Some of the lessons you’ll learn from this episode include ways to committing to the challenge of paying off your student loans, accountability systems to keep you on track and several methods you can choose from that fit your personal preference for ultimately achieving your student loan debt payoff goal! This episode is jam packed with lessons so bring out your notebooks, iPads, laptops, or whatever it is you use to keep track of lightbulb moments because there will be plenty of them to come.
What Daphné Vanessa and Shamil Rodriguez Discuss:
- Committing to Your Debt Payoff Goal.
- Systems of accountability to help keep you on track.
- Methods to choose from that will work best for you.
- Calling and negotiating with your student loan servicer
- Side hustles to help you get to your goal.
- And much more…
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The Student Loan Podcast Intro (00:01): Welcome to the student loan podcast. Here, you'll find practical advice on tackling student loan debt, paying down your higher education expenses and inspiring stories about paying off student loans. We're your hosts, Daphne, Vanessa and Shamil Rodriguez.
Shamil Rodriguez (00:18): Hi everyone. And welcome to the student loan podcast, happy new year. And I hope everything is going really well. So already over a week into the new year. And I'm curious to see how many of you are still keeping up with your new year's resolutions. Well, no need to fear. We're glad you're here today because we hope you can join us in one new year's resolution of paying off your student loan debt. One of your loans this year. So you're not alone with this episode. We're going to help you by guiding you with some points to keep in mind as you tackle your student loans this year 2021. All right, Daphne.
Daphné Vanessa (00:58): Hello. Um, before we get started, Hey, to be the bearer of bad news, but want to let everybody know that this is not financial advice, this is not legal advice. This is not any sort of professional advice. This is two people coming together to talk about a subject that we're really passionate about, and that we've been fortunate enough to speak to great minds, to come up with a solution. So this is not professional advice.
Shamil Rodriguez (01:31): All right, well, let's know we've got the heavy stuff out of the way. Uh, so, so let's, let's get back to it. Now. A lot of people are setting new goals, especially with the year that we just completed in 2020. And a lot of people are looking to turn the page and move forward. Uh, so let's, let's start off by setting the goal, right? And first, the idea of paying off your student loan debt or picking one of your possibly many suitor loans that you may have accumulated over the years, or if you're in school, some of the loans that you may have just recently taken out and figuring out ways to do that. So, uh, what, what would be some of the tips and tricks Daphne that you think maybe from some of our previous episodes that would be helpful for our users to start when they're setting their goals, uh, and necessarily writing down your goal as like a first step.
Daphné Vanessa (02:28): I love this. I think, you know, the first step really is committing right? Committing to paying off your student loans, making sure that you believe that you can do it, you see it in your mind's eye. It's something that you've visualized. You visualize yourself as student loan debt free. So that really is that first step. And I do remember, I think it was episode three, correct me if I'm wrong. Um, but we interviewed Melanie Lockert, the author of dear debt and dear debt. For those of you that haven't listened to that episode yet you should check it out is a book that talks about writing a breakup letter with your debt. So this is an action step that we definitely advocate for. That is a clear way of committing to paying off your student loans. So you are committed to the challenge. You are writing it down, you're put you're speaking into existence and that dear debt breakup letter really is that first step. What do you think Shamil
Shamil Rodriguez (03:32): No, I absolutely think that is the right way to go. You, you really have to visualize the, the end. And this is just like any planning, any goal setting process, right? You don't know, you can't achieve a goal if you don't know where you're going, and if you don't know where you're going, then guess what life will set the goal for you. And you will work your way towards that. Like, no matter what you are working on, just keep this in mind. You're always working towards one goal or another. It's either. The difference is whether you decided to set the goal, or if you're reacting to the world, that's setting it for you. So keep that in mind, as you have put it so perfectly, really setting something, this goal in the visualization of saying, Hey, I am debt-free this year from this specific student loan or other ways to visualize it may be.
Shamil Rodriguez (04:26): I have paid off this loan from this specific company. Or you can say another one, just giving people some, some ideas here. If, to say that I have paid off, you know, $5,000 in student loan debt this year, I have paid off $10,000 in additional student loan debt this year, whatever your specific goal is that meets, you know, your specific circumstances or is just a bit of a stretch beyond what you're comfortable with is a good way to go so that you can save years, years, literally years off of your student loan debt repayment plan.
Daphné Vanessa (04:59): I love that. I think that is super accurate. Um, and, and that, that's a really good way of getting accountability. And speaking of accountability, there are so many ways to hold yourself accountable to making that commitment. Another way that I find fun is to tweet your student loan servicer at us as well, if you can, but tweet your student loan servicer, you know, at Navient, I'm not paying you any more. After this year, I am paying off my acne and student loan this year. I am paying off my at Nelnet student loan this year. Um, I am paying off my, at the millions of servicers that exist. Now, at this point, they keep changing. Um, but, but sending them a note in the digital universe to say, you know, we're breaking almost like, I guess, a public dear debt letter, if you will, but with less than 120 characters or whatever the Twitter minimum is.
