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Another Very Brief Student Loan Update – Down Another $3 Thousand

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Earlier this month, I posted an entry talking about how focus, research, and action helped me figure out how to reduce my student loans quickly and efficiently. In that update, I noted that my United States Department of Education student loan sat comfortably at $37 thousand. Well, here we are just a short ten days later and I’m pleased to say that my student loans have dropped yet another $3 thousand and are now sitting very comfortably at $34 thousand.

Down to $34 thousand

Unlike the entry from earlier this month, I don’t really have a lot of discussion or proselytizing to write about regarding this $3 thousand drop. A few of the comments that are buzzing around my head as I write this include: I’m happy about this drop; I’m pleased that my student loans are heading in the right direction; the light at the end of the repayment tunnel is getting brighter; I’m proud of the discipline that I’ve been able to display in making this happen; etc.

Sometime later this month (after Christmas) I intend to write a longer entry on the blog about some of the differences between my USED student loan as it stands at the end of 2011 versus on January 1st of 2011. There are a lot of significant differences including daily interest costing me much less today versus twelve months ago. Lots of fun data to look at – so be sure to stick around the blog through the end of the month to check out some of those fun facts!

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $61 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $34 thousand in principal to the United States Department of Education’s Direct Loans program – a loan which started repayment in July 2006 with a balance of $59 thousand. To date, I’ve repaid well over $30 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.

The Power of Focus, Research, and Action – Down Another $3 Thousand

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Three weeks ago I posted an entry talking about how my student loan debt had dropped down to $40 thousand. Well, here we are not but three weeks later and I’m pleased to say that my student loan debt has taken another big drop. No, it’s not down to $39 thousand or even $38 thousand… it’s lower. That’s right. As of today my student loan debt is sitting at $37 thousand.

Anything is possible with a little focus

For this update, my words of wisdom really shouldn’t be that awe-inspiring or revolutionary. The title of this entry notes that the combination of focus, research, and action can make almost anything happen. In my case, I decided two years ago that I was done with the student loan albatross that weighed down my entire life and I was going to focus all of my efforts to rid that debt from my world as soon as possible. I didn’t want to be one of these people in their 40’s or 50’s or even their 60’s talking about how they’ve been paying off their student loans for decades.

Those people are victims – and the vast majority of those victims are in that situation because they allow themselves to be. I’m not a victim. Those people are victims of their own inability to focus on their problems, research solutions, and put those solutions into action. They allow themselves to get bogged down in the misery of a number (“I owe $XX thousand!”). It’s ridiculous.

After I made the decision that I was going to rid myself of my student loan debt, I did some extensive research on my financial situation. I mean I did go to college and graduate school for a total of about seven years – if I knew anything after all of that education it was how to sit down and analyze a problem! So that’s just what I did. I sat down and did some research on where my money was coming from and what I spent my money on each month. I thought about which expenses were totally necessary – the type of costs that I absolutely couldn’t get rid of (rent, utilities, student loan payments). I thought some more about which expenses were, essentially, discretionary – the type of costs that I could dramatically cut, reduce, or even eliminate (cell phone bill, cable packages, grocery store visits, new clothes, entertainment money, etc). I also put some thought into financial security. For example, how much would I need in a “just in case” savings fund to survive if I lost my job? How much should I set aside in my savings account today versus in a few years when my student loan debt wasn’t accruing at a high interest rate? What was the long-term difference in interest rate earnings versus interest rate payments?

These are just a few of the many questions that I sat down and asked myself during the research phase of my student loan elimination strategy. But I didn’t just ask myself these questions and ponder the possibilities – I found answers. I found solutions.

Some of the answers to these questions weren’t easy to find; other questions came up with answers that I didn’t particular care for, but I recognized that there are real solutions out there if you have the capacity to be truthful with yourself. Sadly, many people live in a world that is formed by their own delusions and thus they’re not able to be truthful with themselves. It’s a pity that their environment as well as their personal and professional educators allowed them to grow up in that manner. In fact, it’s the real bane of the current “occupiers” around the nation, but we’ll get to that in a few paragraphs.

