Apr 12, 2018

Immediately I noticed that my debt is clocking thousands of dollars, I and my wife sought for ways to clear them off; although, there were ups and downs along the way. Today, we have paid off our $100,000 debt. But there is another challenge – it is one thing to pay off your debt, but it is another to make sure you don’t enter another debt.

Below are the secrets of how I and my wife made sure we never borrowed for our children’s college.

1. Store Up at Least $1,000 Emergency Fund 

Our first step was to start saving for the rainy day, and it took us a year to save up to $1,000 emergency fund. Actually, we planned saving more than that, but there were lots of unexpected expenditures here and there with minimum payments on student loans. Nevertheless, $1,000 is a win for us because we never had savings before. Our streamlined budget enabled us to go this far.

2. Apply Additional Means of Income 

Ramsey once said, “Sometimes you need a bigger shovel (income) to dig yourself out of debt.” I and my wife had to seek for extra jobs to increase our family’s income and this worked perfectly well -  we have progressed from debtors to savers.

Your search for extra jobs may be within your profession. You can contact colleagues, friends, and even people you have not met before, and seek for a way to collaborate with them. Give them lucrative business ideas on how both of you can make more money, and they will buy into it. If you have more than one skill, you can utilize it – just find a way to make extra income.

3. Cut Down Budgets 

Cutting down your budget is very important. For instance, you can cut down your eating budget. When I said cut down eating budget, I didn’t mean to starve yourself or your family or to become malnourished - you can cut your monthly grocery bill. You can still get healthy food with a low-cost budget. Cutting down a $200 monthly feeding bill to $145 will save you $55. At this point, we still have $10,000 to pay on our student loans.

4. Start Paying From Big to Small 

Some people make the mistake of paying their loans from the ones with low-interest rate to the ones with higher interest rate. While this may be good in the short-term, it will not be favorable in the long-term because the higher interest rates will accumulate to be huge debts.

I and my wife started paying our debt from the ones with higher interests rate, and before we knew it, we were done paying off our debt.

The Joy of Paying Off Your Student Loan

You cannot imagine the joy that follows when you pay off your student loan. I can categorically tell you that once you start paying your student loan beyond the minimum, it’s hard to stop, and the excitement that follows is inexplicable.

Changing your family’s financial trajectory and paying off student loans through the opportunities given to you is a thing of joy and blessing; and I thank God that today, I am free from such loans.

I and my wife are seriously working for our children’s college and for our retirement. We will never borrow for our children’s college was our decree. Parenthood is very exciting and full of sacrifices. Our love for our kids inspired us to change our spending lifestyle, which enabled us to pay off our debts and now saving for the rainy day.

Finally, for you to pay off your debts and be free from financial crisis, you have to do lots of sacrifices. If you are afraid to sacrifice today and save yourself from debt, the financial calamity that will befall you will be more severe than the little sacrifice you would have made. The above steps are very simple and you can make it just as I and my family made it.

Procrastination is an enemy of success. Take action now, and you will be glad you did because time flies away. 

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