Shamil Rodriguez (06:09): So I think that's a great, I think that's a great, uh, point in terms of the next steps in the process of hitting your goal is having that accountability. And I think setting that public accountability is a good way to keep yourself accountable because now you'll have that pressure and positive reinforcement from people that are in your social network that you're using or in your community, your digital community, uh, to help push you forward in the right direction. Another way that I like, um, that I've used in the past with other friends and family is actually, uh, like a website that actually allows for you to ask a friend or a family member, whomever, to actually be your accountability partner. It's like, bill, they'll be your actual coach. Now I know there are plenty of different programs out there. You can literally simply just Google is I won't put one specific brand out there, but you can absolutely find someone that could be your accountability partner.
Shamil Rodriguez (07:06): And then you can check in with them once a week, check in with them daily, check in with them monthly, and you can set the terms of like how you want them to check in. Like, I want you to say, shoot me a text messages. Like, did you pay your student loan debt? Or did you pay more into your student loan, right? Or did you pay down your principal this month or this week or yesterday? Or, you know, so just think about some creative ways. Um, Daphne, what do you think about that idea of like using an online platform to find a partner and an accountability partner, or just finding an accountability like person instead of just like putting it out there, do you think that's something that could benefit people in achieving their goal?
Daphné Vanessa (07:45): Absolutely. Especially if you are a digital note taker, you are a person that really thrives in the zero one binary world nerd joke. So when you thrive in that environment yeah. Do what works for you, whatever works for you to create that accountability, um, do it and move on to the next step. You know, you've, you've committed to the challenge. You've held yourself accountable. Now you're ready to choose how you're going to pay it off.
Shamil Rodriguez (08:20): All right. Well said, well said. So then once you've, once you've gone from, you're writing it down, you visualize that you've put the end in mind. Now you have an accountability system set in place, whether it's digital, whether it's, uh, uh, an accountability partner. And now, like Daphne said, now you're moving on to your next step. Now you have to choose what your method is actually going to be. What's going to be your approach, right? So you've, you've put it out there, but what, what, what can you actually do? So definitely. Would you mind breaking down what some of what some of the personal finance approaches that we've heard from, let's say like Choncé's episode, Choncé Maddox, who we had on the podcast and some of our, actually almost every single one of our guests that has paid off student loan debt has discussed what their specific method was. So let's go over some of those main topics.
Daphné Vanessa (09:15): Right? Right. Um, so to give, uh, the audience an overview, the standard methods that are most popular of paying off a debt generally, but we're applying it here to student loans is one, the avalanche method, two, the snowball method three, I call it a unique psychological method where you're paying off debt that has a, more of a psychological impact on you first, before other loans. And then there are a number of really unique techniques that are out there for paying off larger loan balances, such as velocity banking and a lot of other very creative pieces. So, but what we're going to talk about is the approach for how you choose which loan to pay off first. Right? So that's the methodology that we're talking about. An avalanche method means that you are looking at the highest interest rate. So you take your loans, put them in a spreadsheet or write down by hand, whatever works for you.
Daphné Vanessa (10:26): Um, and then align each loan with an interest rate filter and choose the interest rate. That is the highest. And that's your order for paying off your student loans. On the contrary, if you use the snowball method to pay off your student loans, then you are listing your student loans out by total amount balance, outstanding debt is what it's called, um, likely on your screen. And you filter by from lowest to highest and you pay off based on the lowest balance. And now what are the different impacts of those? Right? So the avalanche method is technically the more, um, financially sound method, right? Because it decreases the amount of interest that you're paying over the life of your student loan debt. And so if you don't want to give interest money away to student loan, servicers, and lenders, and you want to keep your money generally over the life of the loan, avalanche is going to be your method.
Daphné Vanessa (11:34): If you are more interested in getting the quick wins, then the snowball method may be for you because you want to know that I paid off this couple thousand dollar, a student loan before the larger amounts. So those are the two major. And then the psychological method, as I previously indicated is perhaps you have alone that, um, recently you turned over that used to be a parent plus loan, and you really want to get the loan out of your parents, uh, hair, because that, that has a psychological impact on you. For whatever reason, you didn't look at the numbers, you didn't look at the interest rates or the balance. That's not of interest to you for you. You're thinking of the psychological impact that a particular loan has. And so that is a method that a lot of people choose, keep in mind, you don't have to choose one method. You can combine, you can truly do whatever you want, but the most efficient, uh, people tend to choose one method and see it through to the end. So those are just some of the methods. Um, I'm not going to go into velocity, um, banging, I think that's a whole separate episode to be honest, but those are, those are high level. Some of the methods that you can use to pay off your student loans.
