Hi, I have read MMM for a few months but never posted in the threads. I just wanted to say hi, and let you in on some of the mustachian goodness I've been up to while lurking on the website. Hopefully this doesn't come across as being a braggy pants. I'm really hoping you'll tell me something new I didn't know. Honestly that's how I've gotten where I am, by asking every person I meet to tell me what they know about money. Even if they are a complete anti-mustachian there is a lot to learn about how NOT to do things too!
Ok so I graduated after 7 years and 2 university degrees in May 2012. I knew I wanted to kill my student loan debts and fast. I also realized even under ideal conditions, if nothing ever rose (prime remains fixed at record lows for 10 years, yeah right) I would pay 26500$ in interest, just for the right to be in debt until I turned 35 years old. No thank you.
I went to a financial planner who told me A.)I was paying just the right amount to my debt with the minimal payments (using those useless pie chart things) and B) when I told her that simply wouldn't be good enough she said if I threw everything at it I might be able to do it in 3 years... maybe. So I left the meeting and vowed to do it in 1.5 years. I never went back to the financial planner.
So the math stuff. I graduated with 2 loans as of Nov, 2012 when they reentered payment:
Government SL: 51660 at 5.5% variable (this is with prime at all time low)
provincial SL: 25133 at 0% (yay!)
I immediately looked to see if I could get any of this forgiven. I found a program with the provincial loan that would forgive part of it if I could prove I had a very high government loan. I consider 51000$ a very high sum of money, so I did the paperwork and they forgave 8000$, cutting my provincial loan down to 17133. It took me 30 minutes to find the form and 30 minutes to fill it out and go to the post office and mail it, so I paid myself 8000$/hr that day!
Then I started hacking away at the government loan like some beserker. I found the cheapest place I could live, I choose the highest paying job I could find (moving away from friends and family to get it). I offered to do all the overtime I could take. I made a budget using the minimum wage in my area as a reference point. After all, whole families survive off this, why can’t a single adult?
And I was a lot happier for it too! I learned to cook, found all the coolest trails and mountains in my area. I climbed my first mountain my first year. I found cool friends who loved walking, beach days, movie nights in, potlucks, free social events held by local businesses. Sometimes I would see my classmates buying big 1/4 million homes, or buying new cars (half my grad class bought themselves new cars with their first paycheque). Sometimes I felt a bit jealous, but I only had to talk to them to realize they spend all their time whining about the new home or car, or how broke they were. Or how trapped in their job they feel.
I plan to have the government loans paid for by December this year. I only have 2500$ left as of right now. Total interest paid: 1250$. Interest saved over 10 years: 25,250$. think what that money will make with compounding in investments by the 10 year date I would have paid off my student loans!
Obviously since my other loan is interest free I've been leaving it on autopilot. I'm sure the right thing to do is to start saving for a downpayment on a home, or investing the money... but it is only interest free because the provincial government is trying to get itself re-elected, and they aren't doing too good of a job. Rather than get side-swiped by a sudden surge in interest charges when they get booted in the next elections, I'm going to just pay it off. Normally it would run >8% variable. As of x-mas I'll have 14200$ left on it, and with my left over educations tax credits, I’ll comfortable wipe it out by March 2014. Do you guys agree I should pay it off or should I see how long the interest free lasts? I think I just want it gone for the psychological boost of being truly debt-free. It sounds so cheesy but I totally picture saying to someone when they ask me about my loans "NO MAN OWNS ME!" like some Hollywood character in a movie.
So yeah that was super long but pretty much explains how and what I am doing. Do you guys have any thoughts, advice, ideas? I am loving reading all your posts, especially all the other people also repaying SL like awesome crazy people. IRL it is almost impossible to talk about finances so it’s great to have a forum like this to read and talk on. All my friends and family are super supportive, but most people look at me like I am insane. So lets be insanely awesome together!
