Fix Your Finances Week | Step 3: Paying down debt
INDIANAPOLIS, Ind.- Paying down significant debt is no easy task.
However, there are some small changes you can make that will have a big impact on how quickly you’re able to pay back money you borrowed.
The first step in this process is calculating exactly how much money you owe.
Many people think they owe one amount, but in reality it may be thousands more.
Fox 59 is helping a central Indiana young professional who says her student loan debt is at times “crippling,” to fix her finances.
“Looking back I don’t even know how it got this high? I mean I do, I signed up for it… but where it got this high, I just don’t know,” 28-year-old Terri Lee said.
A bachelor’s from Butler University and then a Master’s from Indiana University set her back almost $100K.
Like many she used student loans to finance her education.
“It’s something I see with a lot of my friends, too… we all thought we’d be making more money especially after the master’s degrees,” Terri said.
Right now she makes about $50K a year working in public health.
Pet the Planner offered Terri this advice given her student loan debt-to-income ratio.
“We just have to set those aside mentally and make everything else work, and accept the fact that you’re going to have those for a while,” he said.
But perhaps not as long as you might think?
Since Terri works in public service, she’s eligible for a federal loan forgiveness program.
It’s something anyone with student loans should at least look into.
“So you make your payments for 10 years, what you’re supposed to and then the rest of the loans are forgiven,” Pete the Planner said.
Terri’s second job is working at Butler University as an adjunct professor.
Pete suggested she use some of that money to help pay down her credit card debt.
He describes this as giving your second job, a job.
“You always want to make sure that a second job pays off debt or saves money,” Pete said.
Extra money shouldn’t always equate to extra things.
“When you have debt and you have savings, what ends up happening is anytime you have new money flow into the situation you have to choose which direction does it go,” Pete the Planner said.
Think you’re eligible for the Public Service Loan Forgiveness Program?
Click here to find out.