Student Debt: How to Lower the Interest Rate Without Refinancing Out of The Loan Forgiveness Program

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Almost a year ago, I wrote about refinancing and leaving IBR for good. We hadn’t refinanced up to that point because we were not sure if we had the frugal muscles and the mental and emotional strength to tackle my student debt, and we knew that refinancing would mean that we could never run back to the Loan Forgiveness Program if we ever hit a rough spot. Once you refinance, you are no longer eligible for the Loan Forgiveness Program. A pro of the Loan Forgiveness Program is the flexibility to revert back to a minimal payment of a small percentage of your income when times are tough. Meanwhile, you also having the choice to pay back the debt aggressively if you are able. If you refinance, well, it’s either you make those whopping payments (which in our case is $6,500 per month) or end up in mad doo-doo if you fail to do so.

After a year of paying back debt aggressively, it was obvious that we were BOTH in it for the long haul! We were ready and capable of getting these loans out of the way. So we said, “SCREW IBR, let’s refinance!” The worst part about IBR is the high interest percent rate of 6.8%, which meant that about half of our monthly payments were going towards interest alone! YUCK. This is the main reason why we wanted out.

We were very serious about the whole thing and even started researching refinance options. The list of lenders that we found included the following:

We got quotes from every lender and were about to pull the trigger, but we didn’t.

Why? By some stroke of luck, we went down the rabbit hole of purchasing our first property and held off on the refinancing of the loans until that was secured. However, once we had settled into our new home, Mr. Debtist’s start-up company went through some tough times and Mr. Debtist’s salary went down by 50%! At the time, this seemed like terrible news, but we were actually lucky in that we hadn’t refinanced yet and life had the opportunity to teach us a lesson: that maybe the flexibility of Loan Forgiveness Program was essential. With a loan this large, the flexibility of the Loan Forgiveness Program makes our journey much more comfortable! Shortly thereafter, I had my third stroke of luck. I spoke with Travis Hornsby of Student Loan Planner. If you have not already interviewed with him and you have a lot of student debt, I would just like to say that although his calls are pricey, they are WORTH it! You’ll soon see why!

In this interview, Travis informed me of a way to improve our aggressive loan repayment strategy. I learned that by being in IBR, we were missing out on an opportunity that another loan forgiveness program offered. Which is why it is important to know the differences between IBR, PAYE, and REPAYE! We learned that REPAYE helps our significantly by covering 50% of our interest every month! Just by switching to REPAYE, we were able to save over $7k in 8 months (find out here).

Since REPAYE covers 50% of  the interest, it is as if we refinanced to get a better interest rate. The interest that we have still yet to cover with our payments come out to be about 3.4% of the loans. I like to think of this as a way to get a lower interest rate while still keeping the flexibility of loan forgiveness. Even though Mr. Debtist’s job situation has  stabilized, we still never know what life may throw our way. Being able to fall back on those small payments give us a lot of peace of mind. Meanwhile, we are able to funnel even more money towards paying down principal!  It’s the best of both worlds.

I think that Travis saved us from making a decision that could put us in a bind during tough times, and he also helped facilitate our loan repayment journey. This is why I think it is so important to talk to someone who can really guide you find the most optimal path for your loan repayment journey, especially when you are talking about student loans this big. If you’ve been thinking about talking to someone but are not sure if it will even help, I bet you Travis is your guy. Schedule your consult with Student Loan Planner if you are feeling lost or simply looking for loan repayment alternatives.

In short, my advice is this. If your student debt is less than two times your salary, then maybe refinancing is a doable option. It won’t be easy, but it would be doable. However, tread with care. If your debt is more than two times your salary, highly consider sticking with Loan Forgiveness, even if you have plans to attack it aggressively. Only because life is a mess and would take any chance it has to throw you a curve ball. Ultimately, I truly believe that everyone can find a path that is in line with their lifestyle and life goals.

When we started, we were told that paying down our loans in ten years with our salaries was impossible. But deep down, I knew that we could do it and that it would be the best path for us. So we set a plan to pay it down in 9 years. Before we talked to Travis, I was hoping to escalate the plan even more and pay it back in less than 9 years. After we made the change to REPAYE, I now have hopes to get rid of it all in 7 years or less. We are implementing a number of side hustles and budgeting tactics that are speeding up progress! I can’t wait to see how much more we could do. Thanks for being here, supporting our journey, and following along. 

 

Feature: How to Manage and Pay Off Multiple Credit Cards with Andrew Rombach

I LOVE credit cards. I think that credit cards are really useful when their perks are used efficiently, in things such as travel hacking for example. We use them frequently to fly to places around the world for free. However, my relationship with credit cards wasn’t always good. In fact, I used to hate them. My money egg story here explains how my perception of money was greatly shaped by my parents’ influence. At sixteen years old, they had me open a few credit cards under my name, and then maxed out those credit cards. By the time I was a freshman in college, I was getting letters in the mail saying that the credit card minimums are not being met and that my credit score was being affected. When I confronted my parents, their answers were “Don’t worry about it. We have it under control.” Since 2007, they had maxed out my cards at $20,000. Eventually, when I was 21 years old, I became brave enough to say “No more” and shut down all credit cards that they had access to so that they couldn’t keep using them. To this day, they still owe $8,000 towards that debt. This relationship with money is what made me fear my student loans, and it is eventually what propelled me to knock ’em down! Because this means that all this time, my parents were paying massive amounts of interest on credit card debt, and they still have not been able to pay it back. Credit cards have some of the highest interest rates and unless they are paid back in full at the end of every month, they only work to hurt your financial journey. Therefore, while I advocate the use of credit cards in order to propel you forward in reaching your finance goals, I also warn that you must have the wherewithal to be able to handle credit cards well. If you are starting from a place with existing credit card debt, my advice would be to work with all you’ve got to pay it down … OR COMMIT FINANCIAL SUICIDE! We don’t take credit card debt very lightly around here. So when Andrew Rombach from LENDEDU asked if he could share some tips with my readers, I was all on board. If you are struggling with paying off your credit cards, I hope you find some useful info in this post. 

