Author Topic: I'm a Derp.  (Read 6150 times)

DebtDerp

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I'm a Derp.
« on: January 04, 2013, 01:40:07 PM »


So I found this blog about a month ago and I must say: My eyes have been opened. I had no idea that I am in the middle of Debt Emergency! Quick back story: Graduated from college about a year and a half ago and thought I was doing pretty well. Iíve got a great job that pays me well (a bit more than the US median) and I really enjoy working there. I also have like $88k in student loan debt (was around $92k when I graduated) where I am just making the regular monthly payments.  AHHHH! Iím in a DEBT EMERGENCY!

So, now I know that I should be doing something about this. Thank you Mr. Money Mustache for giving me a good punch in the face! I hope I can be an inspiration of what NOT to do! :)

amyable

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Re: I'm a Derp.
« Reply #1 on: January 04, 2013, 02:26:57 PM »
LOL--I love your picture.  I am in a really similar situation:  love my job, earn a decent salary, have a little under $40,000 in student debt as a couple, and just hopped on the responsibility train a few months ago.  You are young and lucky to have gotten a facepunch before taking on major responsibilities. 

StashinIt

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Re: I'm a Derp.
« Reply #2 on: January 04, 2013, 02:28:56 PM »


So I found this blog about a month ago and I must say: My eyes have been opened. I had no idea that I am in the middle of Debt Emergency! Quick back story: Graduated from college about a year and a half ago and thought I was doing pretty well. Iíve got a great job that pays me well (a bit more than the US median) and I really enjoy working there. I also have like $88k in student loan debt (was around $92k when I graduated) where I am just making the regular monthly payments.  AHHHH! Iím in a DEBT EMERGENCY!

So, now I know that I should be doing something about this. Thank you Mr. Money Mustache for giving me a good punch in the face! I hope I can be an inspiration of what NOT to do! :)

Well if you paid off 4k in 1.5 years pre-MMM you're going to kill it post-MMM! Good luck!

DebtDerp

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Re: I'm a Derp.
« Reply #3 on: January 04, 2013, 02:35:03 PM »
LOL--I love your picture.  I am in a really similar situation:  love my job, earn a decent salary, have a little under $40,000 in student debt as a couple, and just hopped on the responsibility train a few months ago.  You are young and lucky to have gotten a facepunch before taking on major responsibilities.

Thanks amyable! What is crazy is I didn't even think it was that bad. I just thought it was part of life: Go to a good school, get a job, pay off debt. Now I know I can do so much better!

Well if you paid off 4k in 1.5 years pre-MMM you're going to kill it post-MMM! Good luck!

Just forming my plan now, and considering how much I paid in interest over the last 1.5 years I know I can do a lot better.

directionseeker

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Re: I'm a Derp.
« Reply #4 on: January 06, 2013, 11:41:22 PM »
LOL--I love your picture.  I am in a really similar situation:  love my job, earn a decent salary, have a little under $40,000 in student debt as a couple, and just hopped on the responsibility train a few months ago.  You are young and lucky to have gotten a facepunch before taking on major responsibilities.

Thanks amyable! What is crazy is I didn't even think it was that bad. I just thought it was part of life: Go to a good school, get a job, pay off debt. Now I know I can do so much better!

Well if you paid off 4k in 1.5 years pre-MMM you're going to kill it post-MMM! Good luck!

Just forming my plan now, and considering how much I paid in interest over the last 1.5 years I know I can do a lot better.

Good for you!

I found this blog after 7.5 years of paying minimum payment for my student loan.

After MMM, I am confident to pay off my student loan in 6 months, and I want to challenge myself  little bit by paying it off in 5 months.

Anyway,  you are very lucky to find this blog much earlier in life. Go for it!

arebelspy

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Re: I'm a Derp.
« Reply #5 on: January 06, 2013, 11:57:41 PM »
If your student loan is at a low interest rate, you may consider paying the minimum.  My wife's just paid off, and I was sad.  Mine is still going, and paying the minimums, but will be gone in about a year or so.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
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GoStumpy

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Re: I'm a Derp.
« Reply #6 on: January 07, 2013, 12:12:30 AM »
Pay it off and reap the rewards!

marty998

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Re: I'm a Derp.
« Reply #7 on: January 07, 2013, 12:36:20 AM »


So I found this blog about a month ago and I must say: My eyes have been opened. I had no idea that I am in the middle of Debt Emergency! Quick back story: Graduated from college about a year and a half ago and thought I was doing pretty well. Iíve got a great job that pays me well (a bit more than the US median) and I really enjoy working there. I also have like $88k in student loan debt (was around $92k when I graduated) where I am just making the regular monthly payments.  AHHHH! Iím in a DEBT EMERGENCY!

So, now I know that I should be doing something about this. Thank you Mr. Money Mustache for giving me a good punch in the face! I hope I can be an inspiration of what NOT to do! :)


ok so I finally figured out what "derp" means. (showing my senility there). But now my question is what are you going to call yourself on this forum when you are out of debt?