Anyway, once this research was finished I was determined to put those solutions into action. I knew that I could reduce expenses and I did. I knew that I could earn more money by working at my job during the day and starting a website company on the side – so I did. I also knew that I had the credentials to earn extra money by teaching during my free time – so I researched the opportunities available and got hired at two colleges. Slowly but surely I built up my “just in case” fund. When that was set, I began shoveling what seemed like an incredible amount of money into my student loan payments each month. The minimum payment on my private student loan was about $375 per month. First, I sent them $400 each month. Then I sent them $450 and then $500. After a few months of focusing, I was sending the private student loan company some $1,000 per month. That eventually grew to over $2,500 per month during 2010 until I paid that loan off completely about one year ago.

In short, I focused on the problem, researched the solution, and put the answer into action.

This is why I get enraged when I see people on television occupying different parts of the country complaining about a $20,000 student loan debt or a $50,000 student loan debt or even a $100,000 student loan debt. I started at $120,720 in student loan debt in July 2006 and here I am about five and a half years later and I’ve whittled that debt down to $37,000.

I am not a rich person or from a rich bloodline. I do not make huge gobs of money. I do not have access to anything special that these protestors couldn’t get the same access to in their lives. The difference between me and the protestors is that I refuse to be a victim. I refuse to turn my back on my debt and obligations.

And for the few occupy protestors who manage to find their way to JerseySmarts.com, let me say this…

Look, I know it’s hard. I know it’s a bitch. I hear these protestors complaining about putting their lives on hold and I understand every last word of that complaint. My life is on hold, too. I put off relationships (which will push off marriage and a family until later in life). I put off buying a house (also a “later in life” situation). I put off buying a new car and instead I drive an old, beat up Honda. I put off buying the top brands of clothing. For about a decade I’ve put off going to the bar regularly as well as spending money on things that are entertaining in the moment or would build more social relationships. I know what the occupiers are complaining about down on Wall Street – I really do.

But the time has come to stop being victims and make “it” happen. I don’t know what “it” means to each of these protestors and their personal situations and I would never project my success as a path for their success. However, there is some type of power in focus, research, and action. I’m sure that each of those protestors who are complaining about their student loan debt burden can find a way out of the darkness. It might mean that they have to do things that they don’t want to do like get two or three low-paying jobs and stop spending money on expenses that are, in reality, discretionary. For some, it’ll mean a hard splash of reality and there’s nothing that any of us can do about that to help them. For others, it’ll mean facing the reality that they shouldn’t have bought that new car and now they need to turn it in and drive a clunker for a few years. Yeah, you may not be able to keep up appearances or social statuses with your friends who have iPads and brand new cars and are buying homes and getting married, but life’s tough sometimes – get over it and get to work. Everyone’s story is different and everyone’s solution will be different.

It is time for solutions and those solutions will only be successful if they are created by each person, individually.

Oh, and did I mention that I managed to repay $84 thousand ins student loan principal and some $30 thousand in student loan interest all while donating 10% of my pretax income to nonprofit organizations and also working full-time at a nonprofit organization? Don’t tell me that you can’t be socially responsible or a “do-gooder” and still not have the discipline to annihilate student loan debt. I don’t buy it.

Stop being victims and start finding solutions to your problems. If months of occupying with absolutely no change in policy on the horizon as a result of those occupations can teach the protestors anything it should be that no one is going to fix this problem for them.

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $61 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $37 thousand in principal to the United States Department of Education’s Direct Loans program – a loan which started repayment in July 2006 with a balance of $59 thousand. To date, I’ve repaid well over $30 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.

Guest Editorial: Is Your Sleep Debt Growing?

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We talk a lot about financial debt here on JerseySmarts.com, but today I’m glad to bring you a guest post from Nancy Ulrich of Memory-Foam-Maniac.com. Nancy has prepared the article below (everything below this paragraph) which talks about the potential of a sleep debt growing in your life. It’s very interesting – I suggest giving this article a read. Enjoy!

Is Your Sleep Debt Growing?

Or is your debt growing because of your sleep?

Your sleep shouldn’t cause your debts to grow. But poor sleep habits and poor mattress choices can give you financial nightmares.

How Can Sleep Debt Be Expensive?

Asleep at work?

Most Americans get by on 7 hours of sleep a night. But studies have shown that the average optimum amount of sleep is closer to 8. You’re probably running a sleep deficit or ‘sleep debt’ right now. But it’s just an hour a night, what harm could it do?

The effects of sleep deprivation of just one hour can be seen the next day. Just look at what happens when we move the clocks forward by an hour in the springtime. In the days following the first Monday of the change to Daylight Saving Time there’s a spike in heart attacks, workplace injuries and fatalities.