Do you find yourself in the vicious cycle of trying to pay off your credit card debt? Do you have multiple cards and aren’t sure where to start? You’re not alone in that struggle. Credit card debt is a common problem for consumers. It’s all too easy to fall into. Just take a look at a few nationwide statistics.

According to the Federal Reserve, households in the United States owed a collective $999 billion in credit card or revolving debt by mid-2018. Some sources put average credit card debt at over $6,000 per consumer, and cardholders typically have 4 credit cards. That’s quite a hefty sum to deal with for any household, and if you find yourself in this situation, then you may find yourself stuck paying the minimum endlessly on several cards.

While getting out of excessive credit card debt is hard, it’s certainly not impossible. There are a few ways to manage your credit cards or transfer the debt that can save money, make your life simpler, or both. Check out a few of these tips if you want to find a different approach to your credit card debt.

Try Debt Consolidation Loans

A debt consolidation loan is basically a personal loan used to pay off various forms of debt, or credit cards in this case. To put it simply, you apply for and take out a loan from a bank or lender, which is usually unsecured. That loan pays off your credit card balances. Now you must make monthly installment payments on just one loan instead of various credit cards.

Consolidation loans provide the benefit of simplifying monthly payments to just one payment; plus, it adds certainty to repayment because you can stick to one repayment schedule with an end goal in sight. Furthermore, clearing your credit cards may lower your credit utilization ratio. Finally, a possible interest rate reduction on your debt could save money. This new debt consolidation loan comes with a new rate, so it could be lower than your credit cards depending on your credit.

A drawback is the eligibility requirements for a new personal loan. Lenders prefer applicants with a great credit profile and high income; in fact, those applicants are more likely to get lower interest rates. Also, remember to use newly-cleared credit cards wisely moving forward. You don’t want to be left with a loan balance and mounting credit card debt again.

Time Your Payments Accordingly

Some credit card debtors consider timing multiple monthly payments to save on interest. Interest cuts into your principle payments and extends the repayment process, but timing additional payments can help reduce your principal balance before interest accrues.

After making your monthly interest and principal payment, your interest balance should be lower moving forward. Before it accrues again, it may be worth making an extra payment on your cards. This will cut into the principal balance more significantly, and it also reduces the amount of interest paid on the next scheduled monthly payment.

On the negative side, not everyone has the extra cash to make a second payment each month. If you don’t have the money, then you may need to settle for another way to save money and expedite repayment. 

Try Either the Debt Avalanche or Snowball Method

The debt avalanche and snowball methods are two different ways to handle multiple credit cards over time, and neither requires taking out a loan or new credit card.

The avalanche method requires you to make large credit card payments on the account with the highest interest rate, while paying the minimum on all other accounts. After you pay off the high-interest credit card, you repeat the process with the next high-interest card.

It’s counterpart, the debt snowball method, works in a similar way, except you must prioritize low-balance credit cards. You would make larger payments on the credit card with the least debt and maintain the rest. When paid off, start paying more on the next low-balance card.

A major benefit of these methods is simply organization. They help you get on track with a plan of action. By prioritizing high-interest debt with debt avalanche, you’re paying off multiple debts more efficiently which should save money (eliminating high-interest debt reduce interest costs). With the snowball method, you can simplify repayment by cutting out low-balance cards from the equation. It’s generally accepted that avalanche saves more money than snowball, but that is still up for debate.

These methods are ideal because they require budgeting with your own cash (no loans involved), but this may also be a drawback because it’s very hard to pull off without the extra money for larger payments.

Balance Transfer Credit Card

If you opt for this method, you will take out a new credit card that comes with a lower interest rate, preferably a super-low or 0% rate during an introductory period. You then must transfer your credit card balance to this new card and begin repayment. It’s similar to debt consolidation, but the debt is transferred to another revolving account instead.

The point here is to get a lower interest rate on your credit card debt in order to save money. Ideally, you can get a zero-rate offer for up to a year or more which would save the most money. The goal is to pay your debt before that intro period is over.

Like with debt consolidation, you may be tempted to rack up more charges on a freed-up credit card. Remember that the debt doesn’t go away; you still need to pay it off. Also, balance transfer cards may be less suited for transferring multiple balances depending on your new credit limit.

Find the Method That Works Best for You

Each method offers its own set of benefits and drawbacks. One method could suit your budget perfectly, but another may not be the best fit. If you have the cash and organization skills, then maybe debt avalanche/snowball would work best. If your credit is stellar and you’re used to loans, a debt consolidation loan could be the solution.

Finding the method that works best for you is what matters most. Be honest with yourself and look at which style will best suit you – and then starting acting on it.

Andrew is a Content Associate for LendEDU – a website that helps consumers with their finances. He got his start in content and finance by writing all about credit cards. When he’s not working, you can find Andrew hiking or hanging with his cats Colby and Tobi.

Finance: Make Money Dog Sitting with Rover

This blog post is in affiliation with Rover.com, a platform that connects dog owners with dog sitters. I, myself, am a dog sitter at Rover and this hobby-turned-side-hustle is one of my additional sources of income!

I love watching dogs for other people. Actually, I love watching animals, period. But especially in the past half-year, I have dedicated my time to taking care of other people’s pets while their owners are away. How? Through ROVER. Rover is a hobby-turned-side-hustle and it is one of my most favorite gigs. Today, I wanted to take a few moments to share with you the benefits of becoming a dog sitter for Rover, plus a few tips on how you can start earning your own extra income by taking care of pets!

But first, why be a dog sitter?

I don’t like the idea of placing dogs (or cats) in kennels or small spaces overnight, and since my husband and I have plenty of room and time to spare, we have taken on a number of dogs in the past year. We have no children of our own, but we like to think of ourselves as temporary parents to these loving creatures. In return, being a dog-sitter gives us a number of life benefits. Here are a few of our favorites.