Shamil Rodriguez (13:00): Great. And then I think definitely you bring up a great point here just to kind of emphasize and, and drill into this, this concept after you've chosen your specific method, whether it's the avalanche, the snowball, or like Daphne had cetera, the, the psychological unique perspective, like getting that win. Um, you also need to then think about how you're actually going to be implementing this, right? Where's the consistency of applying your actual method? Are you going to automate it? Do you trust yourself to do it on your own? Do you have a journaling system that you do? Are you a big weekly, monthly planner type of person? Do you live and breathe XL spreadsheets, right? These are all things that you need to now consider after you've chosen your specific method, how you're actually going to be consistently applying that method. Right. So just keep that in mind when you're, when you're looking into these. Uh, and I, and I think it'll actually be helpful Daphne if we, if we give some resources in the show notes, which we will do, um, on, on these like different sources that have more deeper dive that had deep dive into these topics, and then we'll actually link to other episodes where some of our guests go into how they applied it to their own situations, which I think would be really great. Um, and then considering, uh, like learning more about how you can then apply it to your own life. Does that make sense?
Daphné Vanessa (14:28): Absolutely. And I hope that, uh, the, the resources useful to those of us that are paying off student loans. Um, so yeah, I love your, your piece on the, how I did not think about that. So automating is a game changer for investing, for saving, for reaching goals. Automating your finances is such a clutch move because oftentimes with student loan lenders, they actually give you a discount of usually around 0.02, 5%, um, off of the interest for automating your payments. So perhaps you automate the minimum interest payment, and we'll go into that in a little bit. And then anything extra that you pay is that, that, uh, that manual payment, you know, you could, you could mix it, but that, I think that's so important that you thought about the house. You know, that's a great point.
Shamil Rodriguez (15:35): No, thank you. It's just, there are so many different programs and platforms, whether it's your bank, whether it's the debit card that you use. Right. And like keep the change programs now, right? Whether there are personal finance apps out there on your phone to use, like everyone is offering some sort of digital service that allows for you to take yourself out of the equation. Like if you know, that's a part of your psychology, right? Like I think we're not, we're not going to get into it. We're not psychologists, but I just think that we all know ourselves and it's best to cut yourself out of the equation. If you know, it'll be more consistent because guess what, when that, when that system is in place and it's automated, it will work for you when you're sleeping. It'll work for you when you're awake, it'll work for you when you're distracted.
Shamil Rodriguez (16:28): And you're not necessarily thinking about your student loans because let's keep it real. Who wants to think about their student loans all the time, right? Like that's not what you should be doing. So let the computers do it for you. If that's something you feel comfortable with, otherwise, if you are very, you know, scheduled and, and, and have everything written down and very methodical in terms of planning that way, then by all means, go ahead and do it manually. But we still, when I would still recommend drawing out what that schedule looks like in terms of like the, how, or like still incorporating it into your scheduling system, whatever that may be, so that you have like a visual cue that, that signals, Hey, now the time to make this extra, additional payments towards my student loan, based on whatever method that you chose.
Daphné Vanessa (17:19): Fantastic. Um, and that leads us right into the next step, which is assessing your payment, minimums and your interest minimums. And why are those two things different? They're different because you may have a minimum payment that's based on a plan that you're on. If you're in a federal payment plan, for example, you may be on income based repayment. Your minimum payment may still be less than the interest owed that. And remember, because your loans generally have compounding interest, you have to be very careful about allowing for that interest to continuously accumulate. Even if you are making minimum payments, um, strive to at minimum, get rid of the interest. So an example could be you qualify for a minimum payment of $50 a month. However, your interest for the total amount of the loan is actually a hundred dollars a month. So you can pay $50 a month and be on time, not get reported to a credit agency, but over the course of time, if you continue to make those minimum payments, your loan will grow.
Daphné Vanessa (18:41): Why? Because they add the additional interest that is unpaid to the principal and compound it. So this is something that, um, depending on when you took out your student loans may not have been super clearly spelled out, but if you call, ask and have incredible patients with student loan, servicers, uh, they can hopefully explain to you how these terms impact your specific loan and, you know, maybe even provide documentation in an ideal world. So I think assessing your payment, minimums, looking at the interest and aiming to at minimum, get rid of the interest each month and ideally pay more than the interest. That's a solution that will lead you towards paying off your student loans. Um, small, what are your thoughts on that?
Shamil Rodriguez (19:39): No, I think you hit a great point and it actually ties into the episode that we had with Zina Kumok, who was able to save a year's off of her student loan repayment plan by just adding, I mean, literally less than a hundred dollars a month in additional payments. So I think you, you bring up a good point of what I think is related there is that she called the servicer and they helped her figure out that part. She wasn't by herself. She called the student loan servicer, and they actually helped her figure out if I make $25 a month in extra payments, how will that impact my repayment plan? If I make $100 a month, how would that impact my plan? So if you look at, if you look at your let's look at the ultimate goal of the student loan service companies, they want to get their money back, right?
Shamil Rodriguez (20:29): They want to get their money back plus the interest. Now, what way? Like, why would they not be in their, in their, in their minds? Why would they not work towards helping you get there right now, Daphne brings up a tremendous point and making sure that you just don't go for the minimums because that can up backfiring on you and having you paying this debt much longer than you need to. So just keep that in mind, as you're looking at your finances and you're looking as you're reassessing your strategy for paying off and reaching this goal of paying off your student loans this year 2021, that you are seriously considering the, the interest rates you're looking at, you're speaking to the student loan, servicers, you're looking at the minimum payment. You're also looking at the principal. Like I think Daphne, you hit it right on the head that it is important to look at the principal, because just so that anybody who's out there who doesn't know now, I'm not going to insult my, our listeners here.