Also, drivers whose nightly sleep averages 6 to 7 hours a night are almost twice as likely to be involved in car crashes as those who snooze for an extra hour. And you’ve surely heard about how lack of sleep is associated with many diseases from obesity to high blood pressure.

Even if you avoid sleep related bodily injury and the obvious financial penalties associated with them, you haven’t avoided financial mayhem.

Sleep debt is also associated with lower productivity, increased impatience and difficulty concentrating. None of these traits will help you pay off those student loans faster. And definitely save those important investment decisions for days when you’re well rested.

How can you tell if you’re running a sleep debt? It’s easy. If you’re sleepy in the day, particularly around 2:00 to 3:30pm, you need more or better sleep.

But Don’t Good Mattresses Cost A Lot?

So now it’s obvious to you that you need a great night’s sleep to boost your productivity and keep healthy. But one of the reasons that you don’t sleep very well is that you hate your bed. And every ad that you’ve seen lately screams that you need to ‘replace at eight’ and spend as much on a mattress as you would for a small used car.

The ads are wrong. Good sleep can be cheap. You don’t necessarily have to replace any mattress more than 8 years old. And you don’t have to take out another loan to be comfortable at night.

The proof is in the same October 2009 Consumer Reports mattress survey of 17,000 subscribers that catapulted the expensive Tempurpedic brand to a national obsession. They found that “any new mattress beats an old one.” And for those who said that they often had sleep problems, 78% said that any new bed improved their night’s rest.

The study also found that among problem sleepers, Tempurpedic (memory foam beds) and Select Comfort (adjustable air mattresses) provided the most relief. On the other hand, Spring Air and Sterns & Foster buyers (both are lower cost inner spring mattress brands) were in the 10% of the survey takers that said that their new mattresses made their situation worse.

But buying a Tempurpedic or Select Comfort bed is one way to increase your debt. They’re expensive! So…

How to Get Good Sleep Cheap?

Determine if you need a new bed or if a much less expensive mattress topper will work for you. There are two instances where you can get away with buying a topper. The first is if your bed’s not sagging more than a half an inch. The second is if your mattress is too firm.

In either case, go online and buy a topper that’s 2 to 3 inches thick. You should be able to find a queen size for under $200. Here’s some memory foam mattress topper reviews and quick advice on what to look for in a pad.

If you do need a new bed because your old one is worn, you will have to spend a bit more. Buying a used mattress is not recommended, particularly since bedbugs have made a big comeback in recent years.

So what are the best mattresses for your budget? We’ve already seen that the lower cost inner spring beds actually made some people’s sleep worse. And unfortunately with airbeds, you do get what you pay for. Inexpensive air mattresses leak and you could end up sleeping on the hard floor. That leaves memory foam mattresses as the best alternative for people looking for good cheap sleep.

The good news is that the ‘any new bed is better than the old one’ rule also applies here. Buyers of inexpensive memory foam beds are almost as happy as those who buy the pricey Tempurpedic brand. Better news is that good quality budget memory foam beds are very easy to find online. Just google “best mattresses under 500” for reviews and recommendations.

Sleeping Smart Cuts Debt

Reduce both your sleep debt and financial debt by sleeping more and making better bed choices. And the side benefits are that you’ll also be more productive and have a better social life.

So what are you going to do today to shrink your sleep debt?

Bio: Nancy Ulrich writes for Memory-Foam-Maniac.com and is a local business consultant for web, mobile and social media marketing.

Student Loan Debt Drops Another $1,000; Now Comfortably at $40,000

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As someone who reads and writes a lot about student loan debt, it seems totally bizarre to write that my student loan is sitting “comfortably” at $40,000. Yet, I felt that using the word “comfortably” in the headline of this entry was absolutely appropriate because it is completely true. Whereas two years ago my student loan debt was somewhere above $100,000, I think it’s obvious to see why I feel a bit of relief and comfort with having only $40,000 left outstanding in principal.

Comfortably at $40 thousand

A few days ago I sat down and completed my personal budget form for the remaining payments on my entire student loan debt burden. By the way, you can download a version of the spreadsheet that I created for this personal budget form by clicking here and scrolling to the bottom of the entry. My projections show me paying off my student loan in full by June 1, 2013, but I should be able to move a little bit quicker than projected.