Benefits to Being a Dog Sitter

  • Increases Income – Dog sitting is a side-hustle. It increases our income, thereby allowing us to pay off my student debt faster. The amount of money you earn from Rover depends on what services you provide, as well as how much you choose to charge. That’s right! Rover lets YOU decide how much to charge. Off course, a cheaper price will increase your market, but a more expensive price will also reflect your level of expertise. Currently, we charge $30 a night for dog-sitting services. And since dog sitting for us is FUN, I like to think of it as getting paid for having a good time. We earn over $200 for a week’s stay. If you can manage to book your calendar more frequently or if you charge more for your services, you can easily earn up to $900 as a part-time Rover sitter. Rover reports that sitters who work full-time and take on 2-3 dogs at a time earn an average of $3,000 a month! I can see how someone can earn even more than that by adding multiple services to their profile – such as dog-walking, house-sitting, and in-house visits. However, do remember that Rover charges 20% for the use of their platform.
  • More Frequent Exercise – I will be the first to say that Mike and I hardly get any exercise. It’s a fault of ours, I know. Barring early morning yoga stretches with Adriene, and occasional laps at my parent’s community pool, Mike and I do not have an existing exercise routine. Being a dog-sitter forces us to at least walk two to three times a day for thirty minutes. On weekends, it forces us to take the dogs to parks and beaches, and we sometimes run (gasp!). Typically, the weekends involve longer walks that span one to two hours, or more activities such as ball tossing and frisbee soaring.
  • More Productive Mornings – I wrote recently about predawn priorities and ensuring productivity in the early mornings here. Dog-sitting facilitates all of that. We usually wake up early when our cat signals that it’s time to eat … at 6 am on the dot. It escapes me how he knows it’s time, but to avoid any interferences with his breakfast schedule, we take the dog out as the cat feeds, instead of crawling straight back into bed. Having a dog around makes sure that we are up and about in the wee hours of the morning, and by the time we’ve walked, the cool refreshing morning air and mild exercise has prepped us to start our day. I lay out the dog’s bowl of water and food, Mike hops into the shower, and I make breakfast and coffee.
  • Further Exploration of our Neighborhood – We are lucky in that we live in the heart of a downtown area. So there are plenty of places wherein one could take a dog out on a walk. Dog sitting gives us a reason to explore more of our neighborhood. It gets us out in the later hours of the evening, and allows us to see the vibrant city life that we would otherwise avoid due to our homebody-ness.
  • More Quality Time – What I cherish most about dog sitting is the quality time it lends to Mr. Debtist and myself. My favorite moments include playing chase with a new pup, tossing a ball between us as the dog runs back and forth, going on long walks along the beach on weekends, or having long conversations as we walk our own neighborhood. I also love snuggling on the couch as I read and he plays video games, with a dog on one side of our laps and a cat on the other. We make a great team, dedicated to walking the dogs together, and taking turns feeding the pets as well as socializing them with our cat. We kind of create these little memories for our family, and I like to think the dog appreciates the quality time just as much!

Now that you’ve heard my favorite parts of being a sitter, let’s talk about how you can start your own journey to getting paid for playing with pets! But first, why Rover?

ROVER connects dog sitters to animal lovers.

Pet sitting is an ever-growing industry, and we are far from reaching its peak. As travelling becomes more accessible, we will see a continual increase in the need to have people watch over the pets who are left behind. Most people would report that they would rather have their pets stay in the comforts of someone’s home rather than be caged in a kennel overnight. This is not only great news for pets, but for people who are seeking to earn extra income in this line of work as well! But how does one get started in building a name for themself and connecting with dog owners in their area?

Enter Rover.

FOR SITTERS…

Rover is the perfect platform for both new and experienced dog sitters. It connects potential dog-sitters with pets in the area without needing to put up flyers or create ads on Craigslist. The audience that you have on Rover is specifically made up of people shopping for dog sitters. And dog owners love Rover too, because it lists a number of different services, including dog boarding, house sitting, dog walking, doggy day care, and drop-in visits.

Not only does Rover connect you with dog parents, it is also a great space to build credibility. Reviews after each sitting are public, and is a great way for you to spread your quality services via “word-of-mouth”. You can also upload photos of yourself with dogs or of your home where dogs will be staying to convince dog owners that you are the right person for the job.

However, this does not mean that everyone should be a sitter. You need to make sure that your home is a loving and safe environment. You also need to be confident in your ability to take care of pets. This not only includes dog walking but also feeding, administering medicine, and reading dog behavior. You have to be active enough to give the dogs an appropriate amount of exercise, flexible enough to cater to the pet’s walking and feeding schedules, and patient enough to understand and learn each dog’s unique needs and wants. Lastly, you need to be a good communicator to the doggie parents, and competent in caring for the pet in case emergencies arise.

FOR OWNERS…

For pet owners, Rover makes searching for the appropriate sitter an easy task. You simply enter the dates, the appropriate zip code, and you can search through a number of profiles to find a match that would be good for your furry family member. As suggested per Rover, you can schedule a meet-and-greet to see if your pet and the sitter will get along, or to visit the house that your pet will be staying at. You can read profiles and reviews of your sitters, and rest assured that Rover performs a very thorough screening process for all sitters.

In fact, according to Rover.com, only 1/3 of the applicants make it through the screening process. And just to give a real life example, I actually applied to Rover upon hearing that a dentist colleague of mine also applied. My colleague has owned dogs before, currently owns a dog, and is a responsible and fun guy. We applied at the same time. Unfortunately, he didn’t get a position on Rover.com, who’s to say why. Rover requires all applicants to fill out a generic form, submit some photos, write essays, and answer situational questions. Examples of such questions include: “What would you do if the dog you are watching starts to fight with another pet at a dog park?” or “How will you ensure that your pet will not accidentally escape from your home?”. They ask how you would communicate with the owners if an accident were to happen, or how you would facilitate a meet-and-greet. It is obvious that the pets are Rover’s number one priority.