DebtDerp

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Re: I'm a Derp.
« Reply #8 on: January 07, 2013, 09:32:36 AM »
ok so I finally figured out what "derp" means. (showing my senility there). But now my question is what are you going to call yourself on this forum when you are out of debt?

That is a great question. Considering that I can't even imagine now what it will feel like to be debt free it is something I will have to evaluate when that glorious day comes.

If your student loan is at a low interest rate, you may consider paying the minimum.  My wife's just paid off, and I was sad.  Mine is still going, and paying the minimums, but will be gone in about a year or so.

So I'm curious about this. I have many, many loans between the Feds and Wells Fargo that range in interest rates of 4.25% to 9.5%. However, most are 6.25%. Considering inflation will probably be around 2.5% this year, what is the interest rate at which paying off debt quickly is not necessary? I read the Your Debt Is An Emergency post and it got me pumped to do some rapid payoffs. I easily meet the interest deduction ($2,500) but will probably be over the income threshold in 2014 or '15 so that benefit will be gone. Thanks for the advice.

Good for you!

I found this blog after 7.5 years of paying minimum payment for my student loan.

After MMM, I am confident to pay off my student loan in 6 months, and I want to challenge myself  little bit by paying it off in 5 months.

Anyway,  you are very lucky to find this blog much earlier in life. Go for it!

Yeah, I just wish I had found it sooner! I keep thinking about the money I have wasted over the past 15 months that could have gone towards the principal on my loans! Good luck in your quick timeline. Mine is looking more like 3 to 4 years.

Pay it off and reap the rewards!

Can't wait!

velocistar237

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Re: I'm a Derp.
« Reply #9 on: January 07, 2013, 09:50:29 AM »
So I'm curious about this. I have many, many loans between the Feds and Wells Fargo that range in interest rates of 4.25% to 9.5%. However, most are 6.25%.

Definitely knock out the 9.5% first. If they're bundled somehow, contact your lender to see how to make a payment just toward the highest interest loan. All of these are a bit high to keep around. My wife had some 6.5% loans and some 2.5% loans. We paid off the 6.5% ones and are paying the 2.5% ones on schedule.

arebelspy

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Re: I'm a Derp.
« Reply #10 on: January 07, 2013, 05:35:06 PM »
Absolutely kill the higher rates first.  See if you can consolidate to a lower one too.

Mine are around 3 that I'm slow paying (aka on time, but no faster).

I'd personally keep some even at 6, as I feel I can earn better elsewhere, but I can't argue with someone at 6 wanting to pay it off.

At 4 or less though, I definitely wouldn't (ditto mortgage).
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

directionseeker

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Re: I'm a Derp.
« Reply #11 on: January 07, 2013, 10:37:26 PM »
Good for you!

I found this blog after 7.5 years of paying minimum payment for my student loan.

After MMM, I am confident to pay off my student loan in 6 months, and I want to challenge myself  little bit by paying it off in 5 months.

Anyway,  you are very lucky to find this blog much earlier in life. Go for it!
Yeah, I just wish I had found it sooner! I keep thinking about the money I have wasted over the past 15 months that could have gone towards the principal on my loans! Good luck in your quick timeline. Mine is looking more like 3 to 4 years.

It is after 7.5 years that I realized I should pay it to the principal in a more aggressive manner. Although that thought has been on my mind for few years, many advice was given by friends and family, but I was confused to made that decision.

After reading MMM blog, I was thinking "WTF, let just throw myself out there and pay off that little monster, get my life back!"

One more thing, it is not quick, it is 7.5 + 0.5 = 8 years. ^^

DebtDerp

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Re: I'm a Derp.
« Reply #12 on: January 08, 2013, 09:36:01 AM »
Definitely knock out the 9.5% first. If they're bundled somehow, contact your lender to see how to make a payment just toward the highest interest loan. All of these are a bit high to keep around. My wife had some 6.5% loans and some 2.5% loans. We paid off the 6.5% ones and are paying the 2.5% ones on schedule.
Absolutely kill the higher rates first.  See if you can consolidate to a lower one too.

Mine are around 3 that I'm slow paying (aka on time, but no faster).

I'd personally keep some even at 6, as I feel I can earn better elsewhere, but I can't argue with someone at 6 wanting to pay it off.

At 4 or less though, I definitely wouldn't (ditto mortgage).

Yes, I will absolutely be taking out that big loan first. This also happens to be the largest balance, DOH!

It is after 7.5 years that I realized I should pay it to the principal in a more aggressive manner. Although that thought has been on my mind for few years, many advice was given by friends and family, but I was confused to made that decision.

After reading MMM blog, I was thinking "WTF, let just throw myself out there and pay off that little monster, get my life back!"

One more thing, it is not quick, it is 7.5 + 0.5 = 8 years. ^^

Right, not quick at all. I've been messing around with amortization schedules and it is amazing how much an extra payment on principal effects the cost over the life of the loan and the amount a person will pay in interest, especially near the beginning of the payoff period. Of course this can work the other way as well, especially when interest is capitalized on the principal as is the case with most student loans.