Shamil Rodriguez (21:29): I think we have a very smart, uh, listenership. Our audience sees me. And, but for those of you who aren't aware that principle is what dictates how the interest amount that you have to pay is calculated. So the sooner you can pay down your principal, the smaller your interest amount will be in total. So just keep that in mind. Uh, it's something that, that can easily kind of like slip under the radar and we'll get into some like tricks to make sure that you're not getting penalized or that you're like actually paying down your principal. Um, but no, definitely a spot on, you know, user servicer, call them, analyze your interest rates, figure out what helps you pay it down. But now the next question is, all right, guys. So now that now that you've committed to the challenge, right? You visualize that you've written it down, you found your accountability system, that's going to help you stay on track. You decided how you're actually going to do it. Like, what method are you going to pursue? How that's not going to be accomplished, right? Are you, are you doing it manually? Are you automating the process? Now you've assessed your, your payment minimums and your interest, right? You figured out the details of your specific plan
Daphné Vanessa (22:42): And then just how you do that. Right? So, so I just want to quickly add how you're assessing your minimum payments may involve some legwork, right? It, it could involve hold times that are quite annoying. It could involve being transferred. A number of times like this is not fun work. You just have to be clear. It's not easy. That's why a lot of people don't do it, but you should know that there have been complaints made about servicers. Um, so it's not always going to be a walk in the park, but stick with it because at the end of the day, you benefit from being free of student loan shackles. So I just wanted to add that point that you, we may, you may have a call with a customer service rep where they try to rush you off the line and encourage you to do forbearance where you accumulate compounding interest while not making payments.
Daphné Vanessa (23:45): And you need to be strong and say, that's not what I want. I am here to pay off my student loans. I am here to find out the best way to do that. And I would hope that you make the time to give me that information. If you're not willing to do that, please transfer it to your supervisor. If the supervisor doesn't help, please transfer me to the executive unit. If they do not help, please transfer me to legal or whatever other escalation channel exists at the student loan servicers company. But that's the type of, um, strength that you have to have in your calls. And it, it may take time. It may take a number of calls. Um, some one extra thing I do want to add whenever dealing with customer service reps, have a pen and pad ready, ideally a spreadsheet in my world, of course, but take notes.
Daphné Vanessa (24:38): Get the reps, ID number, name, the time of the conversation, the date of the conversation, what was discussed, what was the outcome? You need to keep those records because sometimes you have to go back and refer to them to get what you want. For example, let's say that you made an extra payment and you wrote down on a checklist, it's check that it should be applied to principal. You later go to check your bank account and notice it was not applied towards the principal. What are you going to do? You are going to call the servicer and you are going to tell them that that is improper. That was not what you agreed to. Um, and you will refer back to the conversation on X and X date at exit X time with X, X rep, um, where that was discussed. So those are the sort of actions that are going to, you know, that may need to happen in order for you to pay off your student loans because quote mistakes happen. Um, but also just oversight. And you need to have the Hawk eyes on your student loan accounts.
Shamil Rodriguez (25:43): That's great. I mean, mic drop there, uh, um, it's, it was great to go through some of the role-playing there, cause I think it can be very intimidating Daphne for people to call when they're not sure. And so now, uh, would that be the thing that was very important to go in with a very specific goal in mind and continue to persist? Uh, if you start getting, you know, pushed to different areas and not knowing which way to go, um, another tip, just so that you guys are aware. So, you know, refer to these other episodes that we have, uh, because some of our guests go into details as to how they did it, and they have great resources, as well as you'll find in their show notes, uh, before you call it, it kind of gives you that boost or to give you that mindset that you need, uh, to do so, uh, so good.
Shamil Rodriguez (26:33): Good, good one. Definitely. I think that was really good that you went into the detail there, but now here's another question I think is a logical question for anybody who's listening. This is like, okay, great. So I've got the method, I got the assessment, I'm going to call them, I'm going to negotiate, I'm going to figure out my plan, but where's the extra money coming from, right. That's a legitimate question. And what do you think? Legitimate question. Yeah. So I think, uh, now would be a good time to go over while we're considering finding the source of your funds. Like, what are the creative ways that you are adding to, uh, this, this goal, right? This very specific financial goal of yours, but where's the money coming from. And so there's some creative ways to do so, um, that, that you need to keep in mind.
Shamil Rodriguez (27:20): And, uh, I think first one is side hustles, uh, that you want to keep in mind. Uh, I think we should break it down into in-school and out-of-school, or we can just lump it all together. But the idea here is that if you are in school, here are some of the methods that I've seen that I've done myself personally, or that I've seen other people do that worked for them in school. Uh, the first one is, uh, campus rec, right? So when I was in school, um, you know, people do work study library, working, sit in government or different offices. I was very intentional. Like if I'm going to work while I'm in school, uh, I'm going to make sure it's enjoyable and like fun or active in some way. Uh, because I was already sitting enough doing school, like sitting down to do that.
