January 28, 2022 marked my one year anniversary of paying off my student loans . Reflecting back on choosing to pay off my student loans leaves me with several take a ways that I want to share with you! In September 2020 I decided to become debt free by utilizing the debt snowball method to pay off all my debt. Before this I had struggled to save and really understand basic financial principles. As a first-generation college student, I received a scholarship to attend undergrad for free, but the scholarship did not cover summers. During the summers I took out student loans to cover costs without paying interest rates or how much I was taking out. By the end of undergrad I had amassed a little under $17K. Fast forward to graduate school I received another scholarship that covered my education. At the time I was a teacher in a new very expensive city and I had missed the cutoff to have my paycheck last me throughout the summer. So, I decided to take out a loan for two summers to keep
(This is a thumbnail of my Adult Daily Living Skills: Budgeting YouTube video"
Over the last few months I’ve made a decision to become better with my finances. I'd gotten tired of getting paid only to portion out most of it to monthly payments towards my debt and not even having enough to cover the things I actually needed. Soon after I heard about a guy named Dave Ramsey on Instagram. Browsing through his social media I saw people paying off crazy amounts of debt that were much larger than mine and I decided to do the same. I started this journey with taking his financial assessment that placed me at step 2 of the infamous “Baby Steps”. In step 2 you are paying off debt using the debt snowball and gaining control of your budget.
(This is a phot of Dave Ramsey's 7 Baby Steps)
I gained control over my budget through the Every Dollar budgeting app and The Envelope Method. The Envelope Method is a budgeting strategy where you build discipline through sticking to your budget by putting cash inside of envelopes . First you create a zero based budget where you portion out every last cent. By the end of your budget there should be nothing left over since every dollar has a purpose. I typically do this at least one week prior to getting paid so I can have time to really focus on my budget. Once my budget is in place and my check has landed I head to the bank with my budget in hand. I give the teller the exact increments of cash that I need and then I place them in my envelopes. Easy right?! This process has helped me tremendously ! Since I have started I not only know where my money is going but I actually have some left over to double my payments towards my debt ! If your interested in learning how I do this check out my YouTube video below for more information.
SUBSCRIBE: Adult Daily Living Skills: Budgeting with the Envelope System
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