Yeah, I know, where are you gonna get the extra $1,658/month to make those huge payments? Well here’s the good news, you only need to do it for 44 months. So it’s worth considering taking some (temporary) extraordinary measures to avoid a lifetime of soul-crushing debt. Here’s one way to do it:
• Drive a cheaper car: +$500/month
• Live in a cheaper house: +$500/month
• Bartend 2 nights/week: +$800/month
Now you’ve got $1,800/month extra. Throw $1,658 toward your evil student loan overlord and just waste the other $142!
Will this exact strategy work for you? I don’t know. It will work for a lot of people. The average new car payment today is $745/month and it’s very possible to drive a reliable used car for $245/month. There’s $500 for the average car loan borrower.
And I’M SURE, you can figure out reasons this won’t work. I can think of 100 too. Schedule, kids, rent prices, inflation, car reliability, the government, the market, taxes, etc. But that shit impacts us all. If you spend all your time rationalizing why it won’t work, that’s what you’ll get. Like Henry Ford said, “Whether you think you can, or you think you can’t – you’re right”.
So yes, student loans are a nightmare and as a society we need to make sweeping changes to the burden we’re putting on the 17 year olds of our nation. But as an individual, if you want to improve your own debt situation, this is how the math works out. The bigger payments you make on those loans, the faster the debt goes away, and the less interest you pay!
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Jeremy
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