When I moved to Washington, D.C. with nothing but two suitcases, I brought with me almost $20,000 in student loan debt. I knew I had taken out student loans during college, but like so many bright-eyed, bushy-tailed graduates I had no plan for how to pay them.
For starters, I wanted them paid off early – by 2018. I absolutely did not want these loans hanging over my head for a decade. Five years would be plenty of time to make steady monthly payments while also building up other financial priorities. So I plugged my timeline into Mint and devoted any extra funds I could toward paying down my debt.
After three years of diligent payments, even when I had to scrape together my last pennies, I have a few thousand dollars left to go. The rush I’ve gotten after paying off each loan has been exhilarating. Now the finish line is just on the horizon. At my current pace I can have these loans paid by the end of 2017. That’s not bad, right? I’m ahead of my five year goal! I should just kick back and watch that balance drop, keeping that champagne bottle on ice at the ready.
It turns out, I’ve so meticulously managed my spending that I can take a significant chunk off my remaining balance. In fact, I have enough cash sitting in my checking account to bring that balance to a big fat zero. Today. Why should I rush to pay off these loans when I already know they will be paid in full in a few months? One simple word: Freedom.
I have the resources and the confidence in my finances to cut off this financial burden once and for all. I can set free money tied up in debt payments for the next year. This extra cash means I can double-down on retirement contributions and other savings goals (*ahem* cabin in the woods). The money idling in my checking account gives me nothing but a false sense of security. What better use for that money than to conquer my biggest financial hurdle?
Is it scary? Yes. Will it be worth it? Absolutely. Anything that gives me peace of mind and allows me to live simply and intentionally is a worthwhile investment.
~ Ms. RW