Tackling Student Loans and Credit Card Debt
Hey Taylor - I’m closing in on 30, have a good job, and steadily increasing wages, but I feel like my student debt and credit cards aren’t decreasing at all. What am I doing wrong? - Jim
Hey Jim - Sorry to hear about the debt. Honestly, it’s less about what you’re doing wrong and more about what you aren’t doing right. So many people work hard and make consistent payments, but debt is designed to stick around and hold you back. With that being said, there are two ways to tackle the problem.
1. Consolidate. If you looked into debt consolidation right after college and couldn’t find anything, there may be better options available for you now. A lot of lenders have narrowed their focus to help certain professionals get out from under their student loans and credit cards. For example, Splash Financial helps graduates with consolidation, with a special focus on the medical students who come out of a decade of schooling with upwards of $200,000 in debt. If you compare and contrast the different online lenders, you should be able to find a company with the right financing for you, especially if you’re working steadily and making a good living. If you want to learn more about the basics of consolidation, check out the post on GoFarWithKovar.com.
2. Get aggressive. Once debt reaches a certain tipping point, becoming a significant portion of your overall worth as opposed to a small monthly bill, you have to go above and beyond to take care of it. I know from personal experience that it takes a near Herculean effort to deal with hefty loans, but when you get into the mindset of budgeting, saving, and putting every extra penny toward getting out of debt, it can be done. Start by making a debt management plan - look at all your loans, see which have the biggest balances, which have the highest interest rates, which might be easiest to consolidate, etc. Once you have a plan for how and when you’ll pay off each balance, set a budget that helps you pay as aggressively as possible. Every extra dollar you put toward debt is a few pennies saved on interest, and that effort will lead to huge dividends when you shorten the life of a loan.
Remember, your expenses will always rise to meet your income unless you make a concise effort to not allow it. Be smart and decisive, and you’ll soon see those loans dwindle away until they’re a thing of the past. Good luck!