Shamil Rodriguez (28:09): So for me, working with campus rec was very fun because I was, you know, being an umpire for games or serving as a referee for the basketball games, whatever the case may be or setting up, you know, we, we would grab one of the carts. We bring like volleyball, mats and volleyballs, and you'd have like certain time periods where you'd go to the quad and like set it up so that the rest of the student body could just like go and enjoy themselves and you'd play along with everybody else. So, I mean, to me was a fantastic opportunity. It was a great, great, great, great time and a great way to like get out, but also get paid while you're at school. So like super fun, something I enjoyed, I would definitely recommend it. If you're in school now look at your campus rec recreation center or whatever it's called a university and see what, what openings they may have if they have any for you. Um, were there any other, other, other ones that we, before I move on down this list year that you had a minor, any feedback there?
Daphné Vanessa (29:11): I think there are so many, uh, for students. So I, I'm really excited to hear what, what your listing is. And I think I'll just encourage people to look at our last episode for tips and tricks on if you're a current student, how to navigate, um, you know, going to school for free.
Shamil Rodriguez (29:31): Absolutely. Yes. I mean, it was actually those, the VIP guests we had was a U um, so some good ones there, but yeah, so some other ones we have here are actually being an RA. Then you might hear RA not for us. It was called the resident assistant. And even though you're not receiving a pay or at least in the program that I was in a, what you were one of the financial benefits you did receive was that you weren't paying for residing on campus. So to me, that was a very big, uh, incentive that our benefit really, uh, in addition to like just being a part of that resident community, I was, I wasn't a community, even though it was a big commuter school, but the idea is that that really does impact the amount that you are taking out in the student loan. It can end up saving you 10 to $20,000 a year, depending on your school, uh, in, in student loan, uh, uh, principal and payments.
Daphné Vanessa (30:29): Yeah. And just, just the rent that you save. Right? So if all of a sudden housing is free and you were allocating a certain amount towards rent, you now have that money that can roll over into making extra payments towards your student loans. So that's a, that's a great example.
Shamil Rodriguez (30:48): Yeah. So there you go. So you're, you're not, you're not even finding new money there, right? You're just reallocating the funds that you already set aside for that purpose. And now you're helping you pay your student loans off faster. Good, good point. Definitely. Now another one that I saw that I thought was very interesting that I saw other people do were like selling travel packages. Right. Um, now, even though there are plenty of websites that sell individual flights, or, you know, try to help you find that the cheapest price out there, because, you know, let's, let's keep it real. It's not like you're balling on a budget where you're in school typically. Um, but you still want to have great experiences and travel and, and, and have that experience. Well, uh, there are still travel packages that you could actually lumped with other students to go on trips together, right?
Shamil Rodriguez (31:39): So whether it's spring break, whether it's Christmas break, whatever, whatever, any of the breaks, uh, you know, there are companies that are looking to sell these types of packages to the student body. Uh, and you can actually take advantage of that because if you are simply pooling together folks, uh, other students that are going to do these trips anyway, so why not help them coordinate it in a way where these definitions and they have, like these all-inclusive packages where you're helping coordinate the housing, you're helping coordinate the transportation. You're just helping put it all together. So all the person has to do is pay, arrive, enjoy, and come back. Right. Very, very simple. Uh, and something that I thought was a very interesting way to make money while still being in school.
Daphné Vanessa (32:25): Yup. Yup. And obviously things are different now, um, with traveling. So, you know, that may not be a hot ticket item to sell anymore, but I think it relates to generally a brand ambassador, right. And, and working for a brand that is either paying you or giving you something in kind that is a value that you can leverage to pay make and make extra payments towards your student loans.
Shamil Rodriguez (32:57): Absolutely. Absolutely. There are plenty of companies that are out there, uh, starting to included that have some sort of brand ambassadorship or campus ambassador program or whatever the case may be, um, because they are looking to bring their brands onto campus. So go to go to some big brands or brands that you actually like, or that you participate in that you use and see if they actually have a campus ambassador program that you could actually take advantage of that would allow for you to work while you're in school, but doing something that you actually enjoy or using a product that you actually enjoy and sharing that with other people. So a great, great point there definitely on bringing into brand brand ambassadors, absolutely something you should, uh, you should absolutely consider, uh, there. Uh, okay. So next let's not, let's not forget about people that graduate, right. Let's keep them in mind because after you're done with school, the Lowe's they'll go away.
Shamil Rodriguez (33:55): No, they, they are still there and the time to play, time to pay. So, but this, this part I think is important too. And keep in mind if you are in school, these are, these options are things you can actually still do while you're in school. Um, but I think it's important to, to kind of go over something that's grown a lot recently. Right. But isn't necessarily new in terms of the concept, right? So the gig economy, uh, the idea of being able to be your own independent contractor instead of having to go through your traditional employer route, um, I think is something that could be a tremendous side hustle and a great way to tackle your student loan goal of tackling your student loan debt this year, by not impacting your typical planned income that you had allocated for different things. So some of those ideas because of the, the, the ease of technology and the rise of just mobile phone usage and the ability to replace your laptop is some of the things that you're seeing out there that we all know are used, right?