Lastly, Rover offers complimentary insurance for all services booked through Rover, as well as access to 24/7 vet consultation and partnerships for the sitters. Their cell phone app makes communication easy between sitter and pet parent and it allows photo sharing for those who wish to keep a visual tabs on their pet.

A Guide to Becoming a Dog Sitter

If you are a dog lover interested in earning some extra income, or if you are someone hoping to make dog sitting a full-time gig, then here are the steps to growing your new-found doggy business.

  • Apply to Rover by filling out their general application form.
  • Gather photos of your experience with dogs.
  • Collect references that Rover can call. Let these references know that you’ve given the company their name. It is best to refer either dog owners who you’ve helped in the past or people who have seen you interact with dogs before.
  • Rover will send you a questionnaire full of situational questions. Answer them to the best of your ability. Try to keep at the forefront of your mind the pet’s welfare. Be honest in your answers.
  • Once approved, you need to set up a sitter profile. Include photos of your home and interactions with dogs. Tell people a little bit about yourself and your experience.
  • Part of the job is managing your own calendar. If you have any other engagements, you need to put that in the calendar so that searching dog owners will know what days you are available. Rover makes it very simple for you to create a recurring weekly schedule. Blocking off dates for personal time is made easier with the Rover mobile app.
  • Define your parameters. Determine the size of dogs you are willing to watch. Figure out which services you wish to provide. For example, I am solely a dog sitter, which means the pups have to stay at my house. You may wish to be a dog-walker, or a house-sitter, or offer in-house visits. List all your precautions and requirements. For example, I only choose to watch dogs that get along with cats. I also only accept dogs who are completely potty-trained. Lastly, I only take one dog at a time, unless there are multiple dogs from the same family, in which case, I take a maximum of two dogs. No two families may book with me at the same time, in case two dogs do not get along well with each other. At the end of the day, this is your business! You get to decide your limitations.
  • Offer owners a discount by providing a link that Rover gives you. This discount link gives your bookers a $20 discount while still allowing you to be paid in FULL. This discount only applies if the dog owner is new to ROVER. With the discount, you are more likely to get a review as well, so I would kindly ask everyone who books for one. These reviews can get you even more bookings in the future, since most people would trust sitters with a great history. However, you want to ask for honest feedback, not just five-star reviews. You want to know how you can improve your services because only great customer service will have dog owners coming back.
  • Now you are waiting for your first booking. Rover will send you a notification when someone wants to book with you.
  • Schedule your first meet-and-greet. I would recommend doing a meet-and-greet with every pet. You want to make sure that the pet is trained and compatible with yourself and your family. It is always best to be introduced to a pet on neutral ground, such as a public park, rather than at your home where a pet may feel intimidated.
  • If the meet-and-greet goes well, confirm the booking. Request feeding schedules, walking schedules, drop-off and pick-up times, emergency contacts, veterinary hospital numbers, as well as a list of behavioral tendencies. Ask for permission to take the dog out on any adventures you may have planned and inquire whether the owner prefers to get updates or photos throughout the stay. I like to communicate at least once a day with an owner.
  • After every stay, I follow up with the owner and ask for that review! As you get more reviews under your belt, the bookings come more easily. Eventually, enough people will know your name that you create good relationships with them and you no longer need to use the site to get more bookers. Tip: the best times to get bookings is on holidays and weekends. Being in town and able to watch pets during the holidays is a great tactic for dog sitters, since most families do their traveling during this time!

And that’s it! You can create a savvy side-hustle or full-time gig taking care of pets today. If you think you’re ready to start earning money dog sitting with Rover, sign up here. If you are a pet owner and want to be matched with a sitter, right this way. If you would like to have me watch your pup, this is me. And for all who are new to Rover, why not get $20 OFF with this discount: SAMANT24058 ? See y’all there!

 

The Importance of Fun Money in Financial Sustainability

We all know that I talk a lot about sustainability, harboring borderline ad nauseam (debatable). Most oft, it refers to an environmental topic, but once in a blue moon, it will refer to something finance related. This is because tackling a student loan of $550K+ has taught me a thing or two about how to set yourself up for success with paying down debt, one of which is that the looming debt seems to most an insurmountable task that very easily deters a person from pursuing a tackling of said giant. And if you were as crazed as I about financial freedom and you did pursue freedom from debt, I would postulate bet my money on the fact that we are looking at a journey long-term. In other words, opportunities abound for insecurities to start kicking in, and there are many forks in the road that either lead you back to where you started from (in our case, on a 25 year loan forgiveness plan) or to a dead end. So we must talk sustainability if we are to expect a level of success. More importantly, we must talk sustainability if we are ever going to c r u s h this game (which we are!)

Related Posts:

Finding Financial Sustainability

Saving every dollar towards achieving a goal can be a grueling task. Most inquiries from outsiders center around how we survive the suffering. Surely, we must be starving ourselves of LIFE in an effort to be free?

ABSOLUTELY NOT.

Firstly, if you think that’s the case, then you don’t know us at all. I think both of us are averse towards doing anything we don’t feel is right. Read also as anything we don’t want to do. And while that seems bratty at best, it’s actually the perfect recipe towards a happy life.

Secondly, I agree. Anyone who is bogged down by the stresses of meeting payment requirements may have difficulty enjoying “the finer things”, but who gets to define “the finer things”? Only you. So while society spends their hard-earned bucks on Rolexes and Teslas, your idea of a finer thing could be a cup of coffee, a morning of solace, a day outdoors, yeah?

And lastly, even when it comes to purchasing stuff, we have the ability to, but with mindfulness. We don’t have a tendency to purchase things right when we see them anyway, and scoff at that on-demand-pull that gets most people to do some regretful spending. What we do have is a category in our budgeting tool (this link will take you to my course on how to set up your own budgeting tool). We have to thank our CFP (who is no longer doing CFP work but who have been invaluable in sending us on our way to a healthy, financially fit life – see The Value of Having a CFP) for teaching us about the importance of having a category for spending on OURSELVES.

