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March 17, 2016 · Leave a Comment

The Biggest Mistake I Made With My Student Loans

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Debt Free· Debt Free Tips· Our Journey

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For the last few months I’ve been sharing our monthly debt payments.  I’ve let you in on how we add more money to our payments each month without sacrificing money from other categories, and simple ways that we’ve saved each month.  But I haven’t shared with you what was, by far, the biggest mistake I made when it came to my student loans.

So what was by biggest mistake when it came to our student loans?

biggest mistake student loans

It wasn’t watching my undergraduate loans capitalize interest while I was enrolled in a Master’s Degree program and not making some sort of payment towards the interest.  I understood this would happen.  At the time we were a family of 3 living on less than $10,000 a year, so any money we had went to bills, child care and food.

It wasn’t letting my graduate university constantly switch around my program requirements.  I understood they were revamping the program when I initially enrolled.  From the get-go they had started swapping out things that I was able, and not able, to do.  At the same time, I also knew that I would take more time than usual with my degree and teaching certifications.  I also didn’t need my extended schedule to get in the way of Hubs’ schedule for his degree.

My biggest mistake wasn’t even the fact that a year after Hubs graduated with his degree, we moved 3 hours away from our graduate school and I had to be enrolled in two separate universities just to to finish my degree and teaching certifications.  The two years I spent my days sitting in the car and a classroom, using my credit card to fuel up to get where I needed to be, and my nights as a mom to two young boys or spent at prenatal appointments is a complete blur in my memory.  But that time taught me that I don’t want to miss out any more on my children’s youth than I already had.  No, that’s not my biggest mistake.

My biggest mistake when it came to my student loans was filing for economic hardship for two solid years without making a single payment.  Two years!

I filed for economic hardship at the recommendation of a customer service rep with one of my loan companies.  At the time I filed, our combined income was not enough to cover Hubs’ payments, let alone mine.  Even substituting had become too unpredictable and inconsistent.  I knew I had to pay the loans back, but at the same time, we were stuck income wise.  I couldn’t sign my children up for daycare for a minimum of three days a week to remain on the list, and not work that week.  It didn’t make sense.  I was losing too much money.

During those two years, I was also constantly applying for for full-time employment.  Full-time employment meant it had to cover daycare costs for three children.  It had to cover fuel costs back and forth.  And finally, it had to be enough to make sure there was money left to contribute to our budget.  Full-time employment in my area is hard to come by, but employment that meets those three criteria is even harder to find.

For those two years, my interest capitalized.  Not nearly as much as my undergrad loans capitalized while I was a graduate student, but they capitalized a lot.  Those two years of interest capitalization added over $22,000 to my loan balance.  I was already struggling with not having full-time employment.  Watching that balance rise certainly didn’t help.

During that time, I should have filed for Income Based Repayment rather than Economic Hardship.  Yes, under both cases, interest capitalizes.  But under Income Based we would have been making an effort to pay something on them, whether it was $5 or $50.  Even $5 would be $5 I’m not paying back now.

But without that hindsight, I don’t think we’d be on this path that we’re on.  It may have been my biggest mistake at the time.  But right now, that big mistake is helping to give us the greatest drive to get out of debt.  And in the end, the eye on that prize is all that matters to me.

Did you have any hindsight 20/20 moments in your journey to debt freedom?  I’d love to hear about it in the comments below!