Shamil Rodriguez (35:02): Lyft, Uber, like Daphne said before, the current pandemic has changed the way some of these services are appealing, but what's great is that the digital gig economy is still very much alive, right? So if you have a certain skillset, let's say you are, you graduated as a graphic artist or loved designer, and you wanted to offer that in addition to whatever you were doing with your full-time job, you could join a company like, like, uh, Upwork, let's say for example, and just list your services or apply for jobs that are looking to have filled. Right. And so, and those can be one-off jobs. Those can be a perpetual depending on the type of posting that you're replying towards. So that's a great, great way to use whatever skill that you do have that you have, that you possess that you think could be beneficial out there, whether it's social media marketing, whether it's data entry, whether it's phone calls with their sales, whether it's, I mean, lessons, tutoring, basically using the internet to help others out there that may need or benefit from the value that you can provide.
Shamil Rodriguez (36:15): Right? You took out those student, the loans for a reason. So there's definitely a skill set somewhere in there. Um, so think about that, take a look at these companies. And if you don't want to use your skills and you just want to like clock in, clock out, whatever you feel like it then do an Instacart or, you know, some other delivery service company allows for you to just pick up, deliver, drop off, turn off your, your app when you're done, or turn off your app. If you don't feel like using it anymore. And then boom, you've made a couple of extra hundred dollars a week. And then all of a sudden now you've made a real dent into your student loans. So that plan, that seems that big number that seems so dramatic when you're looking at it on your, on your dashboard or your loan servicer website actually can be much more realistic because you've gone through the steps of creating your plan. And now, you know how much you need to make per month. And now you've got certain side houses that you can use to do that, but the gig economy is not the only way to go. So it could be anything like starting your own business. Right? Definitely.
Speaker 4 (37:17): Absolutely. I think, uh, your own business is like one of the most freeing ways to side hustle and anybody can do it. I would say even students like anybody can start a business at any time. There really is no sort of limit, but that's a great way to create more money, right? The two methods that people usually use to create extra money to allocate towards paying off a major debt is either to cut expenses or to increase revenue or a combination of both the ways that we've discussed so far. Are they increasing revenue aspect and starting a business is a great way to do just that going into the cutting expenses methodology. I know as a student recent graduate, you're probably already living way below your means, right? But if there's anything that you can cut out, a subscription, a gym membership, um, anything that isn't actively used towards, uh, your life or improving your life or making you money, those are, those are subscriptions to reconsider. Those are expenses to reconsider, especially if they're happening on an ongoing basis. So you'd be surprised how many $50, $20 payments add up to being a couple hundred dollars of extra money that you now have to allocate towards your debt? A great opportunity. So both cutting expenses and making more income is the trifecta. Well, I guess I'm missing one, but is a great way
Shamil Rodriguez (39:04): To the two pronged, uh,
Speaker 4 (39:08): A little punch, whatever, um, a great way to pay off your student loans. So that's definitely, um, something that, that I would suggest Shimmel. Anything else?
Shamil Rodriguez (39:24): Yeah. Thank you. You hit a good point there living, living below your means now doesn't mean that you have to live in, you know, it's, uh, uh, uh, the life of a monk, right. Um, what we're saying here is be creative. And I think a lot of you already are creative, right? If you're already in school, if you've just recently graduated, some of our guests have said like when they were paying off the suit alone and being very aggressive about it, that they, you know, brought on an extra roommate into their, their living situation or, um, you know, they, they changed the cell phone plan they're on. Or like Daphne said, they cut back their subscriptions, uh, for certain platforms, uh, because like the reality of it is, I mean, I get it, like, I know people love to stream, but like how many streaming services do you need?
Shamil Rodriguez (40:12): Right. Um, so I mean up to you, it's a personal choice, but I think it's like, those can be very sneaky. Like you said, I think it can be like, Hey, that $10, $10, 15, 10, 10, 10, all of a sudden, next thing you know, you've got like a good chunk of change is coming out of your pocket, uh, for, for just one area of your life. Uh, so no, for sure. I think that's, that's a great way to go. Um, in terms of other areas to, to college, my personal philosophy, I'm a big, like create extra revenue, uh, person, but you have to make sure that you balance it out because if you're not managing your expenses, but you're just increasing your expenses as you increase your revenue, then you're just going to have a wash. And you're really not going to see any of the benefits there. Um, and I think there's one thing there that we didn't like that there's like another method doesn't necessarily mean that it's the most effective, but we need to make sure that we at least touch upon it is like, um, look at your job, like, see what other, what, uh, what benefits are out there? Like what are they offering? You might be surprised. Um, you know, go ahead, Daphne, if you have some thoughts on that.
