“Destroy Your Student Loan Debt” by Anothony ONeil takes us step-by-step on how to get rid of large amounts of student loan debt. I never took any student loans, but I know it affects many young professionals.
You need to attack student loans aggressively and quickly. If you don’t, they can grow faster than you imagine, leaving you in a bad financial situation.
Using the debt snowball effect, you can first pay down your smallest debts. Then use this new cash flow to repay the remaining obligations in succession. This process works because of the momentum you receive after each finished debt.
1) Don’t concern yourself with concepts such as public service forgiveness or student loan discharge. It’s much faster to buckle down and pay off your loans yourself.
2) Debt consolidation isn’t the answer unless you can get a fixed rate at a better interest rate. Also, you should pay it off in the same timeframe as before—don’t push the date further.
3) Start with a zero-based budget that accounts for every dollar in income. Every dollar needs a job, and you should track each one. It sounds boring, but it will make you wealthy one day.
4) After creating your budget, you can start your Baby Steps. Step one is to save $1,000 to an emergency fund, preferably in a high-yield savings account.
5) Baby Step 2 is to pay off all your debts except your home. This is where the debt snowball comes into effect. You need to leverage momentum to make this go as fast as possible.
Remember, getting out of debt is just a season of your life. Your life may suck for 2-4 years, but after that, you’ll have the financial freedom to chart your own course.
My wife and I got out of debt in about two years—how we see the world has changed beyond anything we can imagine. We used the debt snowball technique, and I can testify that it works as advertised.
Please don’t wait for the president to forgive your student loans. Live below your means, work hard, read books, and pay off your debt. This book is an excellent guide to getting you on the right path.
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