Frugal Archives - Page 15 of 18

I Just Paid Off A $25,000 Student Loan!

Remarkably, over the course of this year, I’ve completely changed my budget — both in spending and income. The aim is simple: I want to destroy my student loan debt as rapidly as possible while in graduate school. Over the last few months, I’ve deposited more than ever into the federal government’s coffers by paying everything off early.

In August, one of my student loans — the unsubsidized at 6.8% — was actively gaining interest and sat around $25,000. My debt had metastasized and was snowballing into a serious concern. I thought I was doomed to this reality until I started Frugaling, found more ways to make money, and prioritized debt reduction. Then, it all clicked, and debt started disappearing.

Today, I’m shocked and proud to announce that I’ve paid off the biggest hurdle. The $25,000 loan in August now sits at $0 — completely paid off. Instead of losing thousands of dollars over the years and struggling to pay it all back, I have shortened everything. Now, it’s gone!

Unsubsidized Student Loan Chart Debt Question — *My unsubsidized student loans were going crazy. In August 2013, they reached $25,000. Now, they’re completely paid off!*

I know this is shorter than normal, but I just wanted to share this little achievement with all of you. Trying to keep personal finance… Well, personal!

Thank you everyone for your support and help thus far. I have a ways to go, but this is the biggest mountain to climb.

Would You Honestly Answer This Debt Question?

By Frugaling 11 Comments

Fork in the road flickr creative commons debt question — *Photo: flickr/sacks08*

The first-year anniversary of Frugaling.org is right around the corner. It’s been over 11 months since I started this journey and a tremendous amount has changed. Today, I’m taking time to reflect on what started it all.

How much debt do you have?

When I was asked this debt question, it seemed invasive and prosecutorial. The consequences were unfathomable and unknown. I remember feeling awkward, heavy, and embarrassed. I knew the number right off the top of my head, but saying it aloud made the situation more real. The answer to that question was personal and private. I was almost ready to react in defense of my debt!

I briefly thought, “I’m a student, I need this debt! It’s necessary! Look at other people! Hell, it’s an investment in my future career!” Can’t you read and feel the dripping indignation?

The question appeared to be an oxymoron, too. Frankly, I had less than nothing. How could I have less than nothing?! Nearly $40,000 in debt between credit cards, student loans, and a car loan, I didn’t own anything. Instead, banks owned me and all my stuff. With student loans, you either pay them back, enter a special governmental program for forgiveness, or you die. There’s no option to reduce your interest for good grades or make it magically disappear — not even bankruptcy can save you.

Despite the internal pressures to keep quiet or lash out against the person asking this loaded question, I decided to follow down a different path. I responded hesitantly — not knowing the response I’d receive — but also with combination of authenticity, genuineness, honesty, and openness.

Sharing the big, scary number

I plopped out this turd of a number: “I have about $38,000 in debt right now.”

The heft of that number and all the social pressures surrounding it seemed to be lifted. The veil of privacy and secrecy around my debt disappeared. Suddenly, I felt freer. Over the coming months, I began to tell more people about my problem. Some people reacted in shock. Others shrugged their shoulders and admitted they had more than me. Seemingly, my vulnerability and authenticity encouraged others to share their honest reactions and their own debt stories.

I wasn’t alone anymore with this staggering number. I wouldn’t be kept up at night anymore. Being able to share my story enabled me to take responsibility for errors and realize how I could improve. The two combined in perfect harmony into Frugaling.org.

The pressures of society are powerful

I was worried about the stigma of debt. I noticed in popular media and casual conversations that debt was comparable to ill morals. Poorer people are vilified for making mistakes and not working hard enough. I was told that if I share my bank statements and my debt load openly that that was tantamount to indecent exposure. Maybe they’re right, but by facing my problem head on and sharing freely, something beautiful happened.

After I started Frugaling.org, I began to pack more lunches, choose more affordable clothing stores (haven’t purchased anything in 8 months), make a budget I could actually follow, and radically reduce my debt. I made more money and paid my loans off in huge chunks.

Being honest and risking rejection was one of the most difficult things I’ve done. But I’m certain now that this openness is the strongest method and pressure to fixing a bloated, dangerous debt course. Changing the path can seem difficult — you’re going to want people supporting you. By admitting your debt load, you’ll be making your first step towards zero and have a team of people cheering you on.

Have you shared your total debt with other people? What was it like sharing your story? How do you find support in your journey back to zero debt?

What If Gas Were $10 Per Gallon?

By Frugaling 5 Comments

Price Of Gas Pump Fuel Tax Car — *Photo: flickr/stevesnodgrass*

As a car owner, my budget is precariously balanced on the assumption that I’ll only be putting in about $40-50 per month in my tank. Being frugal is often described as an effortful choice, but what if the socio-political climate affected that ability? What if transportation costs became a burden we could no longer balance? What would we have to cut out? How would our lives change?

Yesterday, I attended a thought-provoking debate held by public policy center of my university. The organization tries to inform the general public about policy and health concerns that could occur. With proactive and prevention-based education, they believe that the general public may be able to better handle adverse events.

This week’s question was: What if gas were $10 per gallon?