Speaker 4 (41:17): No, I think that that's so true. Oftentimes people work at a company and they didn't even realize the benefits that the company was offering. So find out, speak to your, uh, you know, whoever's assigned to you for these matters to speak, you know, what benefits are offered for student loans. And if the company doesn't have any, maybe it's worth starting a conversation, you say, well, what are you willing to offer? Um, you know, as a part of a carefully crafted conversation, I would also encourage you to use your job, to negotiate a raise, negotiate, a promotion, negotiate, negotiate, negotiate, because that in itself is creating extra income. And if you allocated appropriately towards the principal, um, and extra payments, then you could be setting yourself free even more.
Shamil Rodriguez (42:15): No, very well said. No, I think we're, I think we're, we're onto something here because, uh, the part that excites me about this is that, uh, you, you really can see what your employer is offering in terms of a benefit. I've had the benefit of being in two organizations, the two structures that, that actually offer a student loan repayment program, right? And so they had a pool of funds. One of them had, one of them had a system where it was a pool of funds was available towards student loans, right? Generally, and depending on the amount of employees or staff members that actually had student loans, I qualified for this repayment plan dictated how much you actually received towards your, towards your loan. So if there was, you know, people come and go, come and go. Sometimes you might get a really nice lump sum payment towards your student loan.
Shamil Rodriguez (43:06): And so then, like Daphne said, you, you call to make sure that the principal is being applied to where it needs to go. I actually had one of my student loans paid off that way, completely, completely paid off that way, uh, through that type of system. So, you know, those types of benefits, you ask to speak to HR and, and do it from a very, like, truly curious way of saying like, Hey, I'm learning more, I'm taking, you know, I'm looking at some of the benefits that the company offers. And I just want to make sure, like, am I leaving anything on the table? Uh, in terms of student loans, do you have anything for student loan benefits that I may not be taking advantage of? And if they say, no, they say, well, have you ever considered it because there are companies out there that offer student loan repayment programs as a benefit to offer your employees.
Shamil Rodriguez (43:59): And so why not be the person that helps bring that to your company and also help your coworkers help yourself and then help your company attract other people that could benefit from that program as well. So that that's really exciting. Um, and I think that'd be said, it, you hit it perfectly in terms of negotiating. But one thing that, uh, another system that I was a part of that was really beneficial was the idea where when you're signing on and you're signing your contract, you can negotiate that in when you're becoming an employee, not just negotiating it while you're there, in terms of your raises. When you come in as an employee, you can actually negotiate a payment, a payment towards your student loan debt, or make that a part of your, of your package, like your, your hiring package. So don't, don't let your traditional, uh, ideas or what we may have been taught when we were growing up, be the only system or methodology that helps pay off your student loan debt, by just saying like, I have to just work more hours and that's the only way I can do it. There are very creative ways you can do that. And your company that you're working for can be a very possibly, could be a really good host to helping you get to your, your goal of paying off your student loan debt this year.
Shamil Rodriguez (45:14): So definitely what do you think about, about I, or I think it might be helpful for, um, the listeners to actually, before we go into that next step of like, making sure that you're keeping track of your payments and things like that. Uh, another creative solution out there, let's not forget our sponsor, the start new, which brings the standalone podcast to everyone out here is actually another creative way to help pay off your civil Lowe's intuition by exchanging service hours towards your community, towards the community. And that is something that you can learn more about visiting at start new, but there are just very, you know, it's just another creative way to add a service-based scholarship towards yourself, right? A services scholarship, retro, what I call retroactive scholarships, right? You've, you've graduated, you're working you're in your field or not. And then you still want to give back to the community, but not exchange and lose time towards paying off your student loans.
Shamil Rodriguez (46:21): Now you can do both through start new that's one that I think is definitely worth exploring and making sure that if it's something out there for you to consider, definitely visit, start new. If you look at, if you visit the C little podcast.com, you'll find them there, you'll find the program, you find the platform and more information, uh, you know, whatever information you may need there. Um, but Daphne, uh, any thoughts you wanna, you want to share there before we move on to the next section of just making sure that, that our listeners are paying attention to their minimums and the excess, uh, of the interest being reprised separately.
Speaker 4 (46:58): I think you really just hit it on the head. I think, you know, you went into the creative, you went into all the diff the different ways that you can find that extra money to make payments towards principal. I think we're at a good place. Actually.
Shamil Rodriguez (47:16): I agree. I think this is a, I hope, I hope that the audience and the listeners and everybody out there, and this is a little podcast community, uh, finds this helpful. And if you do share it with someone, I think, uh, ultimately important that this type of information that we're sharing could actually benefit someone else. So let's do a quick recap, Daphne, I'm just going to walk through what we were covering today. I feel like we went through a lot of information today, but the first one is committed to your challenge, right? It's a new year 2020 is in the rear view mirror, let's move forward 2021. And one of those goals that you're actually going to achieve this year, one of those resolutions is paying off one of your student loan debts completely this year, right? Commit to that challenge. The next step that we thought we discussed was writing it down, making it so by visualizing it, and then writing down what your visualization was, what your goal is.
