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What My Last Student Loan Payment Felt Like & 7 Strategies Leading Up To It
Thanks Mom, For Parent Plus Student Loan
Though I highly recommend you find a way to fund your schooling without using loans, if you’re struggling to find a way to do this, loans will help you – as they did for me.
I didn’t rush to pay off my student loans – even when I had the money to do it. My priority was to invest. The return is so much better! If I had paid off my student loans at first chance, I would have less money than I do today because of the compound interest I would’ve sacrificed in return to pay off a student loan.
Now, I’m not encouraging anyone to leave their student loan balances alone. On the contrary, keep a watchful eye over your student loan balance, interest rate, and repayment options. And when your loans are in deferment, take advantage of the zero interest and pay those f*ckers down to the ground – while still investing, of course.
Remember: It is not within your future self’s best interest to liquidate your investments or utilize your emergency fund and throw all your funds at your student loans.
What would you do in the case of an emergency? The money you could have used will be blown away and gone forever to the federal government, which is why I took a different approach.
7 Strategies Leading Up To The Final Payoff
1. Stabilize my income
I have spent most of my life as an entrepreneur, which means my income hasn’t always been stable. I found a way to stabilize my income but continue my entrepreneurial endeavors in addition to traditional employment.
2. Invest modestly
Contribute enough to my 401k to get the free money (match) and max out of my ROTH IRA.
3. Build an emergency fund
Before paying off any debts (aside from my last car payment), I built my emergency fund; if I did lose financial stability, I would have a backup plan to help me float.
4. Pay off personal debts
I had minor credit card debt that I utilized to help me float before I obtained my first job out of college. After paying off my car and building my emergency fund, I focused on paying off this debt.
5. Invest Aggressively
Max out ROTH 401k and diversify my other investments.
6. Pay off student loans
When it came to student loans, I always asked myself, what’s the rush?
They’re costing me barely anything with the super low interest. The balances are relatively small, and the money I could use to pay off these loans could be utilized for an investment opportunity that offers more significant returns.
Interestingly enough, as I acquired more resources, I had less drive to pay off my student loans. I really stopped caring, but the one student loan I wanted to eradicate was the one my mother took out in her name because it felt like I owed someone personally, which I hate. I don’t mind owing the bank money every now and then, but owing someone I know is an entirely different feeling.
7. Take financial responsibility
If your parents took out a parent plus loan in their name, be sure you pay it off since it’s your education and not theirs. Take financial responsibility and relinquish that financial burden from your parents. I’m pro-pay-for-your-own-education. You appreciate the experience more and take less for granted.
A Thank You Note For My Mom
The parent plus loan is gone for good. I’ll send any documents I receive if I get any.
Thank you, mom, for believing in my educational aspirations. With your help, I was able to fund my acquisition of three degrees at a quality university.
I’m a full glass of gratitude right now because you made this parent plus loan possible.
You granted me the opportunity to expand my horizons, learn new subjects, meet new people, foster lasting friendships, jumpstart my accidental career in tech, and learn how to budget and manage debt.
I never once thought about abandoning this debt and leaving it in your hands, but I took it upon myself to pay it off since this is my education. I plan for this loan to be the first and last loan I ever need your assistance with!
With Eternal Gratitude,
Your daughter
What The Last Payment Felt Like?
I felt like not making the final payment so that I could put it away in some investments. The only thing I cared about was clearing that loan off my mother’s credit; this is also why I asked her several months prior if she was planning on making any big purchases or using any credit for any upcoming financial applications.
As many of us know, sometimes your credit score drops when you pay off an account. Unfortunately, it’s the game of life; we’re only rewarded when we leave debt accounts open.
A Letter To Parents
Though my mother graciously took out a parent plus loan in her name to help fund my education, I strongly advise against this. If I could do it all over again, I would not have taken a loan out with her name but instead found other means. It takes less pressure off the parents and puts the future of our lives in our hands. It is our education, after all.
11 Lessons: How Parents Can Set Their Kids Up Financially
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.