There are some variables that I can’t anticipate yet so my projected final repayment might change by a month or two (closer, not further away). In the next year or so some of my major volunteer obligations will be coming to an end. Along with the increased free time that I’ll have (where I could potentially make more money), I’ll also be free of some annual donation requirements that I accepted when I assumed these volunteer positions. With a few extra bucks to play with I might be able to bring that final repayment date back another month to May 1, 2013.

Also, I always have the option that I exercised last fall to accelerate my repayment and final payoff of my NJHESAA student loan. That option is to cash out of my small stock portfolio and use all of the proceeds to repay the balance of my USED student loans. If I was to exercise that option, then the final repayment date wouldn’t be June 1, 2013 or even May 1, 2013, but instead it would be somewhere around December 1, 2012 – or about one year from now.

While I enjoy having my small stock portfolio it is very tempting to cash the whole thing out to speed up the repayment of my student loans. I’m going to have to think about that for the next few months and see which way I want to go with that option.

Not much more to write about today. I did want to note, though, that not only is my student loan debt sitting at $40 thousand, but as of today I’ve repaid some $30 thousand in interest and another $81 thousand in principal. Pretty spectacular (when the alternative seems to be marching around Wall Street and complaining that my student loans are too big).

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $61 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $40 thousand in principal to the United States Department of Education’s Direct Loans program – a loan which started repayment in July 2006 with a balance of $59 thousand. To date, I’ve repaid well over $30 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.

My Slow and Steady Repayment Inches Closer to the $40,000 Benchmark

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It’s a new month and I’ve got a new update on my student loans. As of earlier today, my student loan debt dropped another thousand bucks to $41 thousand left outstanding. This follows my recent $3 thousand drop from a week and a half ago. Dropping another thousand in my total student loan debt in two weeks? Not bad.

Just $41 thousand left

I really don’t have any big, thoughtful discussion to accompany this student loan debt drop update. However, I thought I would take a little space to write about the United States Department of Education’s (USED) recent update to their online payment system.

If you’ve been reading my blog for a while now, then you may remember when I wrote about how utterly useless and totally not helpful the New Jersey Higher Education Student Assistance Authority’s online payment system was when it was implemented. By the way, that entry from February 2010 is one of the most viewed and most popular entries on this entire blog. In fact, if you go to Google and type in “NJHESAA” there is a link to that entry in the first four or five results that come up on your screen. Pretty good for some random guy’s personal blog, huh?

Before I start to go off on a tangent, let me get back to the short point that I want to make here. The NJHESAA’s online payment system was totally useless. Much like the government-enforced monopoly held by utility companies (which are keeping a large portion of New Jersey literally in the dark right now), NJHESAA actually charged borrowers to make online payments. It was pathetic. On the other hand, the USED doesn’t charge their borrowers to make online payments and even allows you to add additional funds to your regular monthly payment amount. It’s a great system – very easy to use.

A few weeks ago when the USED transferred their system to the new MyEdAccount.com website, I wanted to come on here and rant and rave about how much I hated having to wait for the new website to be implemented. Well, after using the new website and the new system for a few weeks I have to say that I’m very impressed. They didn’t cut many corners putting that website together and yet they still managed to pack it with a bunch of great information and keep a simple, no nonsense look.

Anyway, after my latest payment I’m down to $41 thousand left outstanding. That’s about $80 thousand in student loan principal repaid (and another $30 thousand in interest paid) since July 2006. Absolutely amazing. I definitely could have used that $110 thousand for other purposes over the last 5 years (buying a house, getting a new car, not working around the clock at multiple jobs during my mid-to-late 20s, etc), but it’s okay. The end is near for this repayment plan. Soon, $41 thousand will drop to $40 thousand and then $40 thousand will become $35 thousand and so on and so on until we’re counting down the last $10 thousand together. We’ll get there sooner rather than later.

It’s just a matter of sticking to your guns no matter what people suggest that you do with your money or your life. Most of the time in life, only you know what’s best for you. For me, repaying these student loans as quickly and efficiently as possible is what’s good for me.

And that’s what I’m going to do.

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. Since I started repaying my student loans in July 2006, I’ve repaid a total of $61 thousand in principal to various lenders including the federal Perkins loan program, the New Jersey Higher Education Student Assistance Authority, and CitiBank. I currently owe $41 thousand in principal to the United States Department of Education’s Direct Loans program – a loan which started repayment in July 2006 with a balance of $59 thousand. To date, I’ve repaid well over $30 thousand in interest to these lenders. Follow my student loan repayment story on JerseySmarts.com.