Shamil Rodriguez (48:16): I want to pay off this amount, or I have paid off this amount by the end of this year from this company or this student loan, then you also wanted to write a dude that letter, right, break up with your debt. Be very clear about that. Listen to our episode with Melanie Lockert and see how she did it and how she'd built a tribe and a big community that believes in that system. And it works for them, but also creating an accountability system, whether it's tweeting in public or tagging us on Instagram to show that you have tagged your servicer on a story that says, Hey, I'm done with you. I'm going to pay off my student loan debt this year, 2021 big new year's resolution, right? Whatever system of accountability you decide to choose, whether it's asking your friend or posting it online, go for it and then follow it next, choose your method.
Shamil Rodriguez (49:07): Are you going to follow the avalanche? Are you going to go with the snowball method? Are you going to go with the psychological wins, right? And knock off some of those student loan debt. So you can build a momentum for you and say like, Hey, it's as possible. I can do this. Right? You can pick that whichever will work for you. But most importantly, make sure that whichever method you choose, you go through the process of deciding how you're actually going to do that. Are you going to automate the process? Are you going to use companies out there, personal finance apps or websites or banks and say, Hey, take it out of my hands and just do it for me based on X, Y, and Z, you've taken yourself out of it. And guess what? It's a set of and forget it mindset. And as you come and check in every once a month or every week, or however you want to do it, you'll start to see that number go down and down and down and down.
Shamil Rodriguez (49:56): And you're going to get more excited and more excited, more excited, and eventually it's going to be gone, or you can do it manually either way, just pick it, pick the system and then stick to it. Next. We talked about assessing your payment, minimums and interest minimums, making sure that you understand what it is that will, what will actually impact the result of paying down your student loan debt. So call your servicer, help, have them help you help yourself. Right? I think that seems redundant, but the point is call your servicer, find out what the payment payment plan is best that fits your ideas. Ask them if I pay up an extra a hundred dollars a month, how will that pay off? How will that change? My repayment timeline, right? If I pay off $50 a month, sort of principle, how would that change? X, Y, and Z.
Shamil Rodriguez (50:43): Also see if they can lower your interest rate. Honestly, just ask why not? What did they say? Sure. We have a special program that if you automate your payments, we can lower your interest rate by X, Y, and Z percent. You may have just saved yourself a year's on your suit alone, but we've made a plan. Next. We discussed finding your source of income, right? We we've got a plan. You understand how much you have to pay or how much sooner you could pay for student loan debt, but where else where's the money going to come from? If you're already paying your bills? Well, we discuss all the different types. You can find a side hustle while you're in school. You can find a side hustle while you're outside of school, but either way, there are plenty of things online that are safe, especially during the pandemic that you can take advantage of, of your current skills or the skills that you're developing to help other people out there that are willing to pay you to help them with that.
Shamil Rodriguez (51:31): You can also start a business or look at other creative ways to find income, but don't forget. You also need to make sure that we covered. You got to make sure you reduce your expenses, right? Keep them low, keep them tight, manage your expenses so that you're not living beyond your means so that you can allocate those extra funds. So if your student loan debt and hit that goal, and then last and not least look at different creative ways of paying it, consider your job, uh, asking them to see if they offer a benefit. If they have packages or programs, if you're getting new hire, if you're being newly hired at a new company, bring it up in your negotiations to see whether or not they can incorporate some sort of civil repayment program as a benefit for you. And if you're already working at your company, approach HR, to see if they have a benefits program that allows for you to pay off your student loan debt, it doesn't hurt to ask.
Shamil Rodriguez (52:23): And if they don't have it, ask them, if they'd be willing to bring it to that company, you'd be surprised if you don't ask you don't receive. And so that really sums up all the different ways that we think. And that we know if you implement based on the guests that we've had on our show that have paid off tremendous amounts of debt and a very, very small amount of time, all you need is one year of consistency planning and all the other steps that we mentioned in this episode today. And you will be one person out there that has paid off your student loan debt and has gotten one step closer towards your financial freedom and releasing yourself from the student loan debt burden that you have been carrying.
Speaker 5 (53:04): It's important to remember to pay the minimums and excess of interest separately, like when you pay your minimums and when you are paying the principal extra payment, those need to be separate payments and documented in writing, because that is going to be key to you actually getting your student loans paid off. So that documentation is super important. I know it's a technicality, but I didn't want to leave without reminding you about that technicality. That can be the difference maker. Um, and, and of course, maintaining those records for the life of the loan. So be kind to yourself, enjoy the journey when you've reached it, advocate for others and help others. Um, and I'll pass it back over to you, Sean.
Shamil Rodriguez (53:58): No, well said. I'm really glad you said that, you know, it's important to enjoy the journey, uh, advocate for yourself. Uh, if you've enjoyed this episode rate, interview us, leave it on whichever podcast platform you're listening to us on today and share it with a friend. It really helps because we're trying to help those that are also caring and fighting their way through the student loan debt journey. Visit email@example.com slash episode 12 for more information. That's the student loan podcast.com forward slash episode 12.
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