Yes! I am talking about a category dedicated towards FUN money.

Sustainability comes from a variety of inspirations and motivations. Just when the going gets rough, one can find the push they need in a community, in the re-evaluation of perspective, in a reminder of the reason WHY we started in the first place. Sustainability can also be found in a bribe – a reward persay … but a calculated reward. This is what fun money is.

How to Set Aside Fun Money

Fun money is literally a category in our budgeting tool. It sits under the “Wants” grouping, and gets allocated a monthly amount. Nothing large by any means. We are talking $50 a month. If we want something more than $50, then we have to save for a few months.

We have our own separate categories for fun money, and we can spend our fun money however we want. Fun money is spent towards things we want but we both don’t benefit from. So, for example, if I want to buy a book about bread, then that will come out of my fun money fund. Or if he wants to buy a video game to play with his guy friends, then that will come out of his fun money account.

There isn’t anything extravagant about the fun money bucket. Because the amount is so small per month (less than 1% of our entire income), there is no guilt associated with it. Because we each have our own category, there is no blame when one spends their fun money. And because we already planned for the spending ahead of time, there is no buyer’s remorse. In fact, the opposite is true. It starts the habit of serious consideration prior to purchasing, because you realize how long it took to build up your fun money fund, and makes you assess whether there are better methods of spending. In fact, I think fun money is a great way to teach kids about appropriate spending habits, especially if the percentage set aside towards fun money is small compared to what they actually receive from birthdays, holidays, and rewarded chore duties.

How Fun Money Helps With Sustainability

So you can buy a few items. Whoop-dee-doo. How does that help with paying down a massive student debt?!

The psychology of working essentially for free and putting all your hard-earned dollars towards a debt that allowed you to work in the first place is difficult to describe. The taxation on the mind, as well as the emotional roller coaster that one experiences, cannot be stressed. Some days, you wonder what it is exactly that you’ve done. You start to question whether it was all worth it. Eventually, you’ll come around. But the hoops you have to go through to continue on this journey … it’s comical how emo the whole thing is. Like I said, the insecurities roll in like a fog. You don’t realize their coming, but they sneak up on you. It is during these times that you may need a little boost of confidence. Moral support does the trick, but there are days when I feel like no one else TRULY understands. Because how could they? We all travel different paths, and no two are exactly alike. An activity helps as well, but only momentarily, as it steals the mind and takes it elsewhere. The insecurity doesn’t fade, however, and soon you are left where you started. Unless the activity spans a long period of time, all you can do is wait.

However, the human mind responds very well to a reward system. In fact, it responds so well, that many people are obsessed with rewarding themselves, so much so that they suffer from excess consumption. No need to go down that rabbit hole now (AGAIN). Reward systems are involved in positive reinforcement, or in bribing people to do what one wants them to do. So really, I guess I’m bribing myself. Or at least, I am psychologically tricking the mind into resetting to a more positive thinking space.

The human mind doesn’t respond to starvation. Nothing lives after that. But the reward system, the mind understands. Fun money allows me to give myself calculated rewards. Things that I have already budgeted for, the purchasing of which is controlled. I don’t need much, as we already know, but occasionally, I need a push. I need breathing room. I need a break. And then, I can keep going.

Fun money makes this work sustainable. Less scary, somehow. More manageable. It makes me less of an anomaly, and more human. Hopefully, it makes me more relatable, and shows people that this isn’t me performing some heroic. It’s something that’s achievable for others too. I hope it gets them to start on their own journeys, knowing that sustainability is possible, and that fun money doesn’t make you less dedicated, nor does it make you less successful. If anything, I will dare to say that it’ll feed your fire, and make you succeed where others only dare dream.

Pictured: My most recent purchase, supporting Two Days Off, an ethical clothing line by Gina Stovall based in Los Angeles, CA.

Finance: How We Paid Off $145K in Student Debt in Two Years

On the heels of the previous post, a word on how we paid off $145k in Student Debt the past two years. I think it’s one thing to inspire people to pursue a road less traveled with the hopes of reaching a more ideal life, but it’s another thing to give any meaningful sort of advice on the matter. It is the latter that I wish to address in this post.

I’d be the first to admit that tackling half a million dollars in student debt is a daunting task. However, with a few pointers under your belt, the task becomes much easier. Here are some steps that we took ourselves, listed in the order we took them.

