn’t make New Year’s Resolutions this year. I’m tired of making goals and then ignoring their existence. New Year’s Resolutions have come to be a pointless activity that almost encourages you to make goals and then break them.

There are a couple of things I’ve decided to dedicate myself to though, and the decision did happen to line up quite nicely with the start of 2014.

Due to the projects I’ve been working on at work, I’ve read a lot about getting out of debt. I’ve read a lot of stories about people who had massive amounts of debt, but managed to get out of it well ahead of schedule. Their strategies are simple, a combination of living frugally to save money, and increasing their income.

While these stories that I’ve found, like Man vs. Debt and Frugal Confessions helped inspire me to really focus on paying off my student loans, they only have so much actionable advice I can follow. This is partially because everyone’s financial situation is different and partially because of the assumptions that a lot of “get out of debt” articles and sites make. Assumptions like:

1. You’re in debt because you have bad spending habits.

2. You have a million things you could cut back on.

3. You have things to sell

My next few posts will be dedicated to outlining my game plan to pay off my student loans as soon as possible. I was going to put it all in this post, but I wrote a lot and it was scattered and teetering on 2000 words before I was even close to done. So I’ve broken it up into the following sections which should be easier to digest:

1. My Debt – All of my debt is student loans, but I could have decreased it by having better financial foresight in college. I’ll go into that a bit.

2. My Savings Plan – A huge part of paying off debt (or even just saving money) is utilizing the funds you already have. I am a huge fan of cutting back on extra costs, but a lot of the advice to do so is either vague or not applicable to me because I don’t have a lot of extras. This post will outline my savings plans for this year.

3. Increasing My Income – I can only do so much with the money I currently make. So this post will focus on my ideas for increasing my income. This will be interesting, because so far in this category, I have a lot of ideas, but no solid plan.

So that will be the beginning of my “get out of debt” story. I’m not going to fully dedicate this blog to this subject, but I will be posting updates along the way, as well as money-saving and earning ideas I come across. And knowing how my life influences my writing, I’m sure a character in at least one story or sketch I post will be struggling with debt.