Debt...Is Bad News

No one really likes being in debt. Yet our society claims that it is normal, and as long as you make your monthly payments it's not a big deal.

I have bad news for you. Do the math...it IS a big deal!

Now I am not saying that you're a horrible person for being in debt. Nor am I saying you're financially stupid. I would be a hypocrite if I were saying such things because my husband and I are in debt. However, a month or so ago we finally sat down and did the math.

We had a $13,000 loan that, over SIX years of paying the monthly payments, we would have paid over $16,000 for! That is about $3000 being paid in interest, which means we are paying 25% more than we borrowed. Not to mention, we would have SEVENTY-TWO months of minimum payments.

Now if that isn't frightening enough. We looked at that monthly bill. Our bill even stated how much of our monthly payments was going towards paying down the principal (original loan amount). 2/3 of that monthly payment went straight to INTEREST!


While I am not a fan of debt in any way shape or form, there are certain types of debt that are very difficult to avoid; student loans and mortgages being the main ones. However, that does not mean we should be content with paying so much extra money in interest. So if you, like me, are bent on saving money in every way possible...you will pay down those debts as soon as possible and end up saving yourself thousands of dollars in interest!

As I mentioned previously, I began my master's program last year. And while we tried to pay as much of the tuition out of pocket, we had to end up borrowing. So we came up with a plan, a one year plan to pay off the rest of our debts! I was psyched!!

But...

Here's the bad news with loans, student loans in particular: The whole system of credit and borrowing money is that your "I owe you" changes hands. In this process, mixed with my husband having moved so much in the past few years, some of his "I owe yous" changed hands. So while we finished paying the one lender we thought he owed...another one was claiming an "I owe you" but it was being sent to one of his old addresses and never got forwarded onward...until a month ago.

Needless to say our one year plan now tripled due to having triple the amount of debt we originally thought.

On the bright side, however, this means our spending budget is even tighter and so I will have plenty of new material for the blog since our budget will force us to create more ways to save money.