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makingcentsmatter

makingcentsmatter
Only you can determine what your financial goals a Only you can determine what your financial goals are. If that means you're adding money to your savings account, or contributing to your retirement, while you are paying off debt, then so be it!⁠
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Do what looks right for you and your personal finances.⁠
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The trick to meal planning is to make it predictab The trick to meal planning is to make it predictable. But predictable doesn't mean the same thing week to week. You could have a chicken meal, a soup meal, a pasta meal, a leftovers meal, a family favorite meal, and so on.⁠
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We always try to go with themed days, but some weeks are so hectic the theme is literally "fast". Thankfully that hasn't been the case lately.⁠
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#mealplanning #mealplan #budget #budgeting #monthlyincome #savingmoney #savings #cashbudget #cash #cashisking #frugalblogger #frugalmom #frugalliving #financialgoals #personalfinancetips #personalfinance #debtfreejourney #debtfreecommunity #debtfreeprogress #makingcentsmatter #financialfreedom #debtfree
I can only hear about my extended warranty I never I can only hear about my extended warranty I never purchased so many times. 😣⁠
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#makingcentsmatter #budgets #monthlyincome #debtfreecommunity #realbudget #savingmoney #payingoffdebt #savings #frugalliving #frugalblogging #budgeting #monthlyincome #zerobasedbudget #financialgoals #personalfinance #personalfinancetips #financialfreedom
March Debt Paid numbers are in!⁠ .⁠ House: $51 March Debt Paid numbers are in!⁠
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House: $511.13⁠
Citi: $0 – this has a residual $3 in interest charges since payoff, due in April⁠
D NelNet: $100⁠
K NelNet: $100⁠
K Chase: $600⁠
Explorer: $336.27⁠
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Total Paid in 2021: $8,258.84⁠
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Extra Payment: There isn’t one this month since we were $25 away from zeroing out the budget for our February 15th monthly paycheck. That $25, and monies left from our January 15th paycheck, covered our OOP costs for Hubs’ filling. We also have some savings goals coming up that need to be met, making our debt payments a little lower for the time begin.⁠
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#makingcentsmatter #debt #debtfreejourney #debtfreeprogress #debtfreecommunity #realbudget #savingmoney #payingoffdebt #savings #frugalliving #frugalblogging #budgeting #monthlyincome #zerobasedbudget #financialgoals #personalfinance #personalfinancetips #financialfreedom⁠
The battle for who can charge what tonight is abou The battle for who can charge what tonight is about to begin. 😬⁠
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My kids run off with my charger, plug it into one outlet 5 feet from where they found it like that particular outlet is the only one in this house, and then proceed to fight over who can charge their device first at night.⁠
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Then they get grumpy when it's their turn and it's not the proper input cable. #itwasmychargerfirst #dontlikeitgofindyourown⁠
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#parentingteens #parentingtweens #momlife #realife #budget #budgeting #savingmoney #cash #frugalblogger #frugalmom #financialgoals #personalfinancetips #personalfinance #debtfreejourney #debtfreecommunity #debtfreeprogress #makingcentsmatter
A needs his wisdom teeth taken out. I've talked a A needs his wisdom teeth taken out. I've talked a bit in our February Budget Check-In about how much of this I think we'll owe, and you can check that out on my YouTube channel if you're interested, but I wanted to say here...⁠
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To the mother with little kids struggling to get your finances in order, it will get better. I wish I could have heard those words years ago.⁠
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Nearly 10 years ago we were facing a $1,400 out-of-pocket portion for A's Phase 1 orthodontic work (I looked it up after I uploaded the video... we had a $1,400 portion).⁠
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It was a lot of money for us at the time. Our kids were 6, 2, and 3 months old. I don't think we even had $500 in savings, and I just left a part-time teaching job because it wasn't paying the part-time daycare bill, so paying our portion in full was just a dream I didn't think was achievable.⁠
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I was even stressing about the monthly $100 payments. We were so strapped. It was our breaking moment to start cutting costs and budgeting more effectively. We've learned a lot in that time period.⁠
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What we've learned is that it does no good to stress about it all the time. Life happens. All you can do is try to plan ahead, and if it's something that's unplanned, readjust. It won't always be easy, especially at first, but it will be worth it.⁠
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Nearly 10 years later, we are still paying off our debts. Student loans suck. But I see this bill as a reminder of how far we have come. Seeing a bill like this doesn't stress me out like it used to, and I know we can easily create a plan that can get it done and out of the way.⁠
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Will it delay our debt-free date more? Yes. But it's not worth stressing over. Life happens, readjust, and continue on down the path. It's called a journey for a reason.⁠
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It's almost payday! Here's how our variable budget It's almost payday! Here's how our variable budgeting categories are working out for the pay month.⁠
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Food is looking good this far into our paycheck, probably because miscellaneous - which includes eating out - took a hit with unexpected purchases. Pet is low for this time of the month, and Household is spot on.⁠
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Fuel looks like it'll be lower than last month (yay for weeks of snow days & delayed school starts), and Therapy had one more appointment than initially planned.⁠
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Garden, Dental, Medical & Propane are not included in these estimates so far because those expenses are coming from sinking funds. Once we're done with the month and review the budget, I'll move over the total amount spent from those sinking funds.⁠
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How's your paycheck budget coming along?⁠
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#realbudget #monthlyincome #monthlybudget #budget #budgetupdate #budgeting #savingmoney #variablecategories #savingmoney #savings #debtfreecommunity #debtfreejourney #cash #financialgoals #personalfinancetips #personalfinance #frugalliving #frugalblogger #budgetblogger #makingcentsmatter
Automating your finances makes saving money and bu Automating your finances makes saving money and budgeting more convenient, and therefore easier on you. Out of sight, out of mind, right?⁠
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What's one thing you can automate this week to make your finances easier?⁠
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Me? I'm going to set up our sinking fund transfers to automate every payday (the 15th of every month). Our bank set up a feature on their app where we can schedule savings transfers now, and I'm going to take advantage of it!⁠
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#personalfinance #personalfinancetips #budgeting #budgettips #personalfinancemadeeasy #savingmoney #savings #sinkingfunds #cash #frugalblogger #frugalmom #frugalliving #debtfreejourney #debtfreecommunity #debtfreeprogess #financialfreedom #makingcentsmatter
Oh my word... our miscellaneous category has gone Oh my word... our miscellaneous category has gone a smidgen overboard this month!⁠
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I foresee a goal for March's paycheck to at out less than twice. That's where this category went awry. $99.16 of it went to eating out. 😑 Some of it was avoidable, but not all of it. Having to drive to multiple appointments in one day during snow squalls and rearranging our whole day was one of those unavoidable instances.⁠
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Tracking our expenses - much like a budget review - is vital to sticking to your budget!⁠
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#makingcentsmatter #debt #debtfreejourney #debtfreeprogress #debtfreecommunity #realbudget #budgetcategories #monthlyincome #savingmoney #savings #frugalliving #frugalblogging #budgeting #zerobasedbudget #financialgoals #personalfinance #personalfinancetips #financialfreedom #expensetracking #budgetfail
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