What Methods Would You Take to Rid Yourself of Student Loan Debt?

Very interesting story.  Could you go to this extreme to pay off debt?  If you have student loans, do
you have a plan (other than making the monthly payments) to pay them off sooner than later? 

Check out this article on a student who lived in a van while he attended Duke University.

Photo: Ken Ilgunas

http://finance.yahoo.com/news/duke-grad-student-secretly-lived-in-a-van-to-escape-loan-debt-194021112.html?page=1

The First Cut is the Deepest

You'll probably hear me say this over and over in this blog.  You MUST face your financial truth.  I'm standing in front of my truth officially as of December.  I consulted a debt management company to help me dig out of the pit of financial hell that I've dug myself into. They are now working with my creditors to pay back my credit debt.  There is no more ducking and dodging the phone calls from bill collectors. No more avoiding opening the bills because of fear of what I already know is the truth - I owe too much damn money to companies.  Essentially, I work for them until it's all paid for.

When you enter into one of these repayment plans you have to document all of your expenses.  Sadly this was the first time, in all of my life of having my own money to spend, that I really accounted for what money came in and what money went out.  I was a little sick to my stomach. How on earth will I find the money to pay these people?

The company I went with to help me fix my mess was Money Management International.  They offer free credit counseling - and that's really the only thing that's free.  This is when you realize that anything of value has a value attached to it somewhere.  After being told is such a delightful way, that I would have these creditors paid off in 36 months, they informed me that there is a $75 application fee and a $40 a month maintenance fee for managing it all.  Honestly, once they got my interest rates lowered, it's still less that I would be paying if I did all of this myself. Add to the fact that I would probably still duck and dodge my creditors to try to seem as though I have money to buy frivolous things for myself such as Chipotle or cocktails.

After making all of these payments, this leaves me with approximately $ 320 per month for gas, groceries, medication, etc.  At first I thought, "How the hell am I going to do this?"  Now, I know how and budgeting has become a buzz word for me. Once you accept things as they are it becomes increasingly easy to live more simply.  If you need to create a budget on your own, there are many online versions available.  Mint.com has a great system that also syncs with your smart phone AND it's free!

While it was scary to take that step and commit to having over $300 a month taken out of my bank account automatically for credit debt (which is utterly ridiculous and I own that). That's not including my student loan payment that is now being repaid in the same manner, to the tune of $512 a month. Then there's the loan payment at $227. It's almost as overwhelming to think about now as it was when I was completing my budget spreadsheet in preparation for my appearance on the Suze Orman Show. ZOINKS!  Over $1000 a month in debt payments! It's painful. Thankfully my car is paid off or I'd be in an even bigger mess!

What steps have you taken to reduce your expenses?

Start a budget with Mint.

Facing My Financial Truth

In 2012 I taped a little show by the name of The Suze Orman Show.   It was the start of something big.  The start of living honestly about my finances.

Going on the show was a whirlwind.  It happened seemingly overnight.  One day I was responding to a tweet from the Suze Orman show that asked for viewers to write in with their story. The next day I was sitting in a studio.  In my email to the show I said, "I'm in so much debt and I have no idea what to do. I bought a house, I have student loan debt and I'm behind on a lot of my bills.  I don't want to be like this when I'm 50!"

What in the hell is about to happen to me?

The producer asked about all of my personal finances. Which was embarrassing on many levels. Having watched Suze raise her voice many time over at people over some of the choices they would make,  I knew I was standing in line to get a Suze Smackdown.  Over the next week I had a few more conversations with the producer about my finances and my story and she informed me that we would be taping within a week! Oy!

This was the start of me living in my financial truth.

When I taped the show I was totally petrified - trying to really be present in the moment. What was TRULY happening to me in front of countless viewers?  You can see for yourself.

Clip of my appearance on The Suze Orman Show

Facing the truth is hard. Especially when someone presents you your truth and you don't recognize it immediately is huge!  When she said that I am almost 40 years old and don't have anything to show for it - that resonated with me like I was in the tower with the bells of Notre Dame!  It felt so totally awkward but on the other hand it felt like such a relief. Now that my truth is out there it's easier to continue living in my truth and be honest with others. When I can't do something I don't. When I want something I recognize it for what it is. A want.  I even have friends that will comment on things I may purchase by saying, "Would Suze approve?"

My truth was made available for the entire world to see. I'm now seeing it, too.  It's time to make a change so here I am.

Let's make 2013 the most financially smart year, ever!

Educate. Empower. Economize.