In this Powerpoint, we share a method for paying off your student loans. This is probably one of the most common questions that we get in our Financial Building Blocks classes or when I talk with people about student loans, "What do I do if I already have student loan debt?"
1. What you need to know about getting out of
student loan debt as quickly as possible.
Josh Lawson
How to Pay Off
Your Student
Loans
2. Contents
1.3 Ground Rules / 3
2.5 Steps To Paying Off Your
Student Loans / 8
3.Quick Calculations / 14
4.Should I Consolidate / 15
How to Pay Off Your Student Loans 2
4. 3 Ground Rules
1. There is no Silver Bullet
2. Sacrifice is King
3. Do Whatever It Takes
How to Pay Off Your Student Loans 4
5. 3 Ground Rules
1. There Is No Silver Bullet
Too often people want a quick fix for their student loan
debt. At the very beginning of this process, you have to
come to terms with the fact that there is no silver bullet
that will solve your problems.
You will have to do what it takes to get out of debt and
there is no one that will save you. That is an entitled,
spoiled-brat mentality and if you keep it up, you will be
in debt forever.
How to Pay Off Your Student Loans 5
6. 3 Ground Rules
2. Sacrifice Is King
In order to get to do the things that you love, you will
have to do the things that you hate. In the case of your
student loans, in order to get to the point where you can
do what you love to do with your money, you will have
to do what you hate for a time.
And for this season of paying off your loans, you will
have to tell yourself no a gazillion times. Practice with
me, “No, you can’t have that right now because you
have a mountain of student loan debt.”
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7. 3 Ground Rules
3. Do Whatever It Takes
What would you do if you had been taken captive as a
prisoner of war? Think about it. You would be absolutely
desperate for freedom. Each day you would be thinking
and brainstorming of ways to get free.
If someone told you to run 200 miles to get free, you’d
do it. Right now, you are a prisoner of your student loan
debt. It is keeping you back from your dreams and hopes
for the future, so you have to choose to do whatever it
takes to get free!
How to Pay Off Your Student Loans 7
8. 5 Steps To Paying Off
Your Student Loans
How to Pay Off Your Student Loans 8
9. 5 Steps to Paying off Your Loans
1. Stop Getting Into Debt
If you are currently in school, stop taking out loans. If you
are out of school, don’t sign yourself up for a bunch of
debt. You don’t “need” that new car, house, sofa, or
boat. You are in a hole of debt, so you have to stop
digging.
How to Pay Off Your Student Loans 9
10. 5 Steps to Paying off Your Loans
2. Get on a Budget
I know what you’re thinking, “budgets are for old dudes
who like pocket protectors.” Well, that may be true, but
it’s the only way that you can know how much money
you have to pay down you debt each month.
You can download a budget to help you get started here:
financesrestored.com/resources
How to Pay Off Your Student Loans 10
11. 5 Steps to Paying off Your Loans
3. Get on a Good Paying Job
If you think that you are going to pay off $40,000 of debt
by making $10 per hour, then you have lost your mind.
Believe in yourself and go out and get a great job.
Start by networking with people you know and find a job
that you can actually start paying down your debt.
A great resource to help you find that job is Dan Miller’s
48 Days to the Work You Love
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12. 5 Steps to Paying off Your Loans
4. Establish An Emergency Fund
Before you get started attacking your student loans, set
aside a small emergency fund of $1,000 to keep you from
going into debt when an emergency happens.
This fund is only for emergencies. Don’t use this money
for that gorgeous purse or sweet laptop. This is for
emergencies only, thus the name “Emergency Fund.”
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13. 5 Steps to Paying off Your Loans
5. Start with the Smallest
Now it’s time to start paying down your loans, but don’t
start with the $60,000 one first. That would be a pretty
depressing process. Start with the smallest loan and
build up some momentum. Then go to the next one, then
the next, until you are finally debt free.
The key with this method is to take your payments from
the paid-off loan(s) and add it to the next loan. Don’t
spend this money!
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14. Quick Calculations
When you are starting out, set an ideal timeline for your
payoff. That will give you an idea of what kind of lifestyle
you need to live and what type of job you need to have.
For example: If you want to be out of debt in 3 years and
you have $30,000 in debt, you will need to pay $10,000 in
debt.
If you are making $40,000 a year, then you will need to
be living on $30,000.
How to Pay Off Your Student Loans 14
16. Should I Consolidate?
Here are some simple rules to follow:
1) You can only consolidate once, so do it when interest rates are
low.
2) Only consolidate to a fixed rate. Stay away from variable rates.
3) Only consolidate if your aggregate of all your interest rates is
lower.
4) Do not consolidate you and your spouse’s loans.
5) Do not mix private and public student loans.
Some people prefer not to consolidate and stick with paying them off
one-by-one instead of facing one large mountain. The key is to
simply pay them off of fast as you can whether you consolidate or
not.
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17. Conclusion
The key to getting out of debt as soon as possible is
desperation. If you are desperate to get free, you will do
whatever it takes to get you there. Choose now to not
just make a plan, but to actually follow through with your
plan. The path to freedom will not be easy, but it will be
worth it. The process may take a few years, and you will
have to sacrifice sleep, fun, and other luxuries, but you
will be free!
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18. Worksheets
Personal Cash Flow Form
Business Cash Flow Forms
Retirement Projections Forms
Other Calculators
http://www.financesrestored.com/calculators.html
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19. Author Bio and Contact Information
Josh Lawson serves as the director of
Community Engagement at Antioch Community
Church in Waco, Texas. He is passionate about
seeing families set free from the burden of debt
and financial stress, so that they are free to
walk in the freedom that Christ has for them.
In the past several years, he and his team have
seen over 500 families go through their
financial classes and several hundred families
have received one-on-one financial coaching.
If you are interested in inviting Josh to speak to your group,
please connect through our website at FinancesRestored.com
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21. For More Information Visit:
www.financesrestored.com
Budgets, Forums, Helpful Blog Articles, An All Around
Great Time
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