The following is a guest post Daniel Packer from Sweating the Big Stuff. Be sure to check out his site!
I’m in quite a bit of debt, but it doesn’t really bother me. I know that I won’t be getting out any time soon, but I’m ok with it. I don’t need to worry, I don’t need to make drastic changes to my life, and I don’t need to take a second job. Why?
I Have a Plan
I have a budget and I know that I’ll be paying off this pile of debt for the next few years, but my plan is to have a positive net income in 18 months. If I continue to save and pay off loans at my current rate, I’ll creep into positive territory around July 2011. I am responsible and know that I need to save before I spend, and this has allowed me to tackle my debt slowly but surely. I don’t feel overwhelmed because I know that I will eventually dig my way out of debt. If I stick to my plan, what do I have to be worried about?
I Live a Decent Quality of Life
Since graduating from college in May, I have slowly weaned myself off of my pasta and grilled cheese diet. I spend some money on fun experiences with friends, and eat out occasionally. I am not depriving myself from having fun, and am able to enjoy myself despite being on a strict savings plan. Since I don’t feel like my debt is weighing me down, I don’t stress over it.
I Automatically Save and Pay Off My Loans
I set up my finances to be on auto-pilot. I don’t need to constantly look at my checking account to see if there is enough money to pay the bills. After my paycheck gets deposited, money is automatically transferred to my various accounts – savings, investing, loans, etc. I never really see this money in my checking account and have learned to live on about half of my take-home income. Automatic bill-pay lets me relax while knowing that my bills will be paid on time without even having to push a button.
I Knew What I Was Getting Myself Into
In deciding to go to college, I made a decision to pay for it afterward. These loans average about 2.8%, which is nothing compared to some credit card rates. As the economy improves, the rates will increase, but by the time that happens, I will have cut off a large chunk of the debt. I don’t regret getting myself into this situation, and if I could do it again, I would make the same decisions.
I’ve read a lot about how finances can affect people physically and emotionally, and I know how easy it is to be stressed about our financial situations. There have been times when the simple decision of whether or not to buy a candy bar from CVS has make me stress out. Take time to make a plan and you’ll be able to relax, spend a lot less time worrying about that candy bar, and focus on the things that matter.
That sounds great… how do you begin to plan and organize yourself in the first place?
Figure out what you want, what’s important to you, and what you can cut back on. Once you have goals, just set it all up to work for you so you don’t have to worry every month about when the bills are due.
Daniel´s lastest post ..How to Use a Windfall
I’m on the right track, that’s what I actually do and it works. I’ll be out of debt soon.
Suprised that at 2.8% you would even want to pay it off by YE2011. You are in great shape. I am extremely jealous with my 100k (x2 for fiance) in student loans ):
I wish I had just bought a house or started a business instead of going to college!
I agree that college loans should not be stressed over… The terms are quite well laid out and you have no big suprises… It’s CC debt that can be a real pain in the backside, my interest rates were risen and my debt grew but now I have this under control….
Great post and I love the automated approach.
Forest´s lastest post ..Is P90x a Viable Home Workout For You?
Your titles has “why I don’t stress”…..your first heading is I Have A Plan…that describes people who succeed with money…they have a PLAN. It sounds like you are on the right track.
Ken´s lastest post ..Making Retirement Days Your Best Days
I feel calm just reading this post. I wish I could say I didn’t stress out about my debt, good for you though for having such a solid plan in place. These are the plans that are followed to fruition. Best of wishes to you!
Paul @ Fiscalgeek´s lastest post ..We’re Debt Free!
Good advice, because stress doesn’t help eliminate debt. Usually it just makes it worse. But planning and working hard to do it does work. Sounds like you are on the right track!
2.8% is cheap debt! Cherish it!
Financial Samurai´s lastest post ..Only The Poor or Super Rich Say, “Money Can’t Buy Happiness”