This is my third of many articles pertaining to financial matters, particularly MY financial situation. Like most finance-related articles I find on the internet, I’m going to preface mine by saying that nothing I write here is an endorsement of some product, nor should you take it as sound financial advice of any sort. Heck, I’m learning about money for myself, just sharing with you what I think I’m learning, and it might not even be enough information for you to try to imitate me, let alone do so successfully.
In my last financial post I talked about savings. Prior to that I wrote about budgeting. During the months since I wrote on these two issues I have gained quite a bit from increased, personal financial awareness. Until these last two months I followed my budget pretty well (March and April had extenuating circumstances I knew would make budgeting difficult), and my savings have grown. However, I’ve thrown a wrench into the equation (actually, two, but the second one is for another time).
Not exactly a wrench. More like another gear in the clock. See, my everyday fund holds lots more money than I’ve needed any month so far, and it was growing, sitting there asking to be spent. It wants to be spent, craves to belong to somebody else. I don’t like that. Disloyal money is an enemy, creates bad habits, and eventually leads a person to live above their means.
Story time: During my days in college I listened to those who had more financial experience than me: “take out subsidized loans because the interest rates are so low right now that it’s practically like free money.” In hindsight I realize, yes it’s like free money that you have to pay back for a whole lot more than “free.” In other words, not free. I saw many others around me get caught up in that belief, assuming their elders knew what they were talking about. The thing is, that money does you no good while you’re learning how to manage money and it teaches living above one’s means. Shocker. Paying off that money may build credit, but you can build credit through productive means instead.
Rather than send an additional amount to savings, I decided to do something else: expedite the paying off my student loans. I’d already been paying above my monthly requirement, but I did some calculations with calculators on Provident Living and found that if I simply channel more income to loans, I can pay them off in 2 1/2 years. The amount of money required to do this is about how much by which my everyday savings was increasing per month, a nice “coincidence.”
Plus a tax refund. I decided to put one-third of that towards my loans as well. “Good debt” is okay, but debt is a cloud hanging over you no matter how good it is. The sooner you pay it off, the sooner you can rest easy.