What could cause gas prices to spike?

There are various events that could influence the price we pay at the pump. While many are prevented on a daily basis, crises could occur that temporarily or permanently spike gasoline. The following are 5 catalysts that quickly come to mind:

Increased domestic demand from businesses, industry sector
Global market needs for gasoline
Speculation from oil traders
OPEC and/or the largest oil producers curtail output
Terrorism, war, instability, or something unpredictable

While unlikely, these concerns can and do occur. For instance, back in 1973, we had a terrible oil crisis that sent prices up 400% and left budgets decimated. Embargos from oil-producing countries made for historic highs at the pump.

We don’t have to look that far back to see atmospheric increases. In 2011, Hawaii documented record-high gas prices nearing $5 per gallon. Even though it’s a small island, this severely impacted the economy and population.

How much do we currently spend on transportation?

If gas increased to $10 per gallon, we’d be in real trouble. Our economy and transportation systems would be heavily burdened by large fluctuations. Think about how much you drive for fun, errands, work, children, etc.

Spending on transportation is second only to housing expenses. Every year, Americans spend an average $17,000 on housing costs, with $9,000 going to transportation needs. If gas prices tripled to $10 per gallon, we would suddenly be looking for compromises in our budgets. From public transportation to private citizens, everyone would be impacted.

How would life change if this happened?

The threat of gas spikes and/or continued increases really highlights the fragility of our current consumer system. If transportation costs skyrocket, we may see significant modifications in our driving, purchasing, and vacation behaviors. A quick jaunt to the local supermarket would instead be an adventure saved up for and withheld until absolutely necessary.

People would probably opt to bike to work and run errands. Plastic bags would likely disappear, as the energy needs would be too demanding. Heating our homes would be painfully expensive in the winter.

Eventually, we would continue and the economy would recover around this new life. Cities would likely condense and become more urban, with suburb populations flocking to central areas. This would motivate people to seek alternative energy forms and mass-produce electric vehicles. Changes would most certainly occur, but sometimes for the better.

I wonder: If we pretended like it were already $10 a gallon, would we live greener, healthier, and more frugal lives? How do you think you’d change your travel habits if gas went to $10 per gallon?

Minimalism: Nothing In My Pockets

By Frugaling 9 Comments

I quite fondly remember the days when I didn’t carry anything but a house key (on occasion). As a child, I didn’t have savings, cash to carry, pens, credit cards, IDs, etc. The world was no more dangerous than today, and my pockets were empty. I remember childhood adventures in the suburbs of Pittsburgh, finding trails and paths less wandered. Friends would tag along and we’d discover and explore, all without a single thing in our pockets. As I age, I can’t help but wonder why my pockets have grown heavier with stuff.

Nowadays, I feel like I’m unfurling and unloading a mass of “necessities.” My brain tells me that all of these things I carry will come in handy throughout the day. Like a good boy scout, always “be prepared.” I regularly carry headphones, a cell phone, multiple cards and ID’s, chapstick, keys, pens, and notes. My pockets are frequently burgeoning with stuff — strange shapes created.

I know I’m not the only one. My grandmother always said, “You should carry a little cash, just in case something happens.” Even in elementary school, she imparted this standard of living. She’d suggest, “What if you need a taxi because you got lost? Or, what if you needed food and hadn’t eaten?” Cash was an out — just in case an emergency occurred.

My professors will reach into their pockets to grab larger key chains, wallets, and cash sums. The jingle is louder and they seem to have amassed more. My peers carry their clutches, purses, wallets, and bags, too. Men and women of the working world carry their packs, bags, and briefcases for a long day’s work. I’m struck by how little we had to carry as children. We could instantly step out of the house; being “prepared” was a mental state, not physical.

Frequently, I fancy the minimalist life, and try to carry less, but I can’t help but notice a discrepancy. Here I am trying to become more frugal and minimalist, but I’m carrying more than ever before. Where does need become want? What do I really need with me every day? Should I follow my grandmother’s words and carry money everywhere I go, as if I’m waiting to be attacked?! Why could I get away with nothing more than a house key as a child?

It’s easy to justify the mass grab: I have more responsibilities as an adult. The decider and chief within me argues for the stuff. It says, “You’ll need your credit card in case you get hungry, need to pay for something randomly, or anything strange happens.” Even if I take the free bus into school, I’m invariably carrying my driver’s licence, school ID, and more. Will I need to hand over my ID? Probably not. What is it about becoming an adult that becomes the justification for my outsize growth in pocket dimensions?

There’s only one conclusion in my mind: We grasp for these crutches as adults, as the fear of death seems to grow. The world is no less safe, and yet I hold onto these safety measures (especially my phone). If I leave the house without this stuff, I feel more than naked — heck, I’d rather be naked!

But every now and then, there’s an intense pleasure, joy in leaving the house with nothing but a house key (sometimes without that, even). All the “adult” responsibilities that I carry seem to be left behind — just me and the world. It’s then that I realize how splendidly simple life can be, and that those childhood adventures are always waiting. After all, feeling prepared is an internal state, not a physical one.

I Just Paid Off A $25,000 Student Loan!