Steps to Paying Down Debt

  1. Figure Out Your Why. The pillar to every debt pay-off story is the “Why”. Why are you pursuing financial freedom? How does paying off the debt lead you to a life you want to lead? What will keep you going? These are the questions you must first answer. You need to build that fire within you, the one that burns so achingly that you’ll never forget, turn around, or give up on the reasoning behind why you decided to take that first step.
  2. Hire a Professional. While not for everybody, I highly recommend this if you are like us and do not come from a lifestyle geared towards financial independence. As you can see from my money egg, I had a long history with money that makes me hyper-aware of excess consumption. Each person has their history with money and it shapes the way you view your finances. I knew when I graduated from dental school that I did not come from a place of wealth, and neither do I have experience with dealing with large sums of money. I also did not want to be the person dealing with a looming debt hanging over my should. I had to talk to someone, and fast! While colleagues were buying homes and cars with their first paychecks, the first thing I paid for was a financial planner. And it changed our lives! If you are swimming in a large amount of student debt like I am, then I would highly recommend a conversation with Travis Hornsby from Student Loan Planner (affiliate link). He helped us save thousands of dollars on our journey, and as you can tell from our Itunes interview (here) he has no problem telling you how to optimize your repayment journey … which is exactly the type of person you would need in order to get great feedback! He broke down why we could optimize our path better (from a financial standpoint) by waiting 25 years and investing our money instead, but I chose to follow what I felt was right, and pay it back aggressively instead. The good thing is, you can discuss options and a good professional will make sure that you are aware of all the ways you can tackle the debt, but in the end, you are the decider about what to do.
  3. Educate Yourself. Admittedly, we did this with a financial planner holding our hands. We learned about budgeting strategies, loan repayment options, ways to optimize our health insurance, options with our retirement funds, and more. Off course, you don’t need a financial planner. There are plenty of books, sources and inspiration out there. The more you get educated on personal finance, the more options you will have. As you learn new ways to battle the same thing, you will become more innovative in your solutions, and doors which you never knew existed will open. Knowledge will only facilitate the process.
  4. Get Budgeting Down. It’s difficult to direct money towards paying down debt when you are always scrounging for money in order to live. Living paycheck to paycheck would indicate that there is nothing left-over to funnel towards your goals (student loans included). Creating a budget and sticking to it will help. Start with my course on creating a budgeting tool, and go from there!
  5. Manage All Other Debts. The last thing you want to do is to focus on student debt so much that you ignore all other debts, or worse, accrue an even larger number of debts! For us, managing all other debts meant paying down higher interest debts such as credit cards. We paid these off within the first month of marriage. However, for those with lower interest rates than my student loans (that is, lower than 6.8%), we paid only the minimum payments. For example, Mike’s car loan has a lower interest rate AND a lower total amount. Therefore, the money would be of better use towards my student debt, rather than eliminating the car loan.
  6. Get a Good Job. Let’s face it, a good job will largely affect how well you can pay off your loans. A job that’s consistent, reliable, and pays well. As much as I would love to explore being a temp, I also know that working more days as a dentist will help us on our repayment path. So there must be a balance. I can’t just cut down dentistry to one day a week and then pursue all my other creative endeavors. And if you’ve got a large debt, unfortunately, it wouldn’t behoove you either.
  7. Consider Side Hustles. Once our spending habits were controlled with a good budgeting tool, I started to think of ways to increase income. Actually, I started to explore hobbies that I like to do, and found ways to use that to make extra money. I started side hustles at the beginning of 2019, and the returns have been increasing steadily. I cannot wait to see where this year of side-hustles will take me.
  8. Be Kind to Yourself Along the Way. Lastly, but most importantly, find ways to make this lifestyle sustainable. The importance of enjoying life, rewarding yourself for your hard work, and having grace cannot be stressed enough. If everything in your journey is harsh, then it will be difficult to continue on when the days get rough. Because they do. I can recognize when I feel bogged down by the weight, tired by the work. When I do, I schedule a day of rest, or force myself outdoors, or meditate to reset. I send all my focus towards taking care of me, and in doing so, the loans find a way to take care of themselves. Ways in which we make this journey more sustainable include finding creative joys – I dabble a lot in the arts, Mike dabbles in music, and we both fulfill recreational activities in the form of travel, hiking, board games, and get-togethers with friends and family. In the end, you have to do whatever it takes to feed the fire.

Finance: The Second Year of Paying Down $550,000 in Student Loans, An Update

I can’t believe how fast time flies! The second year of paying down my student debt has passed, and I didn’t even notice. After the first year, I posted an update that outlined a review of our journey. It seemed to help some, so I decided to do the same for the second year. This year there were some ups and downs (a lot more downs than we thought would happen), but I am so pleased to announce that we are on track to finish paying off our debt in under 10 years. In fact, if we continue on this same trajectory that we’ve been on, we are actually estimated to finish 6.9 years from now, for a total of 8.9 years!! And I have high hopes to bring that number even lower. Read on to find out how we got here, and where we plan to go.

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To recap, we started off our journey with $574,034.50 of student debt (including the interest that had accrued)! All of which was mine. To date, we have paid a total of $145,128.48 towards my student debt over the last two years, bringing the principal amount down to $481,368.06.

To understand the progress, do recall that after year one, only $28,000 went towards paying down the principle. The rest of the $84,000 that we had paid towards the loan went towards the interest only. This means that only 33% went towards paying down the principle amount of the loan.

In year two, you start to see improvement. Of the $61,000 we paid to the loans, $29,000 went towards paying down the principle. That’s 47.5% of our payments going towards actually making the loan smaller!

Off course, you will see right away that we paid way less towards the loans in year two ($61,000) versus year one ($84,000). If we had paid the same amount or higher, we would have had an even higher percentage going towards the principle balance. So I guess this is a great time to recap what slowed us down this year.

THE SET-BACKS

  • In September of 2018, we decided to buy property. Property ownership was something we felt was right for us to do. We bought a live/work space that we hope to utilize in the future for some sort of business. Meanwhile, we are co-housing, or as financial independents might say, house-hacking, our way towards paying down the mortgage. Buying the property did entail two things to happen: We used some of our emergency fund to place a down payment on the home. Because of that, we are now re-building the emergency fund back up to what it was, which decreased our ability to pay back loans. Currently, we are setting aside $1k a month to rebuild the emergency fund and are on track to being back to normal in March of 2020. Also, it raised our total payments towards our housing a teeny bit, since now we pay for things like HOA fees and home insurance.
  • In October of 2018, we were delivered some shocking news. Mr. Debtist’s company experienced a laying off of 80% of the people working there, and even though Mike was one of the “lucky” few to stay, his pay got decreased by more than 50%! It was something we were not really prepared for, so on top of wanting to re-build the emergency fund, we also had to deal with a huge blow to our income. Since we were living off of one income, the change in salary really affected our ability to pay down the loans. But we made it work! That’s part of the joys of being on Loan Forgiveness Program even though we were paying it back aggressively. They still only required the minimum payments. Off course, we continued to pay more than the minimum. We were able to keep up with the interest that accrued and to slowly bring the loans down.

THE POSITIVES

Now that those two negatives are laid out, here are some positive things that happened!

  • A conversation with Travis from Student Loan Planner (affiliate link) is saving us THOUSANDS of dollars. He brought to our attention that we could optimize the loan repayment by switching from IBR to REPAYE. How does this help? Under REPAYE, the government subsidizes the interest at 100% for the first three years for an subsidized loan, and at 50% for unsubsidized loans and subsidized loans that have been present for longer than three years. Which means every month, we are given a free $850 to go towards our loans and help us out! This is fantastic because now that Mr. Debtist has a new job and we are back to our previous income, we also are getting help to pay back the debt. Whereas last year we were paying $6,500 per month towards the loans, we are now sending $7,300 towards the debt with the help of REPAYE’s stipend. And while we were dealing with the smaller income stream for four months, we were still getting that helpful $850 to add to the few thousands that we were contributing to the loan. If you want some loan advice, I really think Travis is your guy, and you can schedule a call with him to discuss your particular situation.
  • Additionally, the side hustle game has been ramping up since 2019 started! Now that we have our budgeting in order, it was time to start increasing our income. I was already writing on this blog and doing some dog-sitting on Rover, but I just recently started as a bread baker, and soon thereafter opened my own bakery called Aero Bakery. In January, I made only $14 in side-hustles, which made sense since we were off traveling in Australia and New Zealand for the first half of January. In February, I made $450, and in March, I made $750. For April, I am on track to make an extra $1,500 in side hustles! Read more about why I am an advocate of side hustles, here.

Why the Future Is Bright

So now, we are not only back on track with making $6,500 payments, but we are actually on track to be finished one year early! How did we do that? By being AGGRESSIVE. The minimum payment for a 10 year repayment plan was $6,063 a month. We set our sights on $6,500 a month. Even with the lapse during those few difficult months while Mr. Debtist struggled with his work situation, we were still able to be at a point where we have only 6.9 years to go! How exciting is that?! And what’s even more exciting is that I predict this will all snowball even more! I turn 30 years old this year, and wouldn’t it be great if this would all be cleared by the time I turn 35? That’s right! I have my sights set on getting rid of this in 5 more years. Here’s what we have planned.

  • Since we are now switched to REPAYE, we are making $7,300 contributions towards the loans, instead of the $6,500 that we were previously doing under IBR. That will vastly improve the trajectory of our path.
  • In March of 2020, we predict to have saved enough for our emergency fund, leaving an extra $1k to be funneled into the loans. That would increase our contributions next year to $8,300/month.
  • Also in Spring of 2020, Mr. Debtist is scheduled to finish his car loan payments. While I was in dental school, Mr. Debtist got a car loan and we currently pay $585 towards it every month. Freeing up $585 will increase our loan contribution to $8,885/month.
  • The side-hustling is just getting started. I hope to continue with many of these hobby-turned-hustles, and we will see how that impacts our payments.
  • Lastly, we decided not to refinance our loan at this time because of the risk of not being able to meet the minimum payments in case we have another fiasco like the job situation. However, when the loan is small enough (say under $300,000), we may still consider refinancing the loan. It’ll be less of a risk at that point, since the monthly payments will be way more doable. If we DO refinance as we get closer towards paying the loans off, then we will be able to attack the loans at an exponentially improving clip.

Please note that we are paying back student loans aggressively, but we are also doing it responsibly. We are living within our means, investing in our 401ks respectively, and are diversifying by entering real estate last year. I make myself less susceptible to fluctuating job conditions by having my own dental S corporation, opening my own bakery, working as a dog-sitter, working as a baker for another company, and doing some writing on the side. We are also a dual-income household, which greatly affects the possibility of this success.

If you are feeling lost in your student loan repayment journey, or you simply want to know your options, I would start with talking to a consultant at Student Loan Planner. This path is not for everyone, but it also may be more doable than they want us to believe. For those who just want to get budgeting down, why not start with my free course on creating a budgeting tool?

Finance: Taking It Slow

Yesterday, I was asked by a colleague for some financial advice. The conversation began with a request for a referral to our financial advisor, whom we actually no longer have. While the perks of having a CFP are many, our particular one had decided to pursue other professional endeavors earlier this year and Mike and I had decided to go without. For my colleague, I listed off a number of references that I have found most helpful to our financial journey, including Travis Hornsby (affiliate link) who saved us thousands of dollars in student loan debt, but my colleague wasn’t interested in student loan advice at this time. He was interested in honing in on his budget. In which case, I thought I would help.

His concern is one I often hear: “My fixed expenses are way too high. There is no way I can make ends meet with my income and my expense.” We then did a deep dive into some of his monthly expenses, and it appears that the most expensive recurring payments entail a car payment for a brand new Tesla, an apartment in a complex that offers all the amenities situated in a very popular city in Orange County, CA, and insurance payments. “Surely, none of those we can change.”

Somewhere in the distance, a buzzer goes off.

Maybe not right away. You can’t up and move apartments tomorrow, sure, but these are actually things we can change, if we wished. I suggested he sell their brand new Tesla, get rid of the monthly payment, and buy an old, used vehicle for a couple grand. I suggested he move away from large complexes where they charge up the wazoo for the gym and pool access, and instead opt for a co-housing situation, or at least a cheaper apartment. I also inquired about the possibility of geo-arbitrage. I suggested researching insurances further, to see if there are any options that will save them some money.

And then I saw it. The slight shake of the head, the glazing of the eyes as his focus started to turn somewhere internal. I knew I was losing him.


Talking about finances can be difficult. Hearing the steps you need to take in order to get from point A to point B can be quite daunting. It can make any person shy away, make them believe that frugality is for superheroes, that financial freedom is not in the cards.

I guess I should start with the following: It’s going to be slow. It requires a mindset shift, after all. A lifestyle needs to be upturned, and that is never an easy thing to do. To bridge the gap between the impossible and something more attainable, start with a conversation.

For example, right now, it may seem impossible to just get up in the middle of the night and move to a cheaper place. Plus, the decision to unroof an entire family isn’t up to you. Everyone gets a say, too. But speak up about the possibility. Look ahead to when the lease ends, what options lie ahead. Brainstorm, to get your brain on the same wavelength.

Then, start with one change. Maybe it will take a few months to find a used car to replace the current one. Focus on what you can do now. If you aren’t ready to trade your car back in, then call insurances. That let’s you tackle one thing. You probably won’t switch to a new one this week, but you’ll get a few quotes to pocket for next.

For some, even this may be a bit too much. Big things can be intimidating. Calling insurances requires a lot of research, and right now, there isn’t the time. If this is the case, then let’s drop the big things all together, for now. Refocus, and start small.


So we backtracked. He initiated a new tactic, and I followed suit, not pushing the bigger budget cuts. For now, that leap may have been too great.

He asked about grocery budgets. He shared a number around $800 for a family of four, which isn’t the worst. I’ve heard of more. I shared our goal of $300 for two adults, which also not the most frugal. Then he asked me about dining out. I shared that we have a target of $100 for the both of us per month. His eyes grew wide.

“Where do you eat, In N Out?!?!”

Yeah, sometimes.

He said $100 could not even cover a night of sushi.

And he would be right.

His family spends closer to $800-900 a month in dining out. There. A place where we can work. Further discussion reveals that they dine out 3-4 times a week, versus Mike and I’s once a week. Changing dining out habits, even by simply limiting them, is a much more doable thing than relocating an entire family to a cheaper state. Here, we can begin. And slowly we work our way up.


How about shopping?”, he asked.

I don’t shop.

“You need to talk to my wife.”

I think she would hate me.

Because here’s another thing. Going up to a significant other who enjoys shopping and telling them that they have to not shop the entire year can be perceived as quite near impossible, let alone unsustainable. If any success is to lie ahead in your future, we need a tactic that helps others slowly transition. Perhaps, we cut back on spending this month. Then, we cut back on the number of items next month. Afterwards, we may narrow it down to one. Lastly, we tackle the time. No shopping for “x” number of months. The turtle wins the race.


I think what people need to hear most is how slow the process actually is. There’s no way around it. It won’t be tomorrow that you suddenly quit every pull you feel towards spending. You can’t drop all the bad habits in one go. You’ll make mistakes and buy that dress. You’ll start looking at cars you wish you had. We both did. You’ll want to kick yourself for the slip ups. You’ll feel hopeless when you take a step backwards. You’ll be embarrassed when people hear. But don’t give up then, because that’s the point where your mindset shifts. Even if you can’t see it.

Personal Finance First Step: Mastering the Budget

If you are embarking on a personal finance journey, then let’s get you started on the right footing. Step one begins with mastering a budget. Some may scoff at me and say that I know nothing about becoming rich and getting to financial freedom. They laugh and say that I must not realize that reaching financial freedom lies in increasing income, rather than decreasing spending. But I know something that they don’t know.

You can increase your income, and never be financially free. It’s just a quick fix attempt, and usually, quick fixes do not work. In order to really tackle your personal finance, you need to start with the basics. You can’t just jump ahead to making a ton of money, because without mastering a budget, you’ll likely never see that extra money you make. If you’re like most Americans, you’ll spend it before it even gets to your bank account.

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Now I’m not naive enough to believe that mastering your budget is all it takes. I agree that there are limitations to mastering a budget. One can only cut their spending so much. On the flip side, one can increase their income exponentially…indefinitely, perhaps.

I, myself, am well aware of the need to increase income. I worked three jobs while going to undergrad to increase my income, but I also graduated in three years in order to cut spending. I was one of the few students who worked during dental school, just to make a little extra money. And even now, am a side-hustler of sorts. I work in dentistry, write on my own blog, write for other blogs, walk dogs via Rover, work the midnight shifts as a bread baker with Rye Goods, and bake my own bread to sell (currently I am applying for a license to open my own “bakery”). But before all of this, I mastered my budget.

Here’s the thing. I know many people who are high income earners. I define high income earners as people who make six digit incomes or more. Most of them are also swimming in debt. This debt includes car loans, mortgage loans, student loans, and even consumer debt. Unfortunately, lifestyle creep is real, and unless you’re well-versed in staving off advertisements who are convincing you to spend more as you earn more, you will likely be one of the top targets (and victims) of lifestyle inflation.

There’s a statistic swimming around that 80% of Americans do not have $2,000 set aside in an emergency fund. Eighty percent! The part that gets me is the fact that $2,000 won’t even cover most true emergencies. Medical bills are way more than $2,000. If something happens to your home, or someone loses a job, $2,000 won’t last most people one month in Southern California. While it’s hard to confirm the statistic, for they do have a tendency to appear out of nowhere and start floating around, I can confirm that many patients that I meet don’t have the income to jump into an emergency dental procedure right away. Yet many of them are working their tails off (I can’t tell you how many nightguards I’ve diagnosed to help with stressful grinding habits), and earning decent pay, and still, they have to “save up” to treat a tooth in pain. And trust me, you wouldn’t put off treating a tooth that really hurts, unless you absolutely have to. It’s a feeling one never forgets.

People are working longer hours and making more money, but are saving less and less. We’ve been raised to be consumers. It’s not an anti-consumerist society, I can tell you that. But we haven’t been taught how to be SMART consumers. I was never taught how to ration out my earnings. I was never taught to pay myself first. I was told that good credit is GOOD. Wrong. Good credit is bad, and bad credit is worse. People without credit history probably are the best with handling their money. (This does not mean they are the richest. Just that they are really good at handling money).

All of this to say, you can try to get rich by working your butt off. You can spend all the hours of your day for forty years of your life trying to make enough money, and then some. But you can’t be successful if you don’t know how to manage it. You can try to take the short cut, the quick way to success. But that’s what most Americans are doing, and eighty percent of them don’t have $2,000 set aside for emergencies.

If you were to take my advice, I’d say start mastering your budget. If that’s something you’ve wanted to do in 2019 but haven’t had the chance, check out my free course How to Create a Budgeting